Paying with cash costs less time and money, finds Bundesbank study (Feb 2019)

Feb. 12, 2019 Share Source
Busting the myth that cash is more expensive, Germany's central bank published their latest study today and found that when it comes to retail transactions, cash costs less time and money than other payment methods.

The study, "Costs of Cash Payment in the Retail Trade", was carried out in cooperation with the EHI Retail Institute and looks at consumer's cash use in retail settings, comparing it with girocard, credit card and SEPA direct debit.

While it is no secret that Germans prefer paying with cash, cashless transactions are on the rise. Even so, 3 out of 4 of the 20 billion retail transactions that occur each year in Germany, are still made with cash.

Key findings

  • Cash payments are about 7 seconds faster than card payments with PIN entry.
  • Cash payments are about 16 seconds faster than card payments with with signature.
  • Cash payments up to €50 are cheaper, since the fixed costs for cash payments are on average lower.
"At the till, cash is still the fastest and most cost-effective means of payment,"
" Johannes Beermann on the Board of the Bundesbank responsible for cash

Excerpt from Deutsche Bundesbank press release

Simulations for contactless payment

If all card payments made so far with PIN were contactless and payments for amounts below 25 euros would not have to be authorised, cash payments would continue to have the lowest cost per transaction.

Because of the speed of contactless payments, the variable costs are particularly low here. In terms of sales, contactless girocard payments had the lowest cost; This is followed by electronic direct debit, contactless credit card payments, cash payments and credit card payments with signature.

Download study here

Last Updated: July 8, 2019