Greece's Central Bank is tasked with eradicating physical currency.
The landscape of payment methods in Germany and Europe is undergoing a significant transformation, with cash gradually losing ground to digital alternatives, while still being protected by law to ensure consumer choice and inclusion.
In Germany, cash continues to play a significant role in point-of-sale (POS) transactions, albeit its share has noticeably decreased from approximately 55% in 2017 to around 35% in 2024. The decline, particularly around 2020, can be linked to the COVID-19 pandemic and the rise of contactless cards and digital payments[1].
However, cash remains prevalent, especially for smaller transactions, but it is slipping into the single-digit percentage range for transactions above EUR 50 as sectors like public transport and event venues increasingly favour tap-only digital payments[2].
Across Europe, there is a strong policy push to preserve payment freedom and access to cash. The European Commission proposed legislation in 2023 to guarantee access to and acceptance of cash throughout the eurozone, aiming to prevent financial exclusion as digital payments expand[3].
Germany, in particular, remains committed to consumer protections around cash acceptance, mirroring measures seen in countries like Sweden and Spain to ensure ATMs and cash services remain available as digital payment adoption grows[3].
Looking ahead, the rise of digital wallets and contactless payments in Germany is expanding rapidly, with a forecasted compound annual growth rate of over 16% for wallets, which integrate loyalty and buy-now-pay-later features, challenging traditional cards and cash[2].
The European Central Bank (ECB) is also working on a digital euro initiative, aiming to provide a central bank-backed digital currency that could coexist with cash, enhancing payment efficiency and security, while also ensuring inclusivity by respecting consumer rights to cash usage.
Bundesbank board member Burkhard Balz has expressed concerns about the decreasing number of ATMs and bank branches in Germany, and he believes that a model where banks operate ATMs jointly could be a solution to save costs[4]. Balz also supports a cash limit of 10,000 euros that will be applied throughout the EU from 2027[4].
Despite these concerns, Balz considers the proposed cash limit as a good compromise between freedom and control. He believes that the digital euro should complement, not replace cash, and he advocates for more cooperation between banks in Germany, citing the Netherlands as an example[4].
In summary, cash in Germany and Europe is declining yet remains protected by law, reflecting a balanced approach: advancing digitization and the digital euro for convenience and innovation, while securing cash as a critical option for inclusion and payment freedom. This dynamic will shape payment ecosystems through at least 2030 and beyond.
[1] Source: Statista (2023) [2] Source: PaymentsSource (2023) [3] Source: European Commission (2023) [4] Source: Reuters (2023)
In the midst of German and European digital payment transformations, traditional cash continues to hold its ground in various business transactions, with technology facilitating contactless card payments and digital wallets, creating a balance between advancement and protection. As the finance sector adapts to these changes, policy initiatives such as the European Commission's legislation aim to ensure consumer access to cash, preventing financial exclusion.
