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Why Germans pay cash for almost everything

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Re: Why Germans pay cash for almost everything

#351

Post by DamnYuppie »

codegeek wrote: post #94
_Codemonkeyism wrote: post #81

Earlier quoted context omitted.

As a German a.) I mostly pay cash because it's faster b.) some shops that can afford it only have cash payments to save on CC costs Not because of inflation or because something happend 100y ago.

As an american, I find it strange that cash is faster. Most people who pay cash need to wait to get the change back unless they know the total beforehand and happen to have exact change. In the US, credit card machines are very fast even the chip enabled ones. Cash workflow: - Cashier tells you the total amount - You look in your wallet/purse - You spend time counting exact change if you do have it - If not, you take…

You obviously have never been to a Home Depot or Lowes on a weekend and watched in abject horror how long it takes most people to navigate the pin pad to complete their CC purchase! The speed with which the transaction is completed is 100% dependent on the ability of the card holder to navigate all the prompts. At most stores I now have to wade through 4-5 prompts for input before my transaction is complete, this takes up to 30 seconds. This is nowhere near as fast as cash is if one is prepared and has their money out.

Re: Why Germans pay cash for almost everything

#352

Post by deftturtle »

_Codemonkeyism wrote: post #280
killerpopiller wrote: post #176

Earlier quoted context omitted.

I also suspect tax avoidance rather than transaction costs

Margins in many businesses are razor thin in Germany. Which is the reason Walmart and others stopped doing business in Germany. For many businesses 1-2% transaction cost is the difference between success and failure. But yes tax avoidance is a huge problem in restaurants in Germany.

How do they pay their employees if margins are razor thin? They'd have to operate on a huge scale to have enough profit to cover expenses and especially payroll. I would love to see a comparison of the balance sheets between some German and U.S. small businesses. Small businesses don't have the huge scale to live on a razor thin margin, so that's why I'm curious.

Re: Why Germans pay cash for almost everything

#353

Post by bluGill »

kuschku wrote: post #306
bluGill wrote: post #256

Earlier quoted context omitted.

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 l…

Not really. Until 2016, the costs were 30€/mo+0.125% for EC, 160€/mo+4% for VISA and MasterCard, 160€/mo+7.5% for AMEX in Germany. Most German merchants run on margins below 1-2%. Good luck paying 7.5% transaction fee on a margin of 1%. This is why EC was far more widely accepted, although even that was too expensive for small places, such as farmers selling stuff on the market.

Nobody to my knowledge has every measures the costs of cash, it is just something they accept. With credit cards it is easy to measure because you get a number, but with cash it is not, you have to calculate too many different parameters and figure out what applies where.

Re: Why Germans pay cash for almost everything

#354

Post by majewsky »

Samuray wrote: post #312

First, while it's true that the German "Schulden" is related to "Schuld", it's also true that one of the definitions of "debt" is "sin". I don't know if many anthropologists really have wasted much time thinking about this one, but it seems pretty irrelevant to me. Second, the German banking system is actually very modern. While the Americans and British are still sending cheques through the post, Germans are regular…

> the Americans and British are still sending cheques through the post

I'm from Germany, and I have to ask this... WHY?

Related anecdote: When I was still living with my parents, I had to cash in cheques from time to time for them. The cheques came from the lottery which they were playing, but they had no realistic possiblity at all to cash them in (the next branch of their bank was over an hour away by car), but I had an account at the local bank in the small town where I lived.

Re: Why Germans pay cash for almost everything

#355

Post by empath75 »

pascalxus wrote: post #239

The question isn't why germans pay cash. the question is, why would you do it any other way?? I'll tell you why. In other countries we allow credit card companies to tax the masses. By creating regulations that prevent merchants from charging a different price for cash vs credit, you effectively force everyone to pay 2.5% extra for every purchase. That 2.5% goes straight to the credit card companies, even if you pay…

It's a transfer of wealth from people who are struggling to pay their cards off every month to people who have rewards cards and pay their balances every month.

Re: Why Germans pay cash for almost everything

#356

Post by cosinetau »

paulsutter wrote: post #281
cosinetau wrote: post #232

Earlier quoted context omitted.

