Cash as a phase-out model - the advantages of cashless payment

If you take a quick look in your wallet, you should find about 107 euros in coins and notes. At least according to a study by the German Bundesbank.

Cash is still the most popular means of payment in Germany. One might say - because for some years now, a new wind has been blowing through domestic wallets: payments with bank and credit cards are increasingly gaining in popularity; a trend that has become even more pronounced in recent weeks and months.

In this article, we'll tell you why this is so and what advantages contactless money transactions offer you in everyday life. We also take you to the next logical step: from cashless to contactless.

 

Nothing but plus points - why cashless payment is the future

Our world is becoming a little more global, more connected, faster every day - and since the Corona pandemic, actually a little more cautious. Shopping with a debit card more than lives up to these trends, because...

... card payments are more hygienic: 

Banknotes are a pretty dirty business. They wander through countless unwashed hands, cavort with their peers in never-cleaned till compartments and provide an ideal breeding ground for germs in dark, warm wallets.

3,000 species of bacteria were found on average on a single euro note by scientists at the Nuremberg Biomedical and Pharmaceutical Institute - mostly alongside remnants of cocaine and DNA traces of all kinds of possible and impossible animals. In China, in view of the Corona epidemic, they even started collecting and cleaning cash on a regular basis.

However, if you do not reach for the note and simply pull out your EC card, you avoid the hygiene problem. After all, no one but you has probably held the note in your hand, and bacteria thrive much worse on plastic than on the rough cotton that banknotes are made of.

 

... without cash you are on the safe side: 

Let's not fool ourselves: Thieves are lurking everywhere and if they rob you of your cash, it's gone. How will you prove that the fifty was still in your pocket? A lost wallet turns up robbed of its coins and notes, if at all.

If you do not use cash, the risk of being robbed of your hard-earned euros is comparatively small. Only small amounts can be spent without a PIN and every reasonable bank offers hotlines where you can have your cards blocked immediately. Just in case: the number of the worldwide blocking emergency call is +49 116 116.

... it saves a lot of time: 

Deadline pressure and time stress are part and parcel of our everyday lives. It can be quite nerve-wracking to have one of those unspeakable small change fiddlers standing in front of you at the checkout. Or, embarrassingly enough, being a penny-seeker yourself and fumbling for the last coins while the queue behind you is already rumbling.

Cashless payment, on the other hand, avoids unnecessary rummaging in the change compartment. You always have the right amount at hand and no clumsy change rolls across the floor. For your own nerves and those of all other shoppers, the EC card is a blessing.

... cashless money transactions work everywhere: 

In the past, there were often notes at the cash registers with this or a similar inscription: "EC card payment only from € 10". However, this sentence is deliberately in the past tense, because the times of the minimum turnover are now definitely passé.

Almost every shop now accepts cashless payment for even the smallest amounts - even if you only need a pack of chewing gum, you can use your EC card. In addition, in the wake of the Corona crisis and compulsory vouchers, many more traders have switched to electronic payment where previously only cash was accepted: whether it's a bakery or a kiosk, card readers can now be found just about everywhere.

Of course, also and especially abroad, where people are less attached to their cash than we Germans are. So if you're travelling and haven't had time to change your money into the local currency yet, you can be sure that your card will be happily accepted everywhere. Just check with your bank beforehand about any fees to avoid unpleasant surprises.

Cafés now also accept card payments

... you have access to further services: 

In fact, many people are still surprised when they are asked to withdraw additional cash when paying by card at the supermarket checkout.

In fact, this service is now offered by numerous traders. As a rule, it is free of charge; the only requirement is a purchase worth about ten to twenty euros.

If you can't do without cash, you don't need to go to the ATM. It is sufficient to simply do your usual shopping and then have a few notes in your wallet.

 

Another step forward: contactless payment

Shopping with credit and debit cards already has a lot of advantages. However, things can be even better, because for a few years now the next logical step has been establishing itself in our country: contactless payment.

The card is no longer inserted into the slot of a reader. It is sufficient to hold it - or alternatively the smartphone - in the immediate vicinity of the machine.

