Modes Of Payment : Germany

The vast majority of financial transactions in the Federal Republic of Germany are meanwhile handled by cashless payment. Highly sophisticated electronic remittance systems, cheques, direct debiting, credit cards and electronic payment systems are supplanting cash in day-to-day business transactions.

As late as the 1960s some German workers were still receiving their wages in cash. Today nearly every employee has a giro or salary account. In addition, more than 40 million Germans have a Eurocheque card and use this international payment system. Credit cards are also becoming increasingly popular. In 1980 some 580,000 people in the Federal Republic were using them; today the number is over 13.6 million.

For over 20 years it has been possible to withdraw cash from automated teller machines (ATM). Modern machines now accept a wide variety of domestic and foreign cheque and credit cards. Electronic exchange machines at airports and major train stations exchange foreign currencies into Deutsche Mark. The “electronic cash” system introduced in 1990, i.e. cashless payment by cheque card in conjunction with a PIN number, is used at more than 80,000 terminals in Germany, especially in retail stores and gas stations.

At the end of 1996 the money card was introduced, a card with a computer chip storing a specific amount of money which can be used to pay at correspondingly equipped registers. When the amount has been used up, the card can be recharged at the bank or at an ATM. The money card is an “electronic wallet” designed primarily for paying small amounts at checkout counters in retail stores. In 1998 all 55 million Eurocheque cards are to be equipped with a chip.

More and more credit institutions are broadening customer contact via telephone, computer and telefax. About three million customers now utilize 24-hour telephone banking services; over two million utilize home banking services via computer and T-Online.