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Why Germans pay cash for almost everything

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Re: Why Germans pay cash for almost everything

#401

Post by true_religion »

george_kaplan wrote: post #386
exelius wrote: post #365

Earlier quoted context omitted.

My theory with Germany specifically is that the Germans I have known have all been extremely protective of their privacy. I'd be interested in seeing stats on social media adoption in Germany, because my hypothesis is that they lag the rest of the world. If privacy is such a concern (and particularly privacy from one's own government), then the use of cash makes sense. My guess is that this distrust of government did…

>I'd be interested in seeing stats on social media adoption in Germany, because my hypothesis is that they lag the rest of the world. Not only do they lag in general, but I also remember a study which showed that in Germany higher education levels are associated with significantly less social media use, while it's quite the opposite in the rest of the world.

That's true. The fastest growing social network within German universities was an anonymous one. This is opposed to the USA, where Facebook was the fastest growing network based on the ideal of knowing exactly what classes Y person on your campus went to.

Re: Why Germans pay cash for almost everything

#402

Post by herbst »

alasdair_ wrote: post #380
herbst wrote: post #255

Earlier quoted context omitted.

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.

I just got back from a four-country trip (3 currencies) and having a credit card was very useful for hotels and car rental places that want to "pre-authorize" charges (often 250 EUR or more). When I tried using my debit card and they ended up taking the money and then refunding it over a week later.

Good point. I don't drive car but in western countries I basically had to pay the bikes worth as deposit because I didn't carry a credit card. Plus this was seen as super unusual (even having a this high euro amount on hand was seen as suspect)

Re: Why Germans pay cash for almost everything

#403

Post by Perseids »

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…

I've talked to an Aldi employee as of late and he said Aldi is proud to now have the fastest Card processing of all the German stores (within the regulatory limits: you have to put in your PIN or sign the receipts except for those fancy/scary NFC chips) and the Cash workflow is still faster, according to their own statistics. Consider that I already look into my purse while standing in line to get an overview of my available coins and that the cashier starts to collect the likely change the moment they tell you the total amount. This speeds up the process considerable compared to the – likely more cash-inexperienced if I follow your description – American cashiers.

I can also second the opinion of many other commenters that the privacy implications of credit cards, especially the RFC ones which allow for invisible tracking, is a huge turn down of card payments in Germany.

And last but not least, as a developer, I gotta vent some air and complain that credit cards payments are huge pain in the butt, because of all those pesky special cases that arise from fraud prevention and risk reduction. Which isn't necessary for any sane payment method which can collect money directly from your bank account without the possibility of any charge-backs. This is one of the core reasons which persuaded me a European Fintech Startup Scene is necessary, so that Stripe with its CreditCard-centric API doesn't stand uncompeted.

Re: Why Germans pay cash for almost everything

#404

Post by hottycat3 »

miguelrochefort wrote: post #237
lower wrote: post #116

Earlier quoted context omitted.

I (German) have never used NFC payments and was curious how that would work with my bank. Turns out they want me to install an app on my phone for this, which is definitely not going to happen.

> Turns out they want me to install an app on my phone for this, which is definitely not going to happen. Why not?

Because we don't want to be tracked by the bank what stuff we buy?

Re: Why Germans pay cash for almost everything

#405

Post by gregmac »

jhasse wrote: post #379
leokennis wrote: post #370

Earlier quoted context omitted.

I was on holiday in Germany. In The Netherlands I pay everything with my contactless debit card, where you hold it near the reader, wait 1 second and then you've paid. Every cashier in Germany (provided they accepted cards in the first place) insisted on "taking" my card, sticking it in the machine for a non-contactless payment, then hand me the machine so I can enter the PIN, then take back the machine, wait for the…

But ... what if you lose your card?? I guess Germans are generally very precautious and wouldn't trust contactless debit cards.

This is also why I prefer using credit over debit cards: with credit, a fraudulent transaction (before being cleared) is merely decreasing my available funds (and because I generally pay off my balance monthly, this has zero impact on my life). With debit, the money comes out of my account, and only once a fraud investigation is complete do I get my money back.

Contactless cards also typically have a per-transaction limit in the area of $100~$200, so the amount of damage someone can do without the PIN and before you cancel the card is quite limited. I actually wouldn't be surprised if you do too many transactions in a certain period of time it would ask you to do a PIN transaction.

