Why the Germans Do Not Prefer Electronic Payments

The world of payments is rapidly moving towards the digital options. However, still several customers use cash and they finalized their transactions by using actual cash.

Industry experts are predicting that cash will be obsolete in a few coming years. However, there is a European country which is following a totally opposite trend. In Germany, the use of physical cash is more than any other country in the world. According to a research conducted by Federal Reserve, the people of Germany use cash in 82 percent of their financial transactions. 13 percent of these transactions are executed by using debt cards while only 2 percent of the transactions are carried out using credit cards. Germans keep more cash in their wallets as compared to the amount carried by people in other countries. On average, each German keeps $123 in his wallet. As per the research, the average amount kept in the wallet by Germans is almost double as compared to the quantity of cash kept by people in other countries. Americans keep $74 in their wallets, on average, while the people of Netherland carries $51.

The people of Germany not only like to pay in cash but also, they want complete freedom to do so. A recommendation to limit the use of cash faced extreme opposition from consumers and political experts. According to Guardian’s report, there was a ban imposed in Germany on making any payment via cash which has worth more than 5 thousand pounds. The purpose of this ban was aimed at stopping money laundering and the use of cash to support terrorist activities. Such bans are commonly imposed in other countries of European Union but in Germany, this suggestion faced strong criticism by the majority of the political groups.

According to Guardian, the head of Germany’s Central Bank, Jens Weidmann said while talking to the journalist of Germany’s newspaper named “The Bild” that if Germans get the impression that the use of cash is going to be gradually restricted in the country, it can prove to be actually fatal.

Even the newspaper was also against this suggestion. In February 2016, the newspaper published an open letter and urged the readers to sign it and send it to the finance minister.

The commitment of German people with the use of actual cash is so strong that most of the people are storing the cash in their houses. As per Wall Street Journal, the majority of Germans are withdrawing their money from banks and storing it in the safes inside their houses. This trend is so intense that a vault making company reported 25 percent increase sales increase in the first half of the year 2016. Several other such companies are delivering their maximum production in order to meet the increased demand of vaults.

Why do Germans Prefer Cash?

Despite the fact that electronic payments have made the things extremely easy for the people, why Germans still prefer physical cash over electronic payment? One reason for this is the security. Germans believe that payments via physical cash are more safe and reliable as compared to electronic payments.

To cater these issues, it is recommended that such a payment partner should be chosen which is compliant with the standards of data security. Moreover, the payment processor chosen by German people should accept several payment options. Online traders can only accept electronic modes of payment, but if Germans are provided with multiple payment options, they can easily choose the one which is best suited to their needs and expectations.

According to the Wall Street Journal, another reason behind German’s hesitation regarding the electronic payment is inflation. Because of the negative interest rate implemented by the European Central Bank, the Germans have to pay for making the deposit into the bank. Furthermore, the history of hyperinflation also made the people of Germany reluctant towards the use of online payments.

Because of the fact that the payment systems continue to get more and more advanced, it is expected that with the passage of time, the Germans will also move towards electronic payments, especially, when they have to make international payments. Business companies have to work hard in order to reach German people, but these companies shouldn’t give up.

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Post-Truth: Facts Pale by Comparison

Chuckling to myself, I could not pass up the opportunity to highlight the Oxford Dictionaries’ international word of the year for 2016, post-truth, an adjective defined as:

“relating to or denoting circumstances in which objective facts are less influential in shaping public opinion than appeals to emotion and personal belief”

Why was I chuckling?

Since 2002 my research, writing and consultation to help everyday people learn the whole truth about money, wealth and the economy has fallen mostly on deaf ears. As often as possible I source public domain Federal Reserve and U.S. Government agency information, statistics and graphs to share and expound upon the realities of actual inflation, economic policies and central-bank money mechanics.

But it does not seem to matter how official my sources are when it comes to who wants to know.

The problem, as I have analyzed it over the years, is that the corporate, for-profit financial services industry appears to enjoy an open-ended, evergreen marketing budget when it comes to “educating” the public on topics of money, wealth credit, debt and the economy. Frankly, I cringe every time I hear the supposed facts and advice of conventional financial wisdom replete with critical contextual omissions. So-called objective facts about money and the economy are half-truths at best when you are not made privy to the big picture.

As defined, and in this case, post-truth is the conventional financial data and advice that simply reinforces erroneous existing beliefs, while appealing to the emotions (Chase Freedom, use credit to pay for a wedding, get rewards, etc.). Self-preservation and the need for growth is the name of the financial-services game when it comes to shaping the scope of monetary facts that get passed on to the “consumer.” What is in your best interest, ultimately, is not their concern, as is the case with all for-profit entities.

