That said, the demand for cash in Germany remains as high as ever, according to the Bundesbank, the country's central bank.
"I suspect that people hoarded cash during the corona crisis out of uncertainty and because of a lack of opportunity to spend money," Bundesbank board member Johannes Beermann told news agency dpa. "Uncertainty in the pandemic is high."
The Bundesbank suspects that hoarding is behind an estimated 40 per cent of cash withdrawals in Germany.
Cash is believed by many to be a safe way to park one's money during a crisis. When the pandemic hit Europe in full force in March 2020, demand for banknotes was particularly high. In 2020, the total the value of banknotes issued by the Bundesbank rose by 9.5 per cent. The last time the amount of cash in circulation rose that much was in 2014 - which saw a 10.2 per cent increase.
Corona has changed Germans' payment behaviour
"When and how the development will normalise in the wake of falling corona numbers and the associated easing of restrictions cannot yet be estimated," Beermann said. "We are currently noticing in our branches that cash deposits and withdrawals are increasing again."
At the end of May 2021, banknotes issued by the Bundesbank with a value of €839bn were in circulation, 52 billion or 6.6 per cent more than a year earlier.
Thanks to corona, though, consumer payment did change in 2020. According to a recent study by EHI, a Cologne-based retail research institute, every third purchase in stores is now paid for by card. "The crisis has accelerated the decline of cash sales in stationary retail by at least three years. Cards - along with fast growing e-commerce - are the clear winners of the crisis," explained study author Horst Rüter.
Cash still king
According to the central bank, avoiding negative interest rates may also play an increasing role. Commercial banks in the euro area have to pay 0.5 per cent penalty interest when they park money with the European Central Bank (ECB). Many financial institutions pass on the costs to business customers, but increasingly also to private account holders.
With a share of 60 per cent, cash is still by far the most popular means of payment in Germany. The Bundesbank predicts that will remain the case for the forseeable future.