Cash remains king: Why we hoard billions under our mattresses

Cash remains king: Why we hoard billions under our mattresses

In recent years, payment behavior in Germany and Europe has changed significantly. A recent survey by Strategy& shows that cash is declining in popularity. Only 23 percent of those surveyed still prefer cash payments, while electronic payment methods, especially debit cards, are becoming more important. This is confirmed by the increase in contactless payments, which retailers are finding increasingly attractive as they are up to seven times faster than cash payments, explains Bernd Ohlmann, spokesman for the Bavarian Trade Association. This is in line with the study by the Deutsche Bundesbank, according to which around 50 percent of payment transactions in Germany are made with cash.

Despite these ongoing changes, many people believe that cash is still important. Ralf Wintergerst, CEO of Giesecke+Devrient, points to a significant hoarding of cash. The Bundesbank's payment behavior study from 2023 shows that the proportion of cash used as a store of value reached a high of 43 percent during the corona pandemic. Experts attribute the increase in cash in circulation to several factors, including “hoarding”, the shadow economy and its function as a reserve currency, as management consultant Gärtner explains.

Cash remains relevant

The importance of cash in crisis situations cannot be underestimated, as it does not require electricity or electronic infrastructure. This is particularly important in times of economic uncertainty and crises. Incidents such as the discovery of a million euros found in a car on the A3 in Bavaria in November suggest that cash is also linked to criminal activity.

However, the popularity of cashless payment methods is undeniable. According to the Bundesbank, 49 percent of payment methods are now non-cash, which represents an increase of 7 percentage points compared to the previous study from 2021. In addition, the share of mobile payment methods has tripled since 2021 and is now 6 percent. Cash remains dominant in the DACH region, but in Germany the share is 69 percent, compared to just 28 percent in Sweden.

The digital euro at a glance

An increasingly discussed topic is the digital euro. While only a third of respondents in Europe are familiar with central bank digital currencies, the surveys show that acceptance for digital currencies is increasing. There is a greater willingness to use digital currencies, especially in countries with higher cash usage. According to the survey, 37 percent of respondents would be willing to use the digital euro for online shopping.

Overall, access to cash remains a relevant issue. 15 percent of those surveyed find this difficult, which represents a challenge for access in urban and rural regions. Despite the progress in digitalization, the question of the accessibility of cash and its availability remains central to many people.