End of “Cash only”: Shops will have to offer card payments in the future

dpa | In the future, shops, restaurants and service providers will have to offer at least one digital payment option in addition to cash. Federal Finance Minister Lars Klingbeil (SPD) has presented key points which, according to information from the German Press Agency, are currently being coordinated with the other ministries. The new rules are scheduled to be implemented in 2027.

“We want companies to offer a digital payment option wherever goods and services are paid for directly on site,” says the key points. This will implement a project from the coalition agreement between the Union and the SPD.

In principle, companies should be able to decide for themselves which digital payment method is offered. However, at least one European procedure must be accepted. There are no sales limits or additional fees for customers.

At the same time, cash should continue to be accepted. The aim is freedom of choice for customers. Exceptions to the obligation are provided for non-commercial organizations such as amateur sports clubs or charities. It should also be examined whether hardship regulations are necessary.

The Ministry of Finance wants to bring the bill to the cabinet this year. It also justifies the plans with the fight against tax evasion, money laundering and other financial crimes. Digital payments are documented and are therefore easier to understand.

Digital payment options have long been standard, says Jana Schimke, managing director of the German Hotel and Catering Association (Dehoga). “Customers expect them.” According to studies, more than 90 percent of businesses offer cashless payment. However, Schimke warns of costs for companies. “Transaction fees are currently calculated as a percentage of the payment amount.” Small and medium-sized companies in particular need sufficient transitional regulations for the changeover.

The plans have met with criticism in the retail sector. Legal requirements are completely unnecessary, they only create additional bureaucracy and uncertainty, said Ulrich Binnebößel from the German Trade Association (HDE). "Because a single acceptance always means that the entire range of cards has to be accepted. Otherwise, complicated customer conversations arise that cause trouble and cost time and money." There would be additional costs for retailers. The association is therefore calling for a way to pass on card fees to customers.

The recent trend in German retail has been towards cashless payments. According to the retail research institute EHI, last year 32.3 percent of sales came from cash payments and 65.1 percent from card payments. The rest was accounted for, among other things, by bill payments, transfers, installment purchases and vouchers. In terms of the number of transactions, cash was at 50.5 percent, just ahead of cards, which are used for 48.1 percent of purchases. The gap has become smaller and smaller in recent years. This is also helped by the fact that customers pay more often with their smartphone or smartwatch.

During the pandemic, a large part of the population got used to cashless payments, says Kai Hudetz from the IFH Cologne retail research institute. “Cashless payment options are no longer an additional option in retail, but are now expected as standard by many consumers.” Nevertheless, cash is often still the preferred method of payment, especially among older people. “In this respect, freedom of choice makes absolute sense,” said Hudetz.

The Federal Association of Consumer Organizations commented positively on the plans. “Consumers want to decide for themselves whether they pay with a card, smartphone or cash,” said board member Ramona Pop. Acceptance obligations for retailers and restaurants strengthened freedom of choice.