According to Bundesbank data, people living in rural areas continue to have good access to cash, as shown by a study in the latest Bundesbank’s Monthly Report. According to this study, people living in rural areas need 10.7 minutes to reach their nearest source of cash via conventional means of transport, which is somewhat longer than people living in urban areas, who need 9.3 minutes. Overall, however, almost 90% of respondents in rural areas still consider the effort needed to access cash to be low or very low. The percentage of those who report a greater effort being needed is around four percentage points higher in rural areas than in urban areas, according to the report. Even though some bank branches have been closed down in recent years, the number of automated teller machines (ATMs) in Germany has remained virtually constant at 58,000.

The study is based on the Bundesbank’s survey data on payment and withdrawal behaviour from 2017. Owing to the COVID-19 pandemic and the associated restrictions, the subsequent survey planned for spring 2020 has not yet been carried out. However, as previous studies have indicated relatively slow changes in Germany’s payment habits, Bundesbank experts assume that the findings on differences between urban and rural areas can be applied to a longer period of time after the data were collected.

Rural population withdraws more cash

In addition to looking at the effort needed to withdraw cash, the experts also compared withdrawal behaviour in urban and rural areas. According to the report, ATMs are by far the most popular place to access cash, with survey respondents withdrawing cash from ATMs 41 times a year. According to the Bundesbank, there was no (statistically) significant difference between urban and rural populations on this matter.

There were differences in the amounts withdrawn, however. While respondents in towns and cities withdrew an average of €187 from ATMs, rural residents took out an average of €206. Nevertheless, the experts do not assume that structural differences between urban and rural areas are the reason behind this. Rather, structural differences in the population – such as differing levels of income or the pattern of expenditure – are likely to be key factors. This is confirmed by a further analysis that factored out the structural differences between urban and rural populations. This showed only minor differences in the amounts withdrawn.

Only a few respondents took advantage of the option of withdrawing cash at the counter or at a point of sale – irrespective of where they live. That said, people living in rural areas withdrew significantly higher amounts at the point of sale – €114 on average, which is €26 more than people who live in towns and cities. According to the Monthly Report, it is possible that a larger percentage of users in rural areas consider the point of sale to be an equivalent alternative to an ATM and withdraw similar amounts there.

Increased demand for cash at the start of the coronavirus crisis

A notable change in cash withdrawals was seen from mid-March 2020 as the coronavirus spread. The net issuance of euro banknotes, i.e. the difference between withdrawals and deposits, rose to €10.5 billion in the week beginning 16 March 2020 and stood at €6.4 billion in the following week. According to the experts, this significant year-on-year increase was comparable in magnitude to the increase observed during the financial crisis in September and October 2008. The experts cite precautionary demand for money on the part of consumers, credit institutions and other enterprises as a possible reason for this. By the end of March 2020, however, net issuance had returned to normal and even dipped below the previous year’s figures at times in the weeks that followed.