The corona pandemic has permanently changed shopping and payment behavior in Germany. In the two years of the pandemic, consumers pulled out the card significantly more often when shopping. This is reflected in the share of retail sales that has increased significantly in the last two years, according to one of the results of the EHI study “Payment Systems in Retail 2022”. Germans also spent more money per purchase in 2021 than in the previous year. In contrast, the number of purchases has fallen significantly over the last two years due to the pandemic. Cash transactions have also declined significantly in Germany.

Card payments on the rise

Customers' payment behavior is increasingly moving towards card payments, which means their share of sales in stationary retail has increased from 50.5 percent to 58.8 percent since 2019. The card's transaction share increased from 26.1 percent to 37.9 percent.

Last year, the girocard became the strongest payment method in stationary retail, ahead of cash payments, with sales of 182.4 billion euros. The market leader alone accounted for 42.4 percent of retail sales, 2.3 percentage points more than in the previous year. In addition, there are 6 percentage points that were also processed via the girocard using the signature-based SEPA direct debit procedure. With an increase of 0.5 percentage points, the share of credit cards is nine percent (sales: 38.7 billion euros).

Banking by smartphone

Contactless payment with cards and increasingly also with smartphones has now become the standard. In its statistics for the contactless girocard, the German banking industry shows an increase in payment transactions last year from 61.1 percent to 72.6 percent. For food retail companies, the EHI study shows even higher girocard contactless shares of between 78 percent (self-service department stores) and 87 percent (drugstores). The fast and particularly hygienic payment process is popular with customers and retailers alike. Mimikama has also already reported. ( HERE )

Share of payment methods in retail sales / Graphic: EHI
Share of payment methods in retail sales / Graphic: EHI

Fewer transactions

The change processes at the POS become particularly clear with the decline in cash transactions. In 2019, customers generated 46.5 percent of sales with cash - in 14.58 billion purchases. In the first Corona year of 2020, around 2.5 billion cash transactions were lost. In 2021 there were only a total of 10.11 billion purchases in which consumers used banknotes and coins. The share of cash sales fell by 2.4 percentage points to 38.5 percent.

Higher average receipt

On the other hand, the average purchase amount in German retail has increased. The average receipt was 25.90 euros in 2021 (previous year: 23.84 euros) and has therefore increased by 16 percent within two years, while total stationary sales shrank from 435 billion euros to 430 billion euros in 2021. Due to the contact restrictions, the trend was to visit stores significantly less, but then to buy significantly more and at the same time to make a significant proportion of non-daily purchases online. This caused the number of purchases to shrink from 20 billion to 16.6 billion within two years. At the same time, according to initial calculations by the EHI, online sales (gross) rose from around 60 billion euros to at least 100 billion euros in these two years.

Average purchase amounts across all payment methods / Graphic: EHI
Average purchase amounts across all payment methods / Graphic: EHI

Food retail as a cash provider

With less and less cash collected and fewer and fewer ATMs available, the so-called cash-back volume rose noticeably. Almost 90 percent of the food retailers and drugstores that are represented in the EHI “Payment Systems” panel already have the cash payment service. The average payout amount remained stable at around 95 euros. Every tenth euro collected was given back to customers in this way last year. Two years ago it was just 2.8 percent.

Risks are obvious

Especially in the last few days, the dependence on electronic payment systems has become obvious. Be it due to an impending longer power outage caused by Russian hacker collectives as part of digital warfare, not just in the Ukraine war. Or through the long-term failure of card payment systems, for example in retail, as is the case in Germany in particular. ( HERE ) The ability to pay with the card depends on the electricity that powers the systems. Obtaining cash also depends on a functioning power supply. Without electricity, neither the ATMs nor the cashback systems in the supermarket work. If the worst comes to the worst, the most well-filled account is of no use.

Cash reserve creates security

The Federal Office for Civil Protection and Disaster Risk Reduction therefore recommends having an adequate cash reserve in the house in its brochure on how to prepare for a power outage. A specific amount is not mentioned. It depends on the number of people who need to be cared for in an emergency and on personal income. Of course, this cash reserve should be kept safe. A fire- and water-proof safe serves you well. If you don't have a safe, you should think about creative hiding places that burglars won't find so quickly. No, mattresses, books, the box under the bed or the drawer at the back are definitely not included. Burglars also like to tear pictures from the wall behind which filled envelopes could be hidden. But perhaps a weatherproof metal capsule that is buried in the garden?

While in Germany no specific amount is given for a recommended cash reserve (HERE), things are different in Austria. The Austrian Civil Protection recommends 500 euros in small bills per household. ( HERE )

Source: EHI Retail Institute

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Notes:
1) This content reflects the current state of affairs at the time of publication. The reproduction of individual images, screenshots, embeds or video sequences serves to discuss the topic. 2) Individual contributions were created through the use of machine assistance and were carefully checked by the Mimikama editorial team before publication. ( Reason )