Buyers beware.

I’m not saying that industry professionals are evil and out to get you. Not at all. Probably most advisors, consultants, bankers, traders, etc. mean well, yet they unwittingly disseminate pricey financial advice no longer relevant to the economic times we live in, and often based on incomplete data, in my view. They suffer the same limitations to their knowledge-base as everyone else via their industry education and training.

After meeting R.Buckminister Fuller, reading his book, Critical Path, and then co-producing the last leg of his speaking tour in 1983, my eyes were opened. There was no going back. I needed to dig deeper into the history of monetary issues.

Post-truth is not a new concept. For me it began way back in 2002 when heading out on my journey to revise common knowledge about money, wealth and the economy. It has been an uphill battle ever since. Perhaps one-by-one people will discover the merit of another way to think about, earn, save, spend and invest money. Perhaps word will spread to help give more people the opportunity to experience financial relief and wealth-building by taking advantage of a sound, out-of-the-box personal finance approach.

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Stay Healthy and Wealthy in 2017

When you make those New Year’s resolutions, you’re thinking about fresh starts and the year ahead. What you might not realize is that some resolutions also could save money. Here are some popular resolutions that could help get you and your finances in shape in 2017.

Quit smoking: You can save money by stopping a pack-a-day habit, which can cost between $1,825 and $3,650 per year, depending on the cost of cigarettes in your area. Nationally, a pack-a-day smoker is going to spend an average of $2,000 annually on cigarette costs.

Set up and stick to a realistic budget: If you want to resolve to stick to a budget in 2017, you must start with a realistic plan. People tend to make financial resolutions the same way they do a weight loss plan. If you start with lofty goals they will be unachievable within a month. List your priorities for spending rather than restricting your spending. Focus on necessary expenses then include a certain amount for retirement savings. Then with the remaining money you have each month, set aside a little for enjoyment. It’s critical you have rewards in your budget.

Exercise regularly: You’ll save money in several ways with regular exercise. On average, Americans are spending $7,800 annually on health care, according to the National Association of Health Underwriters. But exercise brings real savings. “If people are eating right and exercising three times a week for 20 minutes a day, they see prescription costs decrease by 70 percent and medical costs decrease by 30 percent,” says Ric Edelman of Edelman Financial Services.

Stop spending money recklessly: One of the best ways to stop spending your money recklessly is to track where it is going each month. Check with your credit union and download their free mobile budgeting app that shows expenditures by category so you can monitor your spending. A great way to get your spending under control is quit trying to “keep up with the Joneses”. If you want to fix your bad spending habits in 2017 start hanging out with other spendthrifts because you will likely become one yourself.

Eat healthier: A healthy eating plan can be as — or more — economical than fast food. It’s a total myth that eating healthy is expensive. Buy smaller but leaner cuts of meat, eat protein-rich beans and buy produce in season when it’s freshest and least expensive. A smaller amount of a leaner cut can slice your food bill and your bad cholesterol.

Build an emergency fund: Nothing takes the stress out of financial situation like spare cash. If you are among the millions of Americans that don’t have enough money set aside to cover unexpected expenses or emergencies, then you should resolve to build one in 2017. Experts recommend putting enough money in a savings account to cover six months’ worth of expenses in case of unexpected emergencies like job loss, maternity leave or medical issues. You can always apply a small amount of your paycheck towards this account, so you make sure it is hidden from you.

Pay off high-interest debt: Paying down credit card debt is one of the most popular short-term goals in 2017. Try focusing on paying off your high-interest credit card debt before other debts because it is more expensive. And, it you are motivated by seeing those results first hand, start by paying off your card with the lowest balance first so you can feel that sense of accomplishment.

Create your estate plan: An important 2017 resolution would be to tie up any financial loose ends for your loved ones so they aren’t left trying to pick up the pieces. Make sure you have a will or trust that designates who’s in control of your assets. You certainly don’t want the state court system to make that decision for you. Don’t forget to designate a guardian for your children, and someone who will make financial and healthcare decisions for you if you are unable to do so.

Develop common financial goals with your partner: Many times finances are the biggest source of conflict between couples. It’s important that couples sit down and create a financial plan. It doesn’t usually work to try and manage their finances separately.

Any of these resolutions can help improve your financial security in 2017. I suggest tackling one financial tip each month so you don’t get overwhelmed. Then as you get accustomed to the new approach to spending and saving, add another. By the time 2017 starts dwindling toward 2018, you will find you’ve made progress on achieving your financial goals.

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