Payment methods: Bundesbank: Cash and debit cheaper than credit cards

According to a study by the Bundesbank, payment transactions with cash or debit cards are significantly cheaper for private individuals than with credit cards. During the investigation, the experts also took into account for the first time hidden costs that arise for consumers from the release of data.

The study is based on a representative survey from 2023, in which the market research institute Forsa asked more than 2,000 people about the costs of dealing with cash, debit cards and credit cards.

Lots of costs that no one thinks about

In addition to the data costs, the fees for account management, for cash withdrawals from ATMs and for payment cards as well as the financial damage in the event of loss or fraud were recorded. The time required to withdraw cash or check account statements was also taken into account.

According to the Bundesbank, releasing data costs customers between 43 and 86 cents per transaction. To do this, discounts from bonus programs were evaluated and people were also asked what amount they would be willing to pay spontaneously if their data were deleted immediately after shopping. 42 percent said they were willing to pay 50 cents for it.

Annual costs calculated

The sum of all categories – fees, financial damage, time expenditure, data disclosure – results in an average annual absolute cash cost of 89.91 euros, for the debit card 102.59 euros and for the much less frequently used credit card 55.50 euros.

The result shows that cash has the lowest costs at 38 cents per payment transaction. In relation to the amount spent, the debit card that can be billed immediately is the cheapest with a cost of 1.49 percent because higher amounts are regularly paid here.

The most expensive in both categories were real credit cards, which are usually billed once a month but are used less frequently. “From the perspective of consumers in Germany, the costs of cash and debit cards are close to each other,” explains Bundesbank board member Burkhard Balz.

Cash still at the forefront across Europe

Despite the trend towards digital payment methods at the checkout, cash is still the first choice for people in the euro area. Year after year, however, fewer purchases are made in cash: 52 percent of transactions this year, and in 2019 even 72 percent were cash payments in the currency area. At the same time, the proportion of card payments is increasing: from 25 percent in 2019 to 34 percent in 2022 to 39 percent in the current evaluation by the European Central Bank (ECB).

Bundesbank study on the costs of cash and card payments from a consumer perspective