Germans could be left without cash if a threat of a general strike of 12,000 employees who transport money to ATMs is fulfilled. Although they could quickly pay with their bank and credit cards, the lack of cash would anger the Germans, since they, just like Croatians, like to pay with cash. On the other hand, some countries in northern Europe are even thinking about the abandonment of cash money altogether. Advocates say this approach would eradicate the grey economy and tax evasion, while the opponents warn about a loss of privacy, reports Večernji List on January 7, 2019.
The popularity of cash, despite the simplicity and security of bank card payments, is even growing in some countries. Germans, like Croats, make as much as 80 per cent of transactions with cash. According to the data of the Croatian National Bank, of the 179 million recorded receipts in 2017, as much as 87 per cent was paid in cash. However, the value of card transactions has grown to 37 per cent of the total turnover.
It should be noted that the largest card turnover is recorded during the summer and that 12 per cent of the amount of all card transactions is made with foreign cards, so it is likely that tourists mostly use them. If we take this into account, we can conclude that Croats pay with cards for just a quarter of their purchases. And they use much more their bank debit cards than credit cards.
Nevertheless, the popularity of bank cards is growing year after year, as well as the value of card transactions. Every consumer has 2.5 cards on average, and 79 per cent of citizens have at least one card. This shows that the problem is not the access to bank cards, but the will of the citizens to use them.
Local craftsmen and caterers mostly insist on cash payments, and the unwritten rule is that discounts are more substantial if you pay with banknotes. The reason is the high payment fees that card companies contract with the sellers of services and goods. Since these fees are often, especially in the case of a new company that has no financial history, higher than five per cent, entrepreneurs must increase their prices for that amount. As a rule, fees range from two to five per cent, and this cost is transferred to the consumers. That is why customers usually pay more with bank cards, especially in the case of larger purchases, which typically bring five per cent extra discount if you are ready to pay with cash.
On the other hand, Americans pay for almost half of all transactions with bank cards. Sweden and Norway are moving towards full cash elimination. In Sweden, for example, in five years the share of cash transactions fell from 50 per cent to just 20 per cent. Swedes trust banks and institutions and research has shown that they are not worried by either the ‘Big Brother’ issue or internet fraud. They recently abolished the largest banknotes, claiming that only criminals use them, and they consider the abandonment of cash an excellent way to fight the grey economy.
More news on the Croatian economy can be found in our Business section.
Translated from Večernji List (reported by Marina Šunjerga).
