A Cashless Society?

Paying without cash is getting more and more popular in Austria – the country where plastic money had been subtly avoided for a long time.

In the recent past, the number of payments via credit and debit cards has increased. According to a study by PayLife, Austria’s market leader in non-cash payment transactions, 41% of all payments in Austrian trade are being transacted cashless. "Regarding sales, we are approaching the relation 50:50," says Ewald Judt, managing director of PayLife Austria.

Forms of payment vary from branch to branch, however one point stays constant: the more money spent, the more likely people are to pay without cash. In furniture sale, for instance, where the average purchase sum accounts for €2400, 66% of transactions are processed by card.

At the moment, about 100,000 companies in Austria accept plastic money, and numbers are growing. An increase of about 10% has been recorded for the first half of 2008 in comparison to last year regarding cashless transactions.

But why is this happening?

Professor Peter Schnedlitz from the Vienna University of Economics and Business Administration (Wirtschaftsuniversität) points out that the changeover from the Schilling to the Euro in 2002 implicated a push in the direction of cashless payment.

At that time, the Austrian National Bank advised customers to pay with plastic money as often as possible: "To avoid unnecessary stress, you should, if possible, change for cashless payments (chip, debit, and credit card) in the first weeks after the Euro-conversion."

However, as high prime costs and deductions of up to 3% cause extra expenses, not all salesmen appear to be delighted with the situation. In addition, they need to have either an analog telephone line or ISDN (Integrated Services Digital Network – a telephone system network) installed to make their cash points work. Small restaurants in particular, usually do not accept plastic money. Friedrich Schenk, owner of the traditional Viennese inn named "Maxingstüberl" located in Vienna’s 13th District Hietzing, is one of the credit card deniers. He brings two main arguments to the table: "First of all, our site is 200 years old. Such a modern facility would just destroy the whole atmosphere here. And secondly: of course, it costs a lot of money." Schenk also states that 90% of his guests are regular guests anyway. "They know that we accept only cash," he says. "The other 10% – mostly foreigners – sometimes ask if they can pay via credit card, but it has never been a real problem."

Even if plastic money becomes more and more important in Austria, there will always be people for whom the precept "cash is king" counts most.