Boom in Card Payments in Retail Post-Pandemic
Retail Sector Continues Expansion in Card Transactions - Retail payments via cards experiencing persistent expansion, according to study findings.
Card payments in retail are experiencing a surge, with approximately 63.5% of sales totaling 495 billion euros in 2024 being made using cards. This marks a 1.7 percentage point increase compared to the previous year, as shown by a study by the Cologne-based retail research institute EHI [source: German Press Agency].
Meanwhile, the proportion of purchases made with cash has plummeted to 33.8%. The remainder of sales are primarily accounted for by financial and invoice purchases along with vouchers. In comparison, nearly 46% of retail sales were still made in cash pre-pandemic in 2019.
Remarkably, despite the dramatic shift towards card payments, cash remains the most commonly used payment method in terms of transactions, with more than half (54.6%) of the approximately 20 billion transactions in 2024 still involving cash. Study author Horst Rüter explained this discrepancy [source: EHI].
During the Corona crisis, the number of retail transactions in Germany dropped as low as 16.6 billion, but the value has now returned to pre-pandemic levels. Card payments were used in over 44% of these purchases, marking a doubling of the card payment share since 2019. The market leader in card transactions remains the Girocard.
Mobile Payments on the Rise
The share of mobile payment transactions via smartphones or smartwatches, such as Apple Pay or Google Pay, has seen a significant rise, according to the study. In 2024, more than one in eight (12.9%) of all card-based payments are now made using mobile devices, making it increasingly popular. In comparison, the share was 7.5% in 2023.
In addition, there has been a noticeable increase in consumers withdrawing cash while shopping. The total volume of such withdrawals increased by around ten percent year-on-year to 13.57 billion euros.
For the EHI study, data from 499 companies were evaluated, representing approximately 100,000 businesses across 35 industries with a combined gross turnover of 314.8 billion euros.
Pre-Pandemic Trends and Post-Pandemic Shift
Prior to the COVID-19 pandemic, the adoption of card payments was already growing due to increased convenience and security. However, cash was still a significant component in retail transactions.
The pandemic significantly accelerated the shift towards digital payments, including card transactions, due to hygiene concerns and government policies favoring non-cash transactions. This trend has continued post-pandemic as e-commerce has surged and digital wallet usage has become more widespread. In self-service retail, the adoption of cashless transactions has reached nearly 100% in some environments.
This trend of increasing card payments in retail continues to flourish as technology evolves and customer preferences adapt.
- The community policy in 2023 might consider the increase in card payments as a key aspect of vocational training, given the surge in card payments in retail post-pandemic.
- As mobile payments via smartphones or smartwatches have risen significantly, vocational training programs in the field of technology and finance could focus on teaching individuals about mobile payment systems such as Apple Pay or Google Pay.
- The EHI study, which evaluated data from over 400 companies, revealed that business profits could potentially increase with the continuous growth in card payments, given that these transactions totaled around 495 billion euros in 2024.
- Amidst the rise in digital payments, it would be valuable for vocational training programs to address the potential impact of coronavirus on businesses that still rely on cash transactions, to prepare students for the ever-evolving industry landscape.
