Erfurt, 2 June 2020 - We are currently experiencing a radical change - away from cash and towards contactless payment. In almost every supermarket, people are currently being asked to do so. But many customers still prefer coins and notes instead of credit cards: three quarters of payments in German retail are made using cash (source: retail research institute EHI Retail). Prof. Dr. Julia Pitters, business psychologist at the IUBH International University of Applied Sciences, explores why this is especially true in times of Corona. "In crisis situations, people reflexively trust in the tried and tested - that's why they also prefer haptic payment over digital means of payment."


Cash activates reward centre in the brain

The difference between card versus cash payment lies in the brain's reaction, says Pitters: "Cash is like drugs or food. There are areas developed in the brain that respond to the cash stimulus. When we see money, a reward centre is activated. It's like an addiction. People become more focused and purposeful." At the same time, he says, this has the effect of making people less spendthrift and more generous: "Tangible money has a possessiveness effect. We know that from studies and focus groups. With cash, I know what I have, it is haptically tangible. With a credit card, similar to foreign currency on holiday by the way, paying is more abstract - it doesn't hurt as much to spend."


In times of crisis: cash rather than credit card

The way people handle money, especially in crises, also has historical reasons, says Pitters: "There is certainly a certain pride in one's own cash. Because the D-Mark worked well for a long time. Especially in economically uncertain times, people in Germany or Austria stick to what has proven itself; they tend to act traditionally." This is also proven by data from the Bundesbank on the financial crisis of 2008, when withdrawals of banknotes increased extraordinarily. "In countries like Sweden, you wonder about that kind of thing. Here, people like to be progressive."

Pitters, however, also sees clear advantages to electronic payment: "One plus point is security. I don't have to store my money at home. And if my card gets stolen, I can block it. Today, however, we are more and more concerned about our data. That's where the concept of security is changing, and some are going back to cash to avoid giving away too much of themselves."




About Prof. Dr. Julia Pitters:

Julia Pitters is a professor at the IUBH, heads the Business Psychology course and is a partner at the Pitters℗ TRENDEXPERT consultancy. She previously worked as a consultant for the Silicon Valley fintech AltX. She studied psychology and sociology at the universities of Würzburg and Hamburg and earned her doctorate in tax psychology at the University of Vienna. As an assistant professor, she represented the subject of business psychology at Webster University for six years and has published in numerous international journals. She is a sworn and court-certified expert.

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