A deeply ingrained mistrust of credit has long kept cash king in Germany, where the average citizen carries 103 euros ($113) in their pocket. 

“Cards have long been the most costly means of payment for merchants while cash transactions cost them almost nothing,” Ulrich Binneboessel of the HDE retail sector federation told AFP, explaining the reluctance to accept credit cards.

More than half of the amount spent in Germany on private purchases, 53 percent, is paid in cash, according to a study by the Bundesbank central bank — one of the highest rates for an advanced economy.

In terms of the number of transactions, the figure hovers at 79 percent despite the fact that nearly all Germans have debit cards, which are much more widely accepted by vendors.

A third of those polled said they only paid in cash, far more than in other Western countries, with the rate particularly high among pensioners.

One among them, who asked to be identified only as Reinhard, always carries money and knows exactly how much he has on him at any point in time.

“In a shop, I think it's a waste of time to pay any other way but with cash,” he said.

Reinhard, who lives in the western state of Hesse, said he is afraid he will be charged too much and discover it only when he receives the bill in the mail, and is wary of hackers and identity thieves who prey on cardholders.

Historical trauma

Security and privacy are high priorities among Germans, who tend to be more conservative consumers with a strong aversion to debt. The vestigial trauma from 1920s-era hyperinflation which helped usher in the Nazi era still colours the national thinking.

“Consumers in Germany have little desire to experiment,” said Carl-Ludwig Thiele, a Bundesbank board member.

But “changes in how people pay are coming, step-by-step”.

In a revolutionary move by German standards, discount retailers Lidl and Aldi started accepting Visa and MasterCard this month, after electronics chains Media Markt and Saturn took the same decision in late May.

And from the autumn, Media Markt and Saturn customers will be able to check themselves out at the till by scanning their cards or mobile phones.

“It is no longer relevant to talk today of Germany as a country of cash payers. Perhaps the Germans just need a little longer than others to be convinced of the benefits of the new payment systems,” said Horst Rueter of research institute EHI in the western city of Cologne.

Buyers who came of age in the Internet era are rapidly embracing a world without cash, with 20 percent of German 14 to 29 year olds already paying using their smartphones, according to a survey by the high-tech industry federation Bitkom.

“With the technical possibilities now available, coins and notes are an anachronism,” Peter Bofinger, one of five Wise Men experts advising the German government on economic policy, told Der Spiegel news magazine.

Beyond the benefits to consumers, he said, less cash would improve efficiency and make it easier to combat money laundering and other financial crimes.

Kind of freedom

However, reassurance about the safety of payment methods and a ceiling on costs are crucial because “the willingness of consumers to pay for payment services is extremely low,” said Thiele.

The European Union this month passed a regulation capping fees on payments made with debit and credit cards, which should also spur their use.

“The trend towards less cash will continue, although this will be a continuous and slow process,” Rueter said.

Cash will only cover less than half the payments in the “medium term”, the Bundesbank said.

For its defenders, cash offers a kind of freedom. Three in four Germans said they would object to merchants refusing cash in the future, according to a survey by polling group YouGov.

“Each country has its own way of paying,” Rueter said, based on “a mixture of cultural specificity, specific needs and common sense” which can evolve with time.

Germany, for example, stopped using cheques about 15 years ago, calling them obsolete.