Cash, payments, the digital euro – these were the key topics on the agenda at the Bits & Bargeld event in Heidelberg. The Bundesbank’s new event format launched with a panel made up of Bundesbank Executive Board member Burkhard Balz, Finance Minister of the state of Baden-Württemberg Danyal Bayaz, and Martin Dallmeier from dm-drogerie markt, the company’s Managing Director for Finance and Controlling and Deputy Chairman of the Board. Moderator Sissi Hajtmanek was tasked with leading the discussion.

Entering into dialogue

Ms Hajtmanek started the evening off by telling a personal anecdote about a conversation her family had had about payments. She remarked that it had shown that the field of payments has become diverse. The consensus of the discussion was that everyone wanted freedom of choice. Even the younger generation were against abolishing cash. Freedom of choice must be maintained, said Bundesbank Executive Board member Mr Balz, who stated that he always carries a small cash reserve around with him. The world is evolving, especially when it comes to payments. Entering into dialogue with the public is therefore all the more important, Mr Balz noted. I’d certainly call myself a digital user and usually pay by mobile phone, remarked Mr Bayaz. According to surveys, over 60 % of consumers in the euro area consider it important or very important to continue to be able to pay with cash in the future. On average, individuals in Germany carry €100 in their wallets.

Rounding rule is pragmatic

© Walter Vorjohann

The discussion then focused on the recent proposal by the National Cash Forum – where Mr Balz represents the Bundesbank – on rounding up or down to the nearest five euro cent for cash payments in Germany. I consider a rounding rule to be a pragmatic proposal, said Mr Bayaz. From the perspective of the private sector and customers, dealing with 1 and 2 cent coins is impractical, Mr Dallmeier reported, adding that all product prices in dm stores end in 0 or 5 cent. Moderator Ms Hajtmanek asked whether shops would soon take over supplying cash entirely. In response, Mr Balz said he appreciates the current services offered by retailers but, ultimately, it is important for consumers to have a mix, which also includes ATMs. Everything that benefits the public and that results in maintaining access to cash for everyone is a good thing, Mr Balz noted.

Europe must become more independent

Another topic of the evening was cashless payments and, above all, Europe’s independence in this regard. Mr Bayaz welcomed the fact that the need for Europe to have an infrastructure of its own is now being recognised, adding that the penny has literally dropped. A critical infrastructure such as payments is also about resilience and sovereignty. Europe needs to become more independent, Mr Balz also urged. For instance, just under two out of three card payments in Europe are currently settled via non-European providers, which means that many funds are flowing to the United States, in particular, in the form of transaction fees. But, according to Mr Balz, we are heading in the right direction with Wero. Wero is a digital payment method “made in Europe” that European banks launched last summer. It works when sending money to other people and will soon be available for e-commerce and in-store payments. In Germany, Wero is already available to customers of savings banks, cooperative banks and Postbank.

The digital euro: a twin for cash

The end of the discussion centred on the digital euro, which Mr Balz characterised as a twin of cash. Cash should not be abolished, but supplemented with this digital version, he added. The project is currently in the preparation phase. I am an advocate of the digital euro, said Mr Bayaz. However, it also needs to offer a perceptible benefit. The acid test will be whether it is accepted by the general public. The digital euro is intended to enable people to pay online and offline anywhere and at any time throughout the euro area. The idea is for it to be used for in-store, online and also person-to-person payments. In addition, a digital euro would strengthen our European autonomy and resilience during periods of geopolitical tensions, as the Eurosystem itself is working on building and operating the digital euro infrastructure.

© Walter Vorjohann

The final questions from the audience, which focused almost exclusively on the digital euro, showed just how much this topic is on people’s minds. What is the acceptance of the digital euro like in other countries?; Will the digital euro be remunerated? and What do I need to use the digital euro? These and many further questions were posed by participants. Mr Balz noted that representative surveys have not yet been conducted in all euro area countries. The digital euro will not be remunerated – there are no interest rates on cash, either. How the digital euro will be able to be used in the future still remains to be clarified, Mr Balz said. He personally would prefer for it to work either via a Eurosystem app or an app run by commercial banks. After all, people already use their banks’ apps.

© Walter Vorjohann

The “Bits & Bargeld” format is designed as a way for the Bundesbank to engage in a targeted in-person dialogue with the general public and enterprises to understand their diverse needs and also to report on current developments in cash, cashless payments and the digital euro. Nine events in various regions are scheduled for 2025. Participation is free. The next event in the series will take place on 14 May in Chemnitz.