Why is cash so important to Austrians?

Unlike in Scandinavia, the Benelux countries, Ireland, or the UK, German-speaking Europe remains keen on cash. 

For a number of historical reasons, cash is still king in Austria, Germany and much of Switzerland - even after the coronavirus pandemic. 

Austrians love to carry large wads of cash around to make all kinds of payments - just one of many similarities your average Austrian has with gangsters and hip-hop musicians.  

According to the European Central Bank, about 70 percent of transactions performed in Austria in 2022 were done in cash – one of the highest rates in Europe. That’s higher than the eurozone average of 59 percent and higher even than the 62 percent of transactions in Germany that are done in cash – a country typically renowned for its Bargeld – or cash – obsession.

In August 2023, Chancellor Karl Nehammer said he wants to try again to enshrine the right to pay in cash into the Austrian constitution, even after a similar effort in 2019 failed.

“We understand that cash is a very important theme to people,” Nehammer said Thursday. “It’s important to me that cash use is constitutionally guaranteed.”

READ MORE: Cash in Austria to become a constitutional right, Chancellor vows

How widespread is cash usage in Austria? 

A pre-pandemic study showed that Austria are the kings of cash, with 83 percent of Austrians using cash regularly, compared with 75 percent of Germans and 71 percent of Swiss. 

According to national bank data, people in Austria withdraw €47 billion from cash machines every year. Austria also has an estimated 97 ATMs per every 100,000 residents. That too is higher than Germany’s total of 66 cash machines per 100,000 residents.

This is compared with card leaders such as Sweden, where cash is expected to disappear completely by 2030. 

As recently as May 2021, prominent Austrian figures have publicly pushed back against EU efforts to cap cash payments at €10,000

Then Finance Minister Gernot Blümel emphasised the national preference for cash payments - no matter what was being purchased. 

“We will not accept a creeping abolition of cash", Blümel explained, saying that cash was "still the most important and preferred means of payment, especially in Austria."

A peek inside the average Austrian's wallet. Photo: ARMEND NIMANI / AFP

Why do Austrians love cash payment so much? 

There are a number of reasons Austrians still stubbornly prefer paying by cash. 

One is freedom - i.e. the freedom that comes from not having to rely on a bank, funds transfer, a card, a card payment system, or even your smartphone battery staying charged enough to pay. 

According to Alexander Hahn from Austria’s Der Standard newspaper, cash means you can go it alone. 

“In contrast to deposit money in accounts, which is used for electronic payments, citizens do not need service providers such as banks, who keep account registers in the background, for custody or transfers.”

READ MORE: Drug dealer makes off with €100K of Austrian police cash

Another is anonymity. 

German-speaking Europe is skeptical of any system which allows payments to be tracked, i.e. with the risk that this information could fall into the hands of governments, private companies, or even your partner (does your wife really need to know how much you spend on ice cream?) 

According to Hahn, Austrians don’t want people seeing what they spend their cash on. 

“Many citizens generally appreciate this, but especially when it comes to buying unhealthy stimulants such as tobacco or alcohol. The payment platform Paysafe reports that 51 percent of Austrians do not like to give their data when paying.”

A final reason is control. 

Austrians feel that cash payments give them a lot more control over what is being bought, rather than online payments and direct debits. 

The value of cash is driven into Austrians from a young age when they are given pocket money, which experts argue builds an emotional bond with cash and encourages financial responsibility. 

While paying in cash can make you think twice about spending as you realise you are quite literally making your wallet lighter, paying with card “makes spending easier.” 

How did this change in the pandemic? 

The number of domestic card payments increased by 20 percent in 2020 in Austria, rising from 900 million payments to 1.1 billion, according to Payment Services Austria (PSA). 

In the same period, foreign card transactions also increased in Austria in 2020, crossing the 1.2 billion mark for the first time. 

Contactless and mobile payments are also experiencing a dramatic rise in Austria. 

Similar trends have been observed in Germany and Switzerland, leading many to ask whether the shift is set to become permanent. 

Concerns over the cleanliness of cash and a desire to avoid trips to the ATM have been flagged as major reasons for the change. 

The number of cash withdrawals from ATMs in Austria fell significantly, from 137 million to 100 million in 2020. 

Contactless payments increased by 34 percent in 2020 compared to 2019, according to PSA. 

In March 2020, Austria also made it easier to pay with contactless cards by increasing the maximum amount to be paid without entering a pin from €25 to €50. 

Retailers pushed for the change in a bid to reduce the risk of coronavirus transmission and the limit looks to remain in place for the foreseeable future. 

According to the PSA, the card is here to stay, even when and with life returning to normal post-pandemic.

Harald Flatscher, Managing Director of PSA, said “the steady upward trend also shows how much the use of the card has become part of people's everyday lives.”

Security issues around card payment remain a major concern in Austria - and this is unlikely to change significantly over time as a result of the pandemic. 

Writing in Austria’s Der Standard, Muzayen Al-Youssef outlined the concerns of many Austrians when pointing to the traceability of card. 

“Transparency also has consequences. Think, for example, of so-called credit scoring, in which the creditworthiness of a customer is calculated based on the available data,” he said.

“If you drink too much alcohol, in extreme cases you could suddenly no longer finance your own apartment.

“Does a bank really always have to know when - and, by the way, where - its customers bought sex toys, alcohol, or cigarettes?”