The average German has €123 in their wallet at any time, and 80% of German transactions are paid for in cash. Quartz delves into the psychology:
One explanation is that, as researchers have found, memories of hyperinflation have quite a bit of staying power. People in countries that suffered banking crises quite sensibly often prefer to save in cash—though typically in foreign currencies such as US dollars—rather than put money in the bank. (Federal Reserve Bank of New York economists found that demand for US dollars rises for at least a generation in countries after they suffer a searing experience with high inflation.) And countries such as Bulgaria and Romania, which have recent histories of currency instability and financial crises, also are quite heavy users of cash.
Levels of consumer debt in Germany are remarkably low. German aversion to mortgage debt is part of the reason why the country has some of the lowest homeownership rates in the developed world. Just 33% of Germans said they had a credit card back in 2011. And most of those hardly ever get used. In 2013, only 18% of payments in Germany were made via cards, compared to 50% in France and 59% in the UK.
The national preference for cash, then, seems to be the flip side of aversion to debt, which, in turn, can be interpreted as a sign of deep-seated doubt about the future. (German businesspeople are also notorious for their pessimism about the future.) And fear of the future, of course, is rooted in the past.
In other words, the German tendency to settle up in cash undeniably reflects the fact that for much of the last century, Germany has been either on the brink of, in the midst of, or struggling to recover from, disaster. And traumas like that are bound to leave, if you’ll excuse the pun, a mark.
As I just posted on Facebook:
'I'll tell you why Germans still use cash using cliches you hear everyday on the volatile German Street™: 'I've paid cash for things since I was 4. Why change now?' -- 'With cash, you know what you've got. Who can tell with these crazy new chips and cards?' -- 'Giving up the Deutschmark was the biggest mistake Kohl ever made' (off-topic but then again Germans go off-topic a lot) -- 'This way at least those bloodsucking bankers don't get rich from their fees and interest' -- 'I'll pay cash as long as the cashiers are smart enough to make correct change. Which most of them aren't anymore.'
And, apropos Facebook, that's why this blog has been dormant lately -- I've moved most of my online activity to Facebook. You can follow me there under my name, Andrew Hammel. If you're concerned about privacy, you can just create a fake name. I'm aware that some people dislike or distrust Facebook, but it's much, much, much, much more convenient and interactive than blogging, which is why blogging is kind of dying out, or at least changing.
Facebook is a commercial enterprise that sells your information and you also have to be careful about privacy. To me, those concerns, however valid, are outweighed by the fact that 80% of the people whose opinions I care about are on it, and we can share ideas and videos and music and cat content instantaneously.
I may still blog here occasionally if I have something to say or link to that won't fit in a Facebook post, but that may not be very often. But I'm usually quite active on Facebook, when my schedule permits.