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Why Germans pay cash for almost everything

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Re: Why Germans pay cash for almost everything

#301

Post by kuschku »

pmoriarty wrote: post #284
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…

Sorry, but what is "EC" and "SEPA", and what do they have to do with the real cost of dealing with cash?

Germany doesn’t use the MasterCard or the VISA network, instead having an entire separate payment network, EC, which uses under the hood wire transfers via SEPA. This is the E in EMV (EC, MasterCard, VISA) which created most of modern payment infrastructure.

SEPA is the Single European Payments Area, standardizing how to process fast and cheap payments, all transfers are in Euro, from 2018 on also having a standardized API between banks, wire transfers are free or below 1 cent each, etc.

Re: Why Germans pay cash for almost everything

#302

Post by plopz »

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.

Is this something that only triggers above a certain threshold? On the east coast, whenever I go to the grocery store, its just insert chip and press ok. I've never had to sign or enter a pin.

Re: Why Germans pay cash for almost everything

#303

Post by stuaxo »

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…

Just count your cash as you queue. Though that whole thing in the US of showing prices not including tax seems pretty wack, what's the point ?

Re: Why Germans pay cash for almost everything

#304

Post by danudey »

_Codemonkeyism wrote: post #261
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…

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…

Cash Workflow:

- Cashier gives you the total - I pull out the bills I have and find the best denomination - I get a bunch of change back I have to stuff into my pocket along with my bills while getting my stuff out of the way for the next person

Credit card workflow: - Cashier tells you the total - You say "debit" or "credit" and the cashier pushes a button on the register - You pull out your credit card, touch it to the machine, and then put it away and start packing up your stuff to leave - The machine beeps and you leave

Far less fuss, far less opportunity for dropping change. Simple and efficient. I have my card out, tapped, and back within 5 seconds and my transaction is complete, and I never have to worry about if I have enough or too much.

Re: Why Germans pay cash for almost everything

#305

Post by icebraining »

germanier wrote: post #272
discombobulate wrote: post #108

Earlier quoted context omitted.

Looks like the Bitcoin laws are v favourable in DE. You can pay taxes in BTC(!) & BTC is a unit of account[0]. That makes sense if the memory of WR hyperinflation is written to the citizens' mind. [0] https://en.wikipedia.org/wiki/Legality_of_bitcoin_by_country...

You can't pay your taxes with Bitcoin (the Wikipedia author probably means something else?). You can't even pay most tax in cash even if you wanted to. Bank transfer in EUR is the only way.

The Wikipedia author cited a quite unclear CNBC story that said that bitcoin "can be used for tax and trading purposes".

From what I can tell from other sources, what it really means is that one must pay VAT when purchasing stuff with it.

Re: Why Germans pay cash for almost everything

#306

Post by kuschku »

bluGill wrote: post #256
killerpopiller wrote: post #176

Earlier quoted context omitted.

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 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.

Re: Why Germans pay cash for almost everything

#307

Post by germanier »

distances wrote: post #254
germanier wrote: post #213

Earlier quoted context omitted.

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.

Both Netto with and without a dog in the logo (competing chains with the same name) now accept credit cards, same with other discount markets such as Aldi, Lidl, and Kaufland. Major exceptions in the food sector are most Penny and many Edeka stores (a lot of the latter I would categorize as "upscale"). You are right about independent stores and restaurants. Unless you know for sure all places you plan to go to take cards you should carry enough cash.

Re: Why Germans pay cash for almost everything

#308

Post by kuschku »

eatbitseveryday wrote: post #118
wila wrote: post #112

Earlier quoted context omitted.

Not German, but I simply don't want to leave my trail of what I am spending and where.

And what of purchases made on websites?

As very few Germans even have credit cards, most Germans pay online (if they don’t use PayPal) via SEPA wire transfer or SEPA ELV. And even PayPal and Amazon support using SEPA ELV to pay for stuff.

Re: Why Germans pay cash for almost everything

#309

Post by danudey »

plopz wrote: post #302
romwell wrote: post #291

Earlier quoted context omitted.

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.

Is this something that only triggers above a certain threshold? On the east coast, whenever I go to the grocery store, its just insert chip and press ok. I've never had to sign or enter a pin.

No, everywhere else in the world (basically) it's chip-and-PIN. In the US, it seems to be chip-and-signature (which defeats one of the biggest benefits of chip cards).

When I was in Seattle at a restaurant trying to pay, the owner told me that they also couldn't accept tips if they used chip cards. I thought she was BSing me into paying cash but she tried to swipe the card instead so that I could.

It's amazing how, in the US, even the implementation of new technologies is broken and awful.

Re: Why Germans pay cash for almost everything

#310

Post by pmoriarty »

kuschku wrote: post #301
pmoriarty wrote: post #284

Earlier quoted context omitted.

Sorry, but what is "EC" and "SEPA", and what do they have to do with the real cost of dealing with cash?

Germany doesn’t use the MasterCard or the VISA network, instead having an entire separate payment network, EC, which uses under the hood wire transfers via SEPA. This is the E in EMV (EC, MasterCard, VISA) which created most of modern payment infrastructure. SEPA is the Single European Payments Area, standardizing how to process fast and cheap payments, all transfers are in Euro, from 2018 on also having a standardiz…

Thank you for explaining those, but I'm still not sure what they have to do with the "real cost of dealing with cash". EC and SEPA seem to be digital payment technologies, and therefore aren't dealing with cash.
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