Retail Sector Sees Increase in Card Payments, Cash Still Favored

The retail landscape is witnessing a significant shift towards card payments, with nearly two-thirds of transactions now conducted using debit and credit cards. According to research from the EHI Retail Institute, mobile payment options are gaining traction among consumers.

Recent findings indicate that cash transactions currently account for only 33.8% of the total retail revenue of EUR495 billion, a decline of 1.7 percentage points from 2023. Horst Rüter, head of the Payment Research Division at EHI, presented these preliminary insights during a conference in Bonn.

Despite the rise in card payments, cash remains a popular choice among shoppers, being utilized in over 54.6% of the approximately 20 billion retail transactions recorded in 2024. Card payments, on the other hand, contributed to 63.5% of the total retail revenue in the previous year. The remaining transaction volumes involved financing and billing purchases, as well as gift cards.

Among card payment methods, the Girocard maintains its position as the leading option in physical retail, holding a 41.5% market share, although this marks a slight decrease of 0.9 percentage points. Consumers made approximately 7.9 billion transactions using this debit card system in 2024, reflecting a growth of 5.9% from the previous year.

International debit cards, such as those from Visa and Mastercard, have also seen growth, increasing their share by 2.8 percentage points to 6.9% of retail revenue. Conversely, credit cards experienced a slight decline of 0.3 percentage points, settling at 8.3% of total retail sales. Together, these two forms of payment now account for 15.2% of the retail sector's revenue. It's worth noting that these payment methods typically incur three to four times higher costs for retailers compared to Girocard transactions, potentially affecting pricing strategies.

Mobile payment methods have also made strides, with 5.7% of in-store transactions being processed via smartphones using platforms like Apple Pay and Google Pay. The EHI reports a significant increase in mobile payments, which now represent 12.9% of all cashless transaction volumes, up from 7.5% in the prior year. The current federal coalition is advocating for retail establishments to offer at least one digital payment option alongside cash.

Additionally, cash withdrawals using the Girocard at retail points of sale have increased, rising from EUR12.31 billion to EUR13.57 billion. While this service provides convenience for consumers, it comes with costs for retailers, which amounted to approximately EUR19 million in 2024, up from EUR17 million in 2023. Overall, in-store purchases have returned to pre-pandemic levels, averaging 239 physical transactions per capita. The comprehensive study is set to be released in full by the end of June, based on data collected from 499 businesses across 35 sectors, collectively reporting a gross revenue of EUR314.8 billion.