“Card payment only from ten euros” or “cash only”: such signs should be a thing of the past in Germany in the future. The federal government wants to oblige all retailers and restaurants to accept card payments.
“The desire of citizens to be able to pay digitally even for everyday transactions carried out locally still fails too often today due to the lack of acceptance of non-cash payments on the part of companies,” says a key issues paper from the Federal Ministry of Finance. In principle, the CDU/CSU and SPD had already agreed on such a regulation in the coalition agreement.
There are inexpensive solutions
Merchants often point out the high costs when accepting payments with cards, smartphones or smartwatches. The German Bundesbank has calculated that cash payments are 0.43 euros cheaper for a single transaction than Girocard (formerly EC card - 0.60 euros), debit cards (0.69 euros) or credit cards (1.00 euros). However, with higher sales the differences become blurred. If the costs are calculated based on sales, the Girocard is the cheapest alternative for the retailer at 0.8 percent of sales. With 2.1 percent of sales, the debit card is ahead of cash (2.3 percent), while credit card payments incur 2.4 percent of sales.
Nevertheless, a payment expert is convinced that the obligation to accept card payments will not ruin merchants' business. Such a regulation has existed in Italy for more than ten years. The provider Sumup only charges a one-off fee of 17 euros for a device that can be used to accept cashless payments. In Spain almost every street musician has it with them. The fees that Sumup charges traders are 1.39 percent. This means: out of 100 euros in sales, 98.61 euros remain. For a subscription fee of 200 euros per year, they even drop to 0.79 percent, but are higher for certain credit cards such as American Express.
Cashless payments predominate
Last year, people in Germany paid for their daily purchases digitally more often than with cash. According to the Bundesbank, 55 percent of transactions were cashless. The share of debit cards is 26 percent. Ten percent of purchases were paid for using a cell phone or smartwatch. Some customers of direct banks, such as ING Deutschland or DKB, do not have a Girocard, nor do the customers of neobanks such as Revolut or N26.
This is where things get exciting. Because the key issues paper from the Ministry of Finance still needs to be coordinated. The ministries of economics and energy, justice and consumer protection, digital affairs and state modernization, the interior, labor and social affairs and the Chancellery are involved. The key points paper states that “companies therefore have the choice between the digital payment methods available and commonly used on the market, whereby at least one European method must be accepted”.
In addition to the Girocard, only Visa and Mastercard, both US card companies, are used. The option with the European payment system Wero via QR code and instant transfer at the store checkout will only be available next year. Sumup also offers a solution for this, but at significantly higher fees, namely 2.5 percent. Then retailers only had 97.50 euros left for every 100 euros in sales.
