Wednesday, Oct 5, 2022
International Finance
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Cash is no longer the most-favoured mode of payment in Germany

Contactless payment Germany-IFM-image
Contactless payment increased by nearly 40% since the pandemic

Contactless payments or digital payments were already on the rise before the coronavirus pandemic, which originated in the city of Wuhan in 2019. Fintech startups in emerging as well as developed markets, be it the UK, US, Africa or Asia-Pacific, were changing the banking and finance landscape at a tremendous pace. The pandemic has only boosted the adaption of digital payments in most parts of the world, including Germany.

Germany, which is a part of the DACH region in Europe, was known for its love for cash. However, since the onset of the pandemic, the use of cash has gone down significantly. According to payment processor Nets, contactless payment adoption in the region, prior to the pandemic was at 44 percent, however, now it has increased to 77 percent in Germany. The numbers are significantly higher for Switzerland and Austria, which are part of the DACH region.

Another survey carried out by the Frankfurt-based Euro Card System Institution in June 2021, revealed that 60 percent of its 1,200 respondents preferred to pay digitally with credit or debit cards at the checkout. A few years, this data would have been surprising for many. So, what changed? It appears that it’s all down to the coronavirus virus. Cash was discouraged as a mode of payment in most parts of the world to stop the spread of the virus. It is assumed that it’s the fear of contamination, which ultimately got Germany to change their preferred mode of payment. Said that swiping your card in a supermarket is not the safest option either, once might still be vulnerable to contamination. The best option is paying by phone or through digital wallets.

Over the years, the rise in the number of smartphones and e-commerce has also boosted digital payment adoption across the globe. Europe is also set to see a rise in digital payment this year. According to data released by Finaria.it, digital payments in Europe will grow by 28.3 percent in 2021, reaching a whopping $1.17 trillion. According to Statista, digital payments in Europe will only increase further and are forecasted to surge by $775 billion by 2025.

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