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Cash and mobile banking working together in harmony

Cultural attitudes to cash and family structures present unique opportunities for hard currency and mobile banking to complement each other.

Bringing pocket money into the 21st century

Parents giving their children pocket money to spend is an important but often overlooked tool in helping future generations become financially aware. The reality is we now live in a world where technology is developed and adopted so quickly it can be hard for parents and grandparents to keep up.

Younger generations favor the ease and variety of choice that comes with online shopping, yet they tend to receive cash from as gifts and spending money. How can e-commerce and pocket money link together?

The digitalization of pocket money is something that Barzahlen, our partners from Germany, have been pioneering for some time now: “Most young people receive their pocket money from their parents and grandparents in cash. This is also to train kids to handle a budget. Meanwhile, those young people like to spend their money in their favorite online shop. In order to get the cash to their bank account and thus create a real-time conversion from an offline to online payment, they can do so by using viacash/Barzahlen within their mobile app.” says Pavlina Popova, Director - Banking at Barzahlen.

Mobile banking is defining the link between tech and cash

As the traditional gatekeepers to cash access, banks becoming mobile-oriented will have a profound impact on access to physical money. The reality is that people are used to personalization through their smartphones and the expectation of more convenient experiences is at the core of the modern consumer. At the heart of what we do at bunq is a desire to adapt to these evolving expectations and create a banking experience that people love to use.

Access to cash is a key consideration of this shift in demand. The days of running around seeking out a particular ATM that won’t charge you exorbitant fees appear to be coming to an end. This is clearly something that Ms. Popova is noticing too, “As people get used to doing their daily banking using a banking app and paying with mobile payment methods such as Apple and Google Pay, they no longer need their physical card except for cash withdrawals and deposits. Using the mobile ATM-feature, they can leave the physical card at home and get their cash by using their smartphone.”

Re-thinking the ATM in the same way that banking is being restructured is a natural next step. Barzahlen’s approach is to essentially turn retail businesses into easy to use ATM facilities both for withdrawing and depositing cash. They currently work with over 14,000 retail businesses throughout Germany and Austria and a further 2,000 retail businesses in Switzerland and Italy as Viacash. Our partnership with them allows bunq users to have access to these facilities.

Germany - a unique relationship with cash

If you’ve ever been to Germany on a trip or lived there, you’ll know that cash is still required frequently and in many restaurants, shops and other retailers card payment facilities are uncommon compared to the rest of Europe. It appears that cash is still king in the largest economy in the EU.

In fact, according to research conducted by the German central bank (Deutsche Bundesbank) in 2017, the average German carries around €107 in cash in their wallet compared to €32 on average in France. According to Ms. Popova, particularly around the holiday season, this reaches new heights; “Christmas is the holiday that people spend the most on, a survey done by the German trade association found that 32% of Germans prefer to give cash as a Christmas gift and that cash gifts have the highest value.”

The concept of such an advanced economy putting so much emphasis on cash transactions given the shift elsewhere towards digital payments suggests a level of pragmatism in Germany. This could also link to the way Germans value privacy and data protection as a way to keep transactions as private as possible.

Simply put, Germans love cash, and evidence of it is fairly easy to find. “Just open Google and type in ‘Deutsche lieben’, which means ‘Germans love’ and the second suggestion is ‘Bargeld”, meaning cash” concludes Ms. Popova.