According to recent media reports, the German government is considering whether consumers should be allowed to pay only sums of up to 5,000 euros in cash. What would this mean for the payment industry?
It could be, that in the near future, Germans can no longer pay invoices of more than 5,000 euros in cash. According to recent media reports, the federal government is considering the introduction of a cap on all cash payments in Germany – if a European solution cannot be found.
Wirecard’s Editorial Team has asked Christian von Hammel-Bonten, Executive Vice President Global Product Strategy at Wirecard: What would this mean for the payment industry? He answered: “We welcome this discussion as it presents the benefits of electronic payment transactions. Card payments offer increased transparency, control and security for merchants. Consequently, the risk of losses is limited and transactions are traceable.”
There are already similar limits in other European countries
He added: “Furthermore, accepting card payments has now become more cost-effective than processing cash transactions. Mobile card reader devices which work in tandem with smartphones and tablets also enable tradespeople, service providers and other contractors who will be affected by this planned restriction to accept mobile payments simply and securely. There are also secure and efficient corporate card solutions for companies who have, until now, provided their employees with cash. Companies stand to benefit in many ways: for example, credit can be added and deducted from the card in real time, while a comprehensive overview of all payments made by employees ensures complete transparency.”
It is not unusual, that governments limit consumers cash spending: In Poland for example, only amounts of up to 15,000 euros are allowed in cash, in France and Belgium it’s only 3,000 euros, in Spain 2,500 euros and in Italy the limit is actually at 1,000 euros. In Sweden, the government rejects cash completely. Here, consumers have to pay cashless if they want to use for example public transportation.
For the payment industry in Germany, a cash limit would be a good sign
In January of this year, Austria also introduced a new law and went a step further: Laws which came into effect on 1 January 2016 oblige companies situated in Austria with annual sales of more than 15,000 euros and cash transactions in excess of 7,500 euros to use electronic recording systems and digitally register and archive till receipts for ten years.
Now, for the payment industry in Germany, a step towards a cash limit would be a good sign! The country is still lagging behind in cashless payments in comparison to other European countries. Now, it’s time for a rethink in a more conservative market! But maybe all in all, politicians should seek a European solution with which every country is satisfied.