The Cost of Cash: German Consumers Pay Eur 150 Per Year

Cash usage is costing Germans

At a conference in Brussels, the Research Center for Financial Services at Steinbeis University in Berlin has presented its findings on the ‘Cost of Cash.’ The study found that each German citizen pays around EUR 150 per year to keep the cash system running.

The study, presented by Professor Jens Kleine, is the first comprehensive investigation into the costs associated with cash in Germany. Professor Kleine and his team found that the total private cost of cash in Germany is EUR 12.5 billion per year – a cost which the banking and retail sectors pick up and partly pass onto individual consumers. Cash costs add up throughout the whole cash cycle: from production costs, transportation costs, insurance costs, cash handling, security and through to losses of interest. With EUR 6.7 billion, the largest burden is carried by merchants, followed by banks with EUR 4.5 billion and consumers with EUR 1.3 billion.

Javier Perez, President of MasterCard Europe, commented: “The use of cash, which is still significant in many countries around Europe, comes at a high cost to the economy.  We believe that innovation in electronic payments not only delivers greater transparency of transaction but, as we see from today’s report, creates a more cost effective way of paying for all stakeholders.”

Card payments were found to reduce the cost of transactions to all parties as many of the costs associated with cash are not applicable. The study explores a number of ways countries can reduce cash payments including implementation of limits for cash transaction amounts that exceed a specific level and banning/ limiting cash payments for cigarettes and other cash-based vending machines.

Speaking about creating an efficient payment system, Professor Kleine said: “In order to reduce the cost of the payment system, individuals need to understand the real costs of the different payment methods.”

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