Retailers Face Challenges From Increased Card Payments, Demand For Cash Withdrawals, HDE Says

By Dayeeta Das
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Retailers Face Challenges From Increased Card Payments, Demand For Cash Withdrawals, HDE Says

Increasing card payments and the growing demand for cash withdrawals are posing challenges for retailers in Germany, according to the German Retail Association (HDE).

In 2023, around 61.8% of sales were processed via card payments in Germany, while cash payments declined 2% year on year to account for 35.5% of sales, according to the latest data from the EHI Retail Institute.

Ulrich Binnebößel, head of the Payment Transactions Department at HDE stated, "The trend towards non-cash payments is continuing and a further decline in cash payments must be expected in the future.

"This poses challenges for companies due to rising fees for card payments and less cash while handling costs remain at least the same."

Cost Driver

The HDE also highlighted that the decline in cash payments could become a cost driver for companies.


This is because a high proportion of fixed costs for the processing of cash transactions, transport to the bank, and the procurement of change will lead to rising overall costs amid falling demands.

Moreover, the offer to pay out cash as part of a purchase is becoming increasingly popular and could compel companies to procure extra cash to pay out to customers or restrict the service.

"Customers are often virtually dependent on the voluntary service provided by local retailers, as ATMs are being dismantled and bank branches are being closed," Binnebößel added.

Demanding And Costly

Overall, the handling of cash in retail is becoming increasingly demanding and costly, the HDE noted.


"In addition to any costs for the procurement of banknotes, it is usually the card transaction fees that lie behind cash withdrawals. The fees are paid by retailers and have to be offset against final prices," Binnebößel explained.

The HDE called on card-issuing banks to waive the merchant fees for cash withdrawals.

"After all, this relieves the burden on the banks' own cash infrastructures," he concluded.

Read More: Card Payments To Make Way For More 'Seamless' Payment Formats, Study Finds

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