How do I know if my bank card is suitable for contactless payment?

The advantages of cashless payments are now clear, but how do I know if my bank card is suitable for contactless payments? Many banks have now replaced their customers' cards with RFID-enabled versions. So if your bank has sent you a new card without asking, that's the reason behind it.

These new models have a symbol that indicates the possibility of contactless payment. It looks like a WLAN indicator tilted on its side. If this symbol is on your card, you don't have to worry about anything else - it is RFID-enabled by default.

What are the advantages of contactless payment?

Contactless payment is the upgrade of cashless payment. First of all, it is even more hygienic than the traditional payment process by EC card. Because apart from your fingers, your plastic money does not come into contact with anything else. You don't have to place the card directly on the reader; it's enough to hold it a few centimetres away from it.

In addition, contactless payment works even faster than the cashless variant. A signature on a receipt is not necessary. PIN entry is only required above a certain amount. Until now, this was usually 25 euros, but many credit institutions increased this to 50 euros in the wake of the Corona crisis, in order to spare you as much contact as possible with grubby keypads.

Furthermore, a payment process via RFID is in many respects even more secure than was the case with the old cashless method. This is because RFID devices are difficult to manipulate and the moment of data exchange is so short that it is difficult (though not impossible) to tap into information here.

Finally, contactless payment gives you the opportunity to keep a full overview of your financial budget. Numerous banks and financial service providers such as PayPal or Apple Pay offer apps that not only allow you to pay by smartphone as an alternative to a card, but also provide you with a clear list of every transaction.

Where can I make contactless payments?

In short: almost everywhere. Because in the meantime, almost every major retailer has upgraded its system with NFC. Edeka, Rewe, Aldi, Lidl, Netto, dm, Rossmann, Ikea, Saturn, MediaMarkt, Aral, Shell ... - all are now on board and mark checkouts and shop doors with the RFID symbol.

Numerous smaller shops, which recently had to upgrade their POS systems, have also opted for the new technology. Only in smaller shops in rural areas will you have to do without contactless payment here and there. Because as we all know, the clocks tick a little differently in the village.

Are there any risks with contactless payment?

Let's not fool ourselves: every technology is vulnerable. And unfortunately, there will always be individuals who waste their energy on enriching themselves from their fellow human beings.

The greatest danger for NFC-enabled cards is RFID skimming, where 'skimming' can be roughly translated as 'skimming'. Because that is exactly what criminals try to do in such an attack: skim off information.

All they need is a device that can be bought at any electronics store and is not unlike a card reader. Equipped with this, they go into the immediate vicinity of their victims and try to activate the data exchange with their bank cards. In this way, they do not get money directly, but they do get a lot of payment information, which they can then use to go shopping on the Internet, for example.

How do I protect myself against such attacks?

To protect yourself from this kind of attack, you can put all your NFC-enabled cards in their own metal cover. This prevents the exchange of data, but makes the cards much thicker and forces you to remove them from their protective sheaths every time you shop.

Or - and this is our favoured solution - you simply carry an RFID blocker card in your wallet. This is no bigger or heavier than the rest of your plastic cards, but has the ability to nip any skimming attempt in the bud.

Because we care about your security, we would like to point out that each of our ZNAP Slim Wallets comes with an RFID shield card. And should you actually forget our shield card, the aluminium frame of our wallets will still protect you from attacks.

We also have more information on how and why in our previous magazine article: What is RFID skimming and where exactly do the dangers lurk? we have compiled for you.

As so often: the future is electronic

Equipped with so many advantages and in view of the current world situation, it is therefore probably only a matter of time before even more people in Germany do without cash and finally switch to contactless payment.

By then, hardly anyone will still be carrying 107 euros in their wallet, but all the more cards, IDs and gadgets equipped with functions that we are not even thinking about today. All you need then is a wallet that is at least as sophisticated and modern. We will be happy to advise you.

 

 

Cover by Paul Felberbauer, other images by Clay Banks, Ethan McArthur, Blake Wisz.