On 5 February 2025, the Deutsche Bundesbank held its sixth cash symposium in Berlin. Around 120 participants from politics, industry and society attended.
Bundesbank Executive Board member Burkhard Balz spoke out in favour of a future that includes cash. Payment habits among the general public are, changing for example, mobile payments using a smartphone or smartwatch tripled within the space of just two years from 2021 to 2023.
In his speech, Balz wants all to work together to ensure that cash keeps its time-tested place in an increasingly digitalised world.
While the frequency of cash transactions is declining in Germany, cash remains the most widely used payment method. In 2023, 51% of all transactions were conducted in cash, accounting for 26% of total transaction value. However, since the COVID-19 pandemic, cashless payment options have gained significant traction.
In his speech, Mr Balz also mentioned that access to ATMs is becoming increasingly difficult, with 15% of the respondents to the survey ‘Payment Behaviour in Germany’ now reporting that they find it difficult to get to an ATM, compared to just 6% in 2021.
Acceptance of cash at physical points of payment is also in decline. Although cash is still widely accepted at 94% of physical points of sale, this figure has declined from 97% in two years. Less than half of transactions paid at public authority offices were able to be paid in cash.
In a study conducted by the Bundesbank, two-thirds of the population want to continue to have the option of using cash. Respondents went further than this. When asked about the future, more than 70% wanted cash to be used to the same extent as it has been thus far or even used to a greater extent again.
Mr Balz spoke about future payment scenarios based on a recent study, ‘Cash of the Future’. It outlines three potential scenarios for cash usage by 2037:
So, even in Germany, the preservation of cash is not a given. In two of the three scenarios, usage, access, and acceptance significantly decline, weakening cash’s stabilising function in crises.
In this context, Mr Balz said that the access to and acceptance of cash must be maintained, suggesting that Germany should learn from the lessons learned of other countries.
The Bundesbank regards cash as its core physical product and does not expect this to change, which is why it is actively committed to cash.
In this context, the Bundesbank believes cash could be complemented by the digital euro in the future. It does not see cash and the digital euro as competitors, but as complementing one another.
Kolja Gabriel from the Association of German Banks, Matthias Schroth from the Austrian National Bank (OeNB), Jelena Stapf from the Bundesbank, and Oliver Krist from the pro-cash association Bargeld zählt! (Cash Counts) took part in a discussion about the challenges in the digital age and possible measures, to maintain the attractiveness of cash.
Particularly in times of crisis, cash with its many advantages would be the means of payment of choice.
Mr Schroth provided an important example from Austria. The OeNB initiative there, entitled ‘Cash for All Cases’, is intended to sensitise Austrians to the importance of keeping small amounts of cash at home as a crisis precaution. The OeNB recommends keeping a sum of €100 per family member in small denominations in a safe place. Pre-printed envelopes labelled ‘Bargeld für alle Fälle’ (cash for all eventualities) have been made available for free distribution at each of the approximately 380 branches of the Austrian Post Office.
A second panel discussion focused on the topic of ‘Chaos, Catastrophes, Crises: Can Cash Save Us?’. The economists Gerhard Rösl, Franz Seitz and Nikolaus Bartzsch discussed how various crises in different countries have had an impact on demand for banknotes, and how cash can have a stabilising effect in the event of a crisis.
Mr Bartzsch showed results of a study on ‘The Demand for Banknotes in Crises from an International Perspective’ from March 2024. This showed that the number of banknotes in circulation, both for small and large denominations, increases in times of crisis, although the strength and duration of the reactions varied from country to country.
Participants emphasised the need to take proactive measures to maintain the infrastructure in order to ensure that the population has access to money even in a crisis. The availability of money can create trust in a difficult time and stabilize a society.
In Germany, although cash is still popular, the trend is one of decline. All participants jointly appealed for measures to be taken now to preserve cash. If the infrastructure is lost, it will be difficult and expensive to rebuild it, as can be seen in neighbouring countries such as the Netherlands and Sweden.
Kirsten Bock, from the German Data Protection Foundation, spoke about ‘Cash in a Free Society’, explaining that the anonymity of cash is important for individuals and for society. While electronic payments with the electronic trace could enable surveillance and profiling, no personal data can be retrieved from cash payments.
Payment behaviour is changing, even in Germany. While cash remains widely and extensively used, and with cash sentiment strong, early indicators are showing change is coming – access, acceptance, adoption of mobile wallets etc.
Acknowledging the strengths of cash is good, but actively supporting cash will be key.
