Whether shopping, eating out or going to the cinema, consumers today often have the choice between paying by cash or card. At the same time, the debate is gaining momentum as to whether cash is still appropriate in our society or whether digital payment methods could replace it completely. This raises questions that need to be discussed: How can the supply of cash be ensured and what impact would a cashless world have on consumer protection and therefore our society?
Cash as a guarantee for consumer protection
Cash is still one of the most popular payment methods (Deutsche Bundesbank, Zahlungsverhalten in Deutschland 2021) for several reasons. One of these can certainly be attributed to its importance for consumer protection. This is because coins and notes protect privacy and offer an alternative for those who are sceptical about card payments or payments via smartphone app. Some people are concerned that the traceability of digital payment methods will turn them into ‘transparent customers’. Older people in particular, who are less tech-savvy, could experience marginalisation in a cashless society.
Free choice in the payment process is therefore crucial. This is also shown by the GLORY PAYMENT REPORT 2023, in which a good half of the Germans surveyed rated the relevance of freedom of choice as high. Our neighbours from Austria and Switzerland attach even more importance to this.
A proposed solution
One solution for ensuring access to cash could be the introduction of a ‘universal deposit and recycling’ system, in which cash can be deposited and withdrawn at special ATMs independently of banks. Among other things, this would reduce the operating costs of ATMs, as they would need to be refilled with cash less frequently or not at all. Lower fees for consumers and a denser network of ATMs nationwide would be the desired results.
For tradespeople in rural areas in particular, this would mean a remedy for ever longer journeys to branch banks. This is because, with the increasing closure of bank branches, these can become longer for depositing income or obtaining change. (Those who are prepared to accept increased distances have not yet faced any hurdles). Currently, universal cash deposits in Germany are also challenging due to the identification requirements in the Money Laundering Act (GWG).
In the last legislative period, the then federal government identified the cash infrastructure as a central point for equal living conditions in an action plan, as BDGW and AG Geldautomaten point out in their report. This is because the provision of cash is one of the services that must be guaranteed in both rural and urban regions. For this reason, the cash infrastructure must receive explicit political support.
Conclusion
Cash is essential for consumer protection in order to safeguard privacy and offer an alternative to digital payments. The mere use of non-cash payment alternatives entails a dependency on technology. To ensure a secure cash supply, policymakers should support the use of cash and could work with the relevant cash players to promote new solutions such as the universal deposit system.
Are you in favour of freedom of choice? Then you also need secure, transparent and efficient cash management. We would be happy to show you what this could look like in practice!
