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Why Germans pay cash for almost everything

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Re: Why Germans pay cash for almost everything

#251

Post by germanier »

aembleton wrote: post #183
wongarsu wrote: post #131

Earlier quoted context omitted.

In a German supermarket there are two notable differences: People pay with rounded bills most of the time, cashiers are fast at returning change (amounts are usually a single cent below the full euro for each item, so change isn't a big problem). The credit card workflow requires you to sign as well (or alternatively sometimes your pin if it's a debit card). Also, no swiping, only chip readers. So in essence, taking…

I've never lived in Germany, only visited as a tourist a few times to several different cities. I've never had to sign in the last couple of years when using my credit card. Fewer smaller shops would take it than in the UK, but otherwise I never noticed any difference.

It comes down to the card, not store. Many German cards require you to sign (actually stores bypass the card entirely and just use it to read your account number and make you sign a SEPA direct debit mandate).

Re: Why Germans pay cash for almost everything

#252

Post by bluGill »

hobo_mark wrote: post #164
pantalaimon wrote: post #111

Earlier quoted context omitted.

> Credit card workflow: > - Cashier tells you the total amount > - You look in your wallet/purse > - You swipe card/insert in chip reader > - Done You forgot the part where you have to enter you PIN and wait for the transaction to go through, or sign the receipt.

That's because, as I was shocked to find out, most POS in the US don't ask for a PIN! Convenient indeed, until someone gets ahold of your card.

This isn't shocking if you understand the different legal context around credit cards in the US.

Historically if in the US if someone gets a hold of your card, if I report it as soon as I know there is a problem you are legally out $50, and the credit card company and merchant has to eat the rest of the loss. In most cases the credit card companies figure since they have to take the rest of the loss they may as well get the customer service points by taking that $50 as well. As such it is only a minor inconvenience if someone gets a hold of your card, most of which is related to waiting for them to mail you a new one. Because of this people don't care about chip and pin being more secure: security was not their problem. This is also a factor in why the US is much more likely to use a credit card: there are no anecdotes about someone losing a lot of money because of their card.

By contrast in Europe you were liable for all amounts charged on your card before you report it, even if you had no way to know about the charge. Since the credit card companies didn't have to take a large risk they typically didn't agree to take it on. As such a credit card is much riskier, and so it is prudent to not use your cards if you have a different option. When chip and pin came out consumers were interested because it gave them some ability to limit their loss: their chip/pin card could be lost without the potential of great loss.

Note that the above is historical, and like all generalizations is false in some way. Laws change all the time which means the current reality is probably different - but the historical reality is still shaping our world. Europe is not a country, each country in Europe always had their own laws which differed in some way from the next.

Re: Why Germans pay cash for almost everything

#253

Post by stevesimmons »

egeozcan wrote: post #54
mtmail wrote: post #2

According to https://www.cashforless.de/ec_cash_info/Fakten_zur_Kartenzah... methods for payments in stores 2011 was 57% cash, 5.3% credit card, 33% debit card ( https://en.wikipedia.org/wiki/Electronic_cash ). > "of course, [the Germans] attitudes toward currency must owe something to Germany’s tumultuous monetary history. During the Weimar-era hyperinflation that peaked in 1923 [...]" > "the German tendency to sett…

Debit card is pretty equivalent to cash, though. When my friends and family from my hometown (Istanbul) visit me the first time, they are usually quite shocked that most shops here do not accept credit cards at all. In Turkey (a place I call micro-USA), many credit cards automatically divide the payments for some transactions to 3+ months, whereas here in Germany, there's always some bureaucracy involved, even if you…

The Turkish payment system really is an eye-opener for its sophistication. I used to work in credit cards and did a study tour to Istanbul in 2004 to see it first hand and talk to both merchants and the issuing banks.

One big difference in Turkey is many shops had 5 or more card terminals, each in the colour of the issuing bank. Banks competed for both merchants and consumers by offering value-added features unique to their terminal, such as instalment credit instantly accessible to only their customers.

Instalment credit was popular in Turkey following the economic crisis in 2001 (3000% interest rates) because many people simply didn't have the cash to pay up front for major purchases such as whitegoods or even shoes.

In most other countries, shops have only one payment terminal, supplied by the acquiring bank (acquiring = acquires payment transactions, as distinct from issuing = issuing payment cards to consumers). That terminal has to support all cards equally, using the base Visa/MasterCard standards. Hence there are no value-added payment options.

Re: Why Germans pay cash for almost everything

#254

Post by distances »

germanier wrote: post #213
distances wrote: post #83

Earlier quoted context omitted.

> Also, almost every store accept touch-pay method Definitely not the case in Berlin where cash is king, German bank cards work often, and credit cards are rarely accepted.

Pretty much every national chain, especially supermarkets, accepts credit cards. You won't have as much luck at owner-operated stores or restaurants. Berlin is probably the most card-friendly place in Germany by the way.

