State of payment in Germany

There is one thing that I must put out here first. I am very much pro privacy and I try to defend the right to privacy as much as I possibly can. To give some examples:

  • I do host my own email
  • I do host my own Dropbox replacement (ownCloud)
  • I do use PGP / SMIME whenever possible
  • I do use Threema over Whatsapp as my primary messenger
  • I strongly believe in encryption by default

I even went as far as getting my passport without fingerprints in it despite the fact that those are mandatory by law here in Germany (*cough*, superglue, *cough*). Still: I am a person that prefers to pay by card whenever possible – regardless how big or small the transaction amount is. So you I guess you might call me a hypocrite for ignoring the privacy issues related to this.

The reason me being alright with paying cashless is that I am very open and transparent on my finances anyway. The important thing to note: Right now, I have a choice and I consciously have chosen to be open. Because of this, leaving a data trail with my everyday purchases is not a problem for me. The convenience of not having to deal with coins and paper bills is just worth it to me personally.

There is a movement out there advocating to abolish physical cash all together. This is something to be considered harmful, because it removes choice. You should always have the choice of doing your purchases anonymously.

Back on topic.

Germany, despite being one of the most civilized and richest countries on earth, is still a developing nation in many areas. Payment is one of these areas and it manifests itself in the Germans’ strong believe in cash: In 2014, 82% of all transactions in Germany were made using cash. When you talk to people, it is mostly because of privacy reasons and I do admire that. Again: Choice.

Fortunately, card payments are becoming more and more available giving me choice too. Practically every super market, gas station and clothing store accepts cards. However many smaller stores will tell you that they only accept “EC-Karte” (EC-Card) which stands for “electronic cash”. Officially the proper name is “girocard” since “EC” died back in 2007. However in practice, almost no one knows the name “girocard” so I’ll keep calling it “EC”.

EC / Girocard acceptance logo. If you see only this, don't expect your international debit / credit card to work.

EC / Girocard acceptance logo. If you see only this, don’t expect your international debit / credit card to work.

EC is a german national debit card system comparable to Maestro or Visa Electron / V-Pay but it will only work with debit cards issued by German banks!.

This is a dick move because practically every other country in the EU uses the international Maestro or Visa Electron / V-Pay system. Everybody using the same payment system has significant advantages for the consumer: His debit card will work everywhere regardless of which country he travels to inside the EU – except for Germany. I’ve witnessed a couple of surprised tourists that found out about that the hard way: At the cash register trying to pay up.

You might think: Okay, but German debit cards should have the same problem in reverse and won’t be accepted in neighboring countries. But you’d be wrong. German banks, knowing that all other countries around Germany are using international systems, will typically co-brand their debit cards with Maestro / V-Pay functionality. A double dick move in my eyes.

My old German debit card. It has girocard (EC) / Maestro functionality

My old German debit card. It has girocard (EC) / Maestro functionality

I clearly am a supporter of international standards and systems because I want to be able to travel Europe freely without worring about this stuff. Therefore, despite living in Germany, I have been using international cards (MasterCard and Visa credit and debit cards) exclusively for over two years now so I know what it is like to be a “tourist” trying to pay with them.

Fortunately, there is light at the end of the tunnel. Last year, two discount groceries stores (Aldi and Lidl) finally started accepting MasterCard, Maestro and Visa debit and credit cards too. Most other large supermarket chains like Penny or Rewe also take them now. In gentrified areas these cards are also welcome in most restaurants too. My favorite Pizza delivery service now accepts Paypal which enables me to use use my debit MasterCard. Heck – even the customs service of Oldenburg (where I live) took my Maestro debit card (which is purposely NOT EC-Card compatible).

Contactless payments are also up and coming. All the supermarkets I go to including Aldi and Lidl do offer contactless payment. However the staff hardly ever knows about this feature because those cash savvy Germans won’t use it. So expect to see a surprised face looking back at you when you wave your card in front of the terminal and don’t just walk away because there are likely to be questions about what just happened ;-).

Recently, I also switched jobs and I am now working in a gentrified area of Bremen. All the places I prefer for lunch in that area also will accept card payments so I will do my personal no cash challenge. I will try not to use cash for an extended period of time – at least until the end of June and I am looking forward to see how that turns out. I will probably write a post about that experience too.

In conclusion: In 2015, many of the major places started to take international debit and credit cards so it is not all doom and gloom anymore. You finally can have choice at most places: Pay with physical cash or use your cards.