More Payment Power Strengthens Europe's Autonomy

Cash is the Germans' favorite means of payment. However, instant payments, digital wallets, and mobile payments are increasingly shaping the payment landscape. Europe must adapt to this, says the Deutsche Bundesbank.

Payment transactions are undergoing a period of radical change: the latest Retail Payments Market Study 2025 by consulting firm Bearing Point and payment service provider Onepay reveals continuous growth in the number and volume of cashless transactions in European countries. According to the analysis, real-time payments (instant payments) and digital wallets are replacing traditional payment instruments and setting new standards.

Cash Important for “Participation and Resilience”

Nevertheless, cash remains the most widely used means of payment in Germany. Banknotes and coins fulfill “important social functions, for example, for the economic and social participation of all population groups and resilience to crises,” writes the Deutsche Bundesbank in its December 2025 monthly report. In order to check acceptance in retail and among service providers, the institute regularly examines whether consumers can use cash in everyday life.

Around 2,000 test purchases commissioned by the institute in the retail, catering, and service sectors in the summer of 2025 showed that customers can pay in cash at 99.4 percent of sales outlets, regardless of industry or company size. For example, cash payments were possible without any problems in all 30 ticket purchases tested on public transport.

However, the Bundesbank did identify restrictions in the public administration: citizens were unable to pay with notes and coins in eight out of 30 cases, for example when dealing with matters relating to identity documents or vehicle registrations.

High Cash Acceptance in Germany

Overall, however, the analysis confirms a high level of cash acceptance in Germany. “Politicians, central banks, and those involved in the cash cycle are working together to ensure that cash remains widely accepted and available as a means of payment in the future,” it continues.

At the same time, a regulation is being discussed at European level that would strengthen the role of euro cash as legal tender:

The proposal defines payment situations in which the acceptance of cash would be mandatory for businesses and public authorities. […] If abuses were identified, member states would be required to take appropriate countermeasures," explains the Bundesbank.

At the same time, however, payment transactions in Germany are noticeably shifting toward cashless methods. Card payments are currently the most important form of electronic payment, driven not least by changes in consumer behavior, especially during the pandemic.

Debit Cards Gain Market Share

Debit cards dominate the German market. According to the Bundesbank, their share was around 83 percent at the end of 2024, while credit cards lost importance, falling by seven percent to 17 percent. As the Bundesbank's study on payment behavior in 2023 shows, 97 percent of the population has at least one debit card in their wallet.

In December 2024, there were around 196 million payment cards from German payment service providers in circulation. “This means that around a quarter (26 percent) of all cards issued in the eurozone were issued by institutions licensed in Germany,” it continues. The number of debit cards issued by domestic providers in Germany rose from 111 million in 2018 to 162 million in 2024. According to the Bundesbank, this represents an annual increase of 6.5 percent.

Girocard: Widespread and Cost-Effective

The central bank identifies the widespread use of the Girocard as a key driver of this development. It remains the most widely used national card system and is the most cost-effective cashless payment method for brick-and-mortar retailers. At the same time, according to the Bundesbank, international card systems such as Visa and Mastercard are promoting the shift toward debit cards. Since 2019, they have been offering their own debit cards for the German market, which can also be used for online payments and mobile payments. Previously, the Girocard was almost exclusively used for this purpose.

National card networks are an essential pillar of European payment transactions for reasons of resilience and strategic autonomy," emphasizes the Bundesbank.

Even though card payments are widely accepted in retail, the institute says that Germany still has some catching up to do compared to other European countries. This is particularly true in the service sector and among small businesses—such as the kiosk or bakery around the corner, which sometimes still operate on a “cash only” basis.

Smart Devices Replace Physical Cards

Mobile payments via smartphone or smartwatch are experiencing particular momentum. They are increasingly replacing physical cards. Mobile payments are mostly based on digitized cards in wallets. “The share of mobile-initiated card payments in Germany is rising sharply at the checkout, from around five percent in the first half of 2022 to just under 16 percent in the second half of 2024,” according to the Bundesbank. The integration of the Girocard into mobile solutions could ensure its long-term appeal.

“Mobile payments via wallets such as Apple Pay, Google Pay, or Bluecode are growing steadily and are being used by more and more people in their everyday lives,” according to the Bering Point study. Usage is increasing across all age groups. “In Sweden, 75 percent of payments are made contactlessly with cards, and in Finland the figure is as high as 89 percent.”

Regulatory Requirements Ensure Security

Overall, the strong market penetration of card-based methods increases the requirements for operational resilience and technological sovereignty. Failures or disruptions would have a noticeable impact on the economy and society. The interaction between the various parties involved in payment transactions requires clear regulatory frameworks and interoperability standards.

“From the perspective of European sovereignty, it is fundamentally welcome if uniform European payment methods with broad market coverage are available throughout Europe,” according to the Bundesbank.

Digital Euro Strengthens European Sovereignty

From the perspective of operational resilience, the digital Euro and European payment methods that are processed via their own technical infrastructures anchored in Europe are also a useful addition. They offer alternatives in the event of disruptions or failures of the existing card infrastructure and thus contribute to maintaining critical payment flows," emphasizes the central bank.

Its conclusion: payments will become “more diverse, more individual and, above all, more digital.” “If the solutions are made in Europe, they also serve Europe's strategic autonomy.”

This is a partly automated translation of this german article.