Paying cashless: Why it is becoming increasingly popular – and what you should pay attention to-Paying cashless is also becoming increasingly popular in Germany. But how does it actually work, what are the disadvantages – and when do fees apply? We clarify the most important questions.
Do you have cash in your wallet right now? If the answer to this question is “yes,” then you are not alone. Cash is still the most frequently used means of payment in Germany. But: less and less people are paying in cash – many people now use cashless payments.
Cashless payments: This is what you need to know
- How long will there still be cash in Germany?
- Why do customers still pay with cash?
- What are the advantages and disadvantages of cashless payment?
- How does a Paying cashless payment work?
- What fees apply for cashless payments?
- What is the limit for card payments?
- How often can you make contactless payments without entering your PIN?
- What does Code 51 mean when paying by card?
- Which app do I need to pay with my cell phone?
How long will there still be cash in Germany?
Even though cashless payments are becoming increasingly popular in Germany, there is still no talk of cash being abolished for a long time. The North Rhine-Westphalia consumer advice center has also asked itself this question and believes: “ That is currently very unlikely .” In fact, the EU Commission is also looking into the role of cash and wants to strengthen the euro as cash and at the same time enable a digital euro .
Why do customers still pay with cash?
Many people in Germany use cash. Because the fact is: it has many advantages. According to the European Central Bank (ECB), cash offers freedom and independence because it does not require third-party involvement and does not require electricity or the internet. Paying Cash may not be refused in shops or restaurants because it is considered legal tender – unless other payment methods have been agreed upon in advance. According to the ECB, cash also protects the privacy of customers and can be used by anyone. It’s also fast, secure and a store of value – and: It helps you keep a better eye on expenses. This is exactly the point supported by a study that found that people spend more when they pay cashless.
What are the advantages and disadvantages of cashless payment?
For most people, cashless payments have simply crept into everyday life. Have you ever thought about the pros and cons? The comparison portal Verivox has listed these once . The portal sees the advantages of the fact that it is no longer necessary to go to the ATM to pay and that the risk of theft is reduced. Also practical: it is often cheaper abroad because the exchange rate is better than with cash. In addition, liability for misuse is limited to 50 euros, provided there is no gross negligence.
However, cashless payments also have disadvantages. According to Verivox, cashless payments can lead to spontaneous purchases and staggered billing makes it difficult to keep an overview of expenses and income. The portal also mentions that special care is required with the PIN and password because the account holder is liable without limitation if gross negligence can be proven in the event of misuse.
How does a cashless payment work?
There are many ways to make cashless payments in Germany. Payment is possible by credit card, Girocard and with a smartphone or smartwatch. If a so-called NFC chip (Near Field Communication) is integrated into the card, smartphone or smartwatch, contactless payments are also possible. With this “contactless function” the card or smartphone only needs to be brought close to the card reader. But: For amounts over 50 euros, the PIN code must also be entered – sporadically even for smaller amounts.
In any case, the payment recipient reads the account details automatically and the amount is either debited directly or charged to a credit card account, depending on the payment method.
What fees apply for cashless payments?
Anyone who notices after shopping in the supermarket that the retailer has charged a surcharge for card payments does not have to accept this. Because: Since January 2018, retailers have no longer been allowed to charge fees for payments by credit card, debit card, bank transfer or direct debit , according to the Chamber of Commerce and Industry for Munich and Upper Bavaria. However, less common credit cards can be an exception. According to Stiftung Warentest, not all retailers adhere to this . In this case, the consumer organization recommends filing a complaint with the Competition Center .
It’s also worth taking a closer look when it comes to mobile payments with your smartphone. Because here too, some financial institutions charge fees of up to 80 cents per transaction. The tricky thing is that the institutes generally do not inform their customers about these costs, complains the Hamburg consumer advice center. If in doubt, it’s better to ask the bank.
What is the limit for card payments?
If you want to pay large amounts without cash, you should definitely find out about your bank’s limit in advance. Because: This limit is different for every bank. The limit is often 1000 euros per day – but it can also be higher or lower for the individual consumer. This is often linked to the creditworthiness of the account holder or the bank guidelines. There may also be a weekly limit.
The limit can be found in the bank’s contract documents – but it can often be easily changed via the app, online or on site.
How often can you make contactless payments without entering your PIN?
If you shop frequently during the day, it may be annoying for you – for everyone else it is primarily a protective mechanism. After a maximum of five payment processes or a total of 150 euros, “ the bank’s background system requests the payment process by inserting the card and entering the PIN ,” according to the Federal Association of German Banks. In general, the PIN is only required to be entered for amounts over 50 euros.
What does Code 51 mean when paying by card?
Has your card payment ever been declined in the past and “Code 51” was displayed on the payment terminal? This means either that there is not enough credit in the account or the card limit has been exceeded.
Which app do I need to pay with my cell phone?
The selection of apps that allow you to make mobile payments using your smartphone or smartwatch is becoming ever larger. The apps are offered by banks, tech companies, payment service providers and bonus services. You can find a large overview of the apps and information about Apple Pay and Google Pay here.
By the way: Various customer apps now also offer the option of mobile payment. The apps from Edeka, Netto and Payback even work without NFC technology , informs Stiftung Warentest. With these apps, customers have to request a code in the store, which they then hold up to the contact point on the checkout terminal.