What was the social stigma of using a credit card at a grocery store? I think I kinda remember some remnants of that when I got my first card and started using it to pay for everyday/trivial purchases. In fact, I remember the real reason for the wait in the line was were most folks taking time to write cheques. It was a lot like waiting for someone to count bus fare on the coinop.

There was a time when furniture stores, appliance stores, etc, provided credit directly. You could buy items from the store and make payments over time. Credit cards were seen as a generalized way to make these purchases, if you go far enough back in time.

Good point. So it was seen as not being able to pay in full for groceries? Despite the fact that bad cheques can kinda do the same thing as not paying the credit bill?

I would imagine however, that over time a personal reputation is gained for writing bad cheques. I guess the difference is whose problem it becomes: a credit agency, or the person who knowingly accepts a potentially bad cheque.

It's funny how we judge each other for using new tools.

Re: Why Germans pay cash for almost everything

#357

Post by richardknop »

germanier wrote: post #328
richardknop wrote: post #299

Earlier quoted context omitted.

Also remember that whole Eastern Europe (including East Germany) had no electronic payments before fall of Soviet Union. So credit cards took off in US in 80s but half of Europe just got out from under communism in early 90s and they were not very trustworthy of western banks so would prefer cash. Also the banking and payment infrastructure was non existent so needed to be built from scratch. This probably slowed dow…

Not sure how far east you want to go but in both Poland and the Czech Republic card payments are far more prevalent than in western Germany.

With young people yes. But older generation still uses cash heavily.

Re: Why Germans pay cash for almost everything

#358

Post by nickpsecurity »

codegeek wrote: post #94
_Codemonkeyism wrote: post #81

Earlier quoted context omitted.

As a German a.) I mostly pay cash because it's faster b.) some shops that can afford it only have cash payments to save on CC costs Not because of inflation or because something happend 100y ago.

As an american, I find it strange that cash is faster. Most people who pay cash need to wait to get the change back unless they know the total beforehand and happen to have exact change. In the US, credit card machines are very fast even the chip enabled ones. Cash workflow: - Cashier tells you the total amount - You look in your wallet/purse - You spend time counting exact change if you do have it - If not, you take…

You're oversimplifying it. At some places (eg Subway), it was about 1 second timing for credit cards. At most stores, you would have to do things like say whether it was credit or debit, tell it yes/no to cash back, and tell it yes/no to whether amount is OK. All of them seemingly do it a different way. So, if you're used to it, the process might take several seconds. If you're not, significantly longer. Under Chip and PIN, you have that plus a several second wait in most places I go.

Cashiers with decent performance will take a solid bill like a twenty and give you back your change in a few seconds. If you want to give specific amounts of change, that adds time but so does when you split credit cards to put specific amounts on them. If anything, the cards can take longer since the transactions are separate. Wise users of cash also already have most of their money ready for payment by the time the order is totaled since it saves them time.

So, for most orders I see, the cash and credit take about the same time if customer is moving decent speed. The only difference is if the customer is moving slow for whatever reason (eg indecision or fumbling for stuff). That can happen with either but happens more for cash since credit users look for one item (the card).

Re: Why Germans pay cash for almost everything

#359

Post by david-cako »

Credit card stigma is interesting to me. For the individual that would otherwise be paying with a debit card, why would you not want to earn rewards on that?

Treat it like real money, pay every month, literally zero downside.

That said, I imagine rewards in the US are much more attractive than elsewhere, since credit card companies have so much profitability to distribute.

Re: Why Germans pay cash for almost everything

#360

Post by briandear »

m_mueller wrote: post #33

As a Swiss German I think the currency stability argument is moot. Swiss Frank is one of the most stable currencies available and we still have a similar attitude to cash as Germans. IMO it's mainly due to the following reasons: 1) CC is slow, at least in Switzerland. Like in Germany, efficiency is baked into the culture - people hate to wait on someone paying his chocolate bar with credit card. It's also not rare fo…

Regarding credit card security. In Europe, liability is on the person, in the U.S., it’s on the bank. So the “insecurity” of a U.S. credit card is misty irrelevant to the consumer.
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