Germany is, undoubtedly, a cash-focused society. Increasing the use of cashless payments methods in Germany will therefore require commitment from the banks and retailers involved. However, at present, many German retailers still ask their customers to pay with cash instead of using a card. Despite the costs and risk associated with the handling of cash - for both the retailer and the bank - German retailers still prefer it, as the banks in Germany currently facilitate the handling of cash. If the use of cashless payment methods in Germany is to grow, retailers need to be further educated around the costs incurred for both parties in handling cash.

From the consumer point of view, many do not fully appreciate the benefits of cashless payment methods, such as cards, and believe they do not enable them to manage their money as effectively. Furthermore, the banks do not see how they would benefit from greater card usage, as if consumers move to card payments, they will lose the cash handling revenue currently received from retailers.

The card has been presented to consumers as the ‘key' to their account, allowing them to access funds and account information, but nothing else. For example, banks will often recommend the use of cash and traveller cheques to customers, rather than cards, when customers go abroad. The fact that German banks are doing very little to protect consumers against internet fraud and skimming has also led to a reduction in confidence in using cards.

It's clear that a new way of thinking is required. The ZKA, which represents the interests of the banking association and oversees the implementation of standards for inter-banking communication, aims to co-ordinate new industry initiatives. However, since all decisions are taken by a committee and require unanimous agreement, innovation takes time to be defined and implemented. The ZKA also protects the market for German banks by establishing all types of hurdles (technical and administrative) for any new market entrant.

Germany is not a country known for fast innovation, and payment technology is no exception. Banks and retailers will not adopt new cashless payment methods based just on hype. But, when a method is proven to work and provides the level of security and standards that the German banking sector is used to, they can adopt new technology very quickly.

All in all, I believe that the German market is ready and willing to adopt cashless payment methods and has the infrastructure to implement these technologies. However, the banks must also want this change. And up until now, this has not been the case...