Coalition agreement: Federal government wants to make digital payments mandatory

Berlin. "Cash only" could soon be history. The coalition government wants all stores to accept cash payments and offer at least one additional digital payment option. This is intended to create "true freedom of choice in payment transactions" – everyone should always be able to decide for themselves how they want to pay. According to the coalition agreement, the plan is to be introduced gradually.

The aim is also to “combat tax fraud in cash-intensive sectors such as the catering industry and thus protect the many tax-honest entrepreneurs,” said SPD finance politician Michael Schrodi in Welt am Sonntag.

The German Hotel and Restaurant Association (Dehoga) sees a blanket requirement for all restaurants and bars as a major challenge, as it told RND. "Meaningful digitalization is indeed relevant; many restaurants and bars are already up to date, partly because their guests expect it. But for a general requirement, the digital infrastructure, practicality, and conditions of service providers must be right," the Dehoga Federal Association stated. Exceptions must be made, especially for small and micro-enterprises.

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What the Association of Hoteliers and Restaurant Owners thinks: At the weekly market or in the summer at the ice cream parlor, it should still be possible to quickly give your child a few coins.

Another argument of the restaurant lobby: Cash payments work even if the power or internet connection fails. Events like the nationwide card payment outage in September 2024 demonstrate that digital payments are associated with risks, according to the German Hotel and Restaurant Association (DEHOGA). The idea that a restaurateur has to keep their customers at their tables when the internet crashes and customers are weaned from cash: From the DEHOGA's perspective, that would be a nightmare.

For the German Retail Association (HDE), the mandatory card payment requirement does not create "true freedom of choice," as stated in the coalition agreement. It would be better to "provide more cost-effective cashless payment methods instead of supporting providers with an economic stimulus package for payment terminals," says HDE payment services expert Ulrich Binnebößel.

Ulrich Binnebößel is an expert for payment transactions at the German Retail Association (HDE).

Source: The Court Photographers/HDE/dpa-tmn

According to the HDE, most retailers already offer both cash and card payments. However, this requires an individual assessment. "Where card payments are not possible, the reasons should be determined. For example, for companies with particularly low margins, the additional costs of an additional payment option could deter them," says Binnebößel.

Merchants incur costs both for the purchase or rental of the payment terminal and for the technical processing of transactions.

The Central Association of the German Bakery Trade supports the federal government's plans because they also aim to ensure the option of cash payments. "It is important to us that all shops, service providers, and retailers in Germany are required to accept cash payments," said Managing Director Friedemann Berg.

Friedemann Berg, General Manager of the Central Association of the German Bakery Trade.

Source: Central Association of the German Bakery Trade

In addition, the Bakers' Association is calling on the federal government to legally limit fees for withdrawing, depositing and handling cash for companies to a maximum of 0.05% of the respective amount.

In Germany, the trend is clearly toward card payments. This is also confirmed by a survey conducted by the opinion research institute YouGov. 62 percent of the 11,530 respondents stated that it should be possible to pay cashlessly in restaurants. 55 percent of respondents believe that cashless payments should be possible in retail stores.

In Greece, it has been mandatory for retailers and service providers to have a card reader since 2024. A summary shows that the digital payment option is being used. At weekly markets, for example, cashless payments have almost tripled – rising from 3.9 million to 11.2 million compared to the previous year.

Despite increasing demand for digital payment options, the German Federal Association of Consumer Organizations (VZBV) also supports the planned mandatory cash acceptance. "The coalition agreement clearly advocates for mandatory cash acceptance. This is good and right," said Dorothea Mohn, head of the Financial Markets team at the German Consumer Organization Association.

The consumer advice center is yet to clarify whether requiring a digital payment option would prove successful. "It will be crucial to consider the costs for consumers, but also for retailers, of electronic payments," Mohn said. There are no concrete plans yet for how the new federal government intends to implement the project.