Re: Why Germans pay cash for almost everything

#406

Post by true_religion »

romwell wrote: post #291
_Codemonkeyism wrote: post #261

Earlier quoted context omitted.

Cash workflow: - Cashier tells you the total amount - I get a 10 EUR note from my trouser pocket - Cashier gives back money - I put money in trouser pocket - Done - Home: I put all spare money in a large glass jar Credit card workflow: - Cashier tells you the total amount - You look in your wallet/purse - You swipe card/insert in chip reader - You insert PIN number - You shield your PIN entrie from the people next to…

Note for the American readers: in the glorious lands across the ocean, chip cards of all kinds use a PIN instead of a signature, which makes way more sense anyway. Chip & sign is an American abomination.

In the US, the credit card security comes from the vantage of "it's quite literally.... not your money". If there are any failures in security, the bank pays, thus ease of use is of greatest concern to the consumer.

In the USA, its rare that you'd have to sign for anything under $20.

Re: Why Germans pay cash for almost everything

#407

Post by germanier »

bluGill wrote: post #353
kuschku wrote: post #306

Earlier quoted context omitted.

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.

I'm pretty sure every single German supermarket chain measures that, it's just a requirement to operate at those margins. The Edeka cooperative published in 2012 that their all-in cash handling cost is 0.14%. The 2013 Steinbeis Cost of Cash study[0] estimated a much higher number of 2.7% for merchants. The truth is probably somewhere in between.

Such studies have also been used to arrive at the EU interchange cap.

[0]: http://www.steinbeis-research.de/images/pdf-documents/CFP_Co...

Re: Why Germans pay cash for almost everything

#408

Post by spiznnx »

romwell wrote: post #291
_Codemonkeyism wrote: post #261

Earlier quoted context omitted.

Cash workflow: - Cashier tells you the total amount - I get a 10 EUR note from my trouser pocket - Cashier gives back money - I put money in trouser pocket - Done - Home: I put all spare money in a large glass jar Credit card workflow: - Cashier tells you the total amount - You look in your wallet/purse - You swipe card/insert in chip reader - You insert PIN number - You shield your PIN entrie from the people next to…

Note for the American readers: in the glorious lands across the ocean, chip cards of all kinds use a PIN instead of a signature, which makes way more sense anyway. Chip & sign is an American abomination.

I love signature, because I play the credit card sign up game. Hard to remember PINs when you open a card a month.

Also because if my card gets stolen, I'm assured that my pin wasn't lifted by camera or keypad shim. The signature will be not present or not mine on fraudulent transactions, so I can tell my card issuer to fix it and not worry about them telling me I had "poor PIN security" or that it was somehow my fault.

Re: Why Germans pay cash for almost everything

#409

Post by Retric »

overcast wrote: post #388
Retric wrote: post #332

Earlier quoted context omitted.

Until you get caught. The problem is not so much being an experienced pickpocket, the problem is getting to that point and then living off of it for 40 years without spending a lot of time in prison.

Of course it's "until you get caught", and then subsequently released to just start over. Thieves exist, getting caught isn't a deterrent. You're taking it from the perspective of someone logical, with a vision of the future, savings, etc.

Actual data suggests pickpockets are in massive decline. I suspect criminals are more rational than you might think. http://www.npr.org/2011/03/06/134298101/pickpocketing-an-art... Sure, you can make a living picking pockets, but drugs / cyber crime etc. have more 'advancement' potential.

Re: Why Germans pay cash for almost everything

#410

Post by germanier »

Perseids wrote: post #403
codegeek wrote: post #94

Earlier quoted context omitted.

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…

I've talked to an Aldi employee as of late and he said Aldi is proud to now have the fastest Card processing of all the German stores (within the regulatory limits: you have to put in your PIN or sign the receipts except for those fancy/scary NFC chips) and the Cash workflow is still faster, according to their own statistics. Consider that I already look into my purse while standing in line to get an overview of my a…

I assume you talk about Aldi Süd? Their card handling is pretty fast and they can even start scanning the next customer's items while the machine is still processing. Aldi Nord on the other is hand is (while still faster than average) not particularly noteworthy.
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