21.04.2016

#Cash: The most preferred method of payment is cash – also on the internet.

The discussion in recent months has shown: People around the world don't want to dispense with cash. As good as the arguments against cash may seem – the arguments in favour are simply more substantial.
Kurt Pribil of the Austrian National Bank recently stated in the industry magazine Report plus: " Some three-quarters of all transactions in retail are paid in cash. (…) It is obvious that Austrians love their cash. They especially prefer to pay smaller amounts in cash. Cash has many benefits. In the case of smaller amounts, it is cost-effective and you always have an overview of what you have spent."

Ewald Just, honorary professor of the Marketing department at the Vienna University of Economics and Business, adds: "In reality (...) three-quarters of the transactions at the point of sale (PoS) at retail or service enterprises are paid in cash. All other transactions are already non-cash transactions: salaries and wages, which used to be paid out in cash, have been being paid by non-cash means for a long time now. The same goes for the payment of rent, electricity, gas and water as well as all business transactions and all payments for and by public institutions.

Yet when making daily purchases, it's about convenience and also about security and freedom. Accordingly, cash is and will remain the central factor when paying, as the following figure shows. It compares the share of cash with the number of transactions and with the share of amounts of money moved. In all countries, we see that the first value is higher than the second one – which means that predominantly small amounts of money are paid with cash .

Actually, a survey conducted by the German Central Bank revealed that 96% of all transactions lower than €5 are paid in cash. The higher the amount becomes, the share of cash payments decreases to 24% for transaction of €500 or more. paysafecard as "cash for the internet" fits in with these results with its average transaction volume of around €24.

As more and more money is being moved online nowadays, the issue concerning cash payments for online shopping is just as virulent as in stationary trade. And here too are solutions that are cash-based, even if the final step of the payment is digitized. But it's all about the benefits of cash: Convenience, security, freedom.

The most secure data is the data that doesn't change hands, which is why more and more people are sceptical when it comes to disclosing their credit card number or their IBAN. Solutions that do not need this data are most popular among consumers.

And by the way: Cash is by far the most popular Christmas gift – the German consumer research institution GfK determined that in Germany alone, a volume of € 3.5 billion was given as cash presents. The second strongest product category was clothing and accessories with €1.8 billion, which is just slightly more than half of the amount spent for cash presents.

A survey conducted by the German Central Bank revealed further surprising facts: Every German has €103 cash in their wallets, €5.73 of which in coins. And the share of cash payments in the overall number of transactions remained from 83% in 2008 to 79% in 2014 surprisingly constant. The "end of cash" is therefore nowhere in sight.

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