I'm indeed thinking independent stores, family-run restaurants and discount markets such as Netto which only accept the German card; local kiosks and fast-food places take cash only. I can confirm credit card works in upscale markets (like Rewe) and major chains.

Re: Why Germans pay cash for almost everything

#255

Post by herbst »

taway_1212 wrote: post #228
herbst wrote: post #197

Earlier quoted context omitted.

It's super fun and easy. But A) there is a risk as everyone can create a stripe account and buy a charger. Personally I would never notice. B) every transaction creates costs. Some visible (depit charging fee) some hidden (credit transaction fee) C) At least in most of Europe it is far from widely supported, even thought it's growing for a while now. Except you stick to the most touristy places that is. In south east…

> A) there is a risk as everyone can create a stripe account and buy a charger. Personally I would never notice. Personally, the convenience of: not having to wear a wallet at all (I just carry the card in my pocket) and not having to deal with coins, negotiate if I'm paying a big bill etc. is just amazing. Even if someone steals $10 from me once in a blue moon, it's well worth it.

For me it's a different world anyway. Currently I carry about $300 in 4 currencies, a debit card and a credit card. I travel a lot and without a stack like this I would have been stuck many times.

The credit card never really saved me. It really just is there to make life a little easier.

Re: Why Germans pay cash for almost everything

#256

Post by bluGill »

killerpopiller wrote: post #176
hocuspocus wrote: post #136

Earlier quoted context omitted.

As someone who lived two years in Germany a) That's a good joke. From faster to slower: NFC > PIN > signature > cash. b) You should look into the real cost of dealing with cash. EC is stupidly cheap since it's basically the cost of a SEPA direct payment (we're talking 1-2 cents per transaction). Debit card payments can also be pretty cheap in Europe. All those annoying restaurants and small shops that take only cash…

I also suspect tax avoidance rather than transaction costs

Transaction costs for cash is probably higher than for credit cards.

For cash you have to count and recount that cash at the end of the shift, and then the bank counts are recounts it again. This is a significant amount of labor. By contrast with a card once the initial transaction is done everything is put into the computer electronically and no human has to look at it again.

Also cash is subject to theft. In some locations this risk is a significant part of the transaction costs - not just the cash, risk of death in the robbery. Electronic payments are subject to loss, but generally there is a trail to chase when it happens, and the possibility of death is much less.

Re: Why Germans pay cash for almost everything

#257

Post by triztian »

mtmail wrote: post #2

According to https://www.cashforless.de/ec_cash_info/Fakten_zur_Kartenzah... methods for payments in stores 2011 was 57% cash, 5.3% credit card, 33% debit card ( https://en.wikipedia.org/wiki/Electronic_cash ). > "of course, [the Germans] attitudes toward currency must owe something to Germany’s tumultuous monetary history. During the Weimar-era hyperinflation that peaked in 1923 [...]" > "the German tendency to sett…

I can add that in Mexico the culture is to also not carry that much cash - due to risk of robbery and losing the wallet or it getting washed in laundromats.

Re: Why Germans pay cash for almost everything

#258

Post by tehwebguy »

tbomb wrote: post #241
guelo wrote: post #220

Earlier quoted context omitted.

I find the workflow with the new chip cards much less convenient to the point that I'm starting to prefer cash or Android Pay if it's available. Even though I lose the 2% cashback bribe.

Which card is that, that takes away the incentive? I use Apple Pay pretty frequently and still get my cashback rate, or double points incentives on the cards that I use.

Among others the Citi Double Cash, earned in 2 steps:

1% earned when spending

1% earned when paying the bill

Cashback is not immediately applied to the balance so it's actually 2% and not something like 1.9999999. No annual fee but it's not really worth it to apply for this card per se, better to get another card that comes with a signup bonus (this one never does) and "product change" it to this card by calling in.

Re: Why Germans pay cash for almost everything

#259

Post by pmoriarty »

codegeek wrote: post #175
hobo_mark wrote: post #164

Earlier quoted context omitted.

That's because, as I was shocked to find out, most POS in the US don't ask for a PIN! Convenient indeed, until someone gets ahold of your card.

Almost all credit cards are 0 liability to the consumer. Even if someone gets a hold of my card, I can call the credit card company and get all fraud charges reversed. That's why I personally always use a credit card EVERYWHERE. I hate cash and I hate to wait in lines. But sure, they have an electronic trail on me which frankly, I don't care too much about. If the Govt wants to get you, they WILL get you.

"Almost all credit cards are 0 liability to the consumer. Even if someone gets a hold of my card, I can call the credit card company and get all fraud charges reversed."

That's true only if you or the credit card company notice the fraudulent transactions and act on them within the limited grace period, which I believe is something like 3 months.

Many people don't actually keep their receipts or reconcile them with their credit card statement. So unless they get an unexpectedly huge credit card bill, they might not even notice that they were victims of fraud and in that case the "0 liability" credit card policies are worthless, because they get defrauded anyway.

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