Banking is a state in this state
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I moved from the UK to Germany a couple of years ago. As hoped (and expected), the vast majority of things over here are better. People seem much more chill and friendly for the most part, and the quality of life is noticably better than in the city in which I used to live. I can safely say I don't really miss the UK much at all.
However, there is one thing that Germany just doens't seem to be able to get right: finance tools.
Given that Frankfurt is the financial capital of Europe, it might sound a bit strange to say this. But Germany's day-to-day banking and in-person transactions are a complete shambles.
You want to send money today? Das ist leider nicht möglich...
In the UK, we have a system called BACS. It's super easy sent large amounts of money instantly between any two banks. This has basically replaced any inter-family or friend-to-friend transaction for me as it's quicker and easier even than PayPal. This system is excellent and is a feature of any bank in the UK.
Here in Germany, money can be transmitted instantly, but only if both accounts are with the same bank. If not, you have to send a standard SEPA transaction, which can take up to 2 days. Got to urgently clear a bill? That will take time.
I don't understand how this issue is not solved yet. The fact that it can take me multiple days to trade 20 euros from one account to the other is frankly unacceptable in this day and age. Also, at Deutsche Bank (at least) some transactions can't happen after hours or on holidays since no agent can action them. Why the hell are people handling what should be an automated system?
I might be more accepting of this if German banks were just exercising caution in order to better protect their clients, but from what I've heard these banks are just terrible at helping you if you've had an issue. Bank employees just shrug and tell you to take it up with the ombudsman.
In the UK (and indeed, most of Europe), we pay by card. It's quick, it's simple, it's secure. It means you have to carry a lot less crap with you. It's just a good and convenient system.
So why in the hell are German companies so terrified of "Kreditkarten"? Even here in Berlin, most places insist on cash and look at you with disgust and horror if you present a Mastercard. I end up having to carry large amounts of cash with me just to get by a week in the city, especially if I'm eating out for whatever reason.
And don't even get me started on the nomenclature issue. In the UK, we basically have 2 types of card:
- Debit cards (instant transfer from bank to payment provider)
- Credit cards (deferred transfer from bank to payment provider)
Aha, but in Germany we have another: EC-Karte. This is essentially just a Maestro card that connects two IBAN accounts and performs a SEPA transaction between them (or, at least, this is what I assume). Most bank accounts don't offer an EC-Karte, at least not for free. But often, this is the only card businesses accept.
Let me recount to you a story from when I first arrived in Germany. It was my first Christmas here and my parents had posted a parcel containing some gifts. Since Brexit introduced a lot of meaningless red tape, I needed to go to the post office to collect the parcel. My father assured me they'd paid all associated costs, so I assumed I just needed to sign something (Germans love a signature).
So to the post office I went with my delivery slip. I approached the desk and informed them I was here to pick up a package. The clerk dutifully scurried to the back room where they held the parcels and came back with mine. She then informed me that there was 17 euro fee. I was a bit taken aback, but hey. Just another Brexit benefit™.
I ask the clerk if I can pay by card and she nods the affirmative, handing me a card machine. I pull out my Mastercard debit card and tap it. Nothing happens, so I insert it and enter my PIN. The machine beeps angrily at me.
Sorry, I don't know why it's not working.
The clerk looks at me and glances down at my card.
No, only debit.
I'm a bit confused. The word "Debit" is emblazened across the back of the card. I show it to her.
No. That is a credit card.
I'm very confused at this point. Fortunately, I have just about enough cash on me to pay the fee. I go home a bit annoyed.
My German friend later explained to me that any time someone asks for a "Debitkarte", they actually mean an "EC-Karte", not a debit card. In Germany, debit cards are considered to be the same thing as credit cards except instant.
In the meantime, then, I've opened an account that allowed me to get an EC-Karte, just in case I need it. But I cannot for the life of me understand what this bonkers reliance on ancient Maestro technology and cash is all about. When people come from other countries to visit they're always shocked by this.
But cash is fine, right?
In theory, yes. Paying by cash is annoying, but it's acceptable. That is, of course, if getting cash is easy. Surprisingly here in Berlin, it's not.
Some parts of the city have no Geldautomaten around, or if they do they're only the proprietary Euronet ones. These machines charge you an ungodly fee to withdraw cash, which makes them fairly useless. Worse still, you can't always withdraw money for free from another bank's ATMs. What sense does this make? In the UK, you can always withdraw money for free from an ATM, provided it belongs to a bank. Most ATMs have simply dropped the requirement for fees in general. Since so few of us use cash at all, it probably isn't a great money-maker.
But Germany offers the worst of all worlds:
- A strong reliance on cash for day-to-day transactions
- A dearth of available Geldautomaten and
- Poor legislation around banking interoperability
A light on the horizon
Fortunately, over the past couple of years we have started to see more card terminals popping up in shops and restaurants. We still frequently need cash, but it's noticably better than before. I think the younger generation is more insistent on Apple/Google Pay which necessitates contactless card readers. Maybe one day I'll be able to walk into any Späti and realistically expect to be able to purchase a drink with a card of any type.
The banking sector moves slowly, but given Germany's recent push towards a digital revolution we may actually start to see some quality requirements for banking software and UX. Heck, maybe Scholz's government will actually start putting in legislation to protect consumers from predatory banking practices regarding Geldautomat usage. One can only hope.