Is Scotland one of the most cashless societies in Europe? Why cash is still king in countries like Germany

I spent the past week in the German state of Bavaria, where everything was fantastic – jaw-dropping mountain scenery, great beer and sausages, Oompah bands playing in the local park in the evenings. It was like stepping back in time, in a good way – apart from one thing.

Here in Scotland, I can’t remember the last time I paid for anything with cash. I actually can’t remember the last time I paid for anything with a physical credit or debit card, usually opting for the virtual versions in my Google Wallet.

Yet, in Bavaria, I was met with odd looks every time I wanted to pay by card.

Across the border in Austria, in the tourist city of Salzburg, things weren’t much different. One restaurant owner in the middle of the old town district was visibly irritated when we asked to pay by card and grudgingly went off to dig out the machine. After two attempts, the payment wasn’t going through.

"The connection doesn’t work, this is why I don’t use it,” he explained, before directing me to the nearest ATM.

On our last night on holiday at a street food festival, my husband and I pooled our remaining euro coins to share a single beer rather than face a £3 fee and 1:1 euro-to-pound conversion at the local ATM. By contrast, at an almost identical event in Edinburgh this week, the entire set-up was cashless.

We may not realise it – it has happened at lightning speed – but the UK has become one of the most cashless societies in the world.

British Retail Consortium figures for 2021 show cash accounted for just 8 per cent of all consumer transactions – the lowest level since records began.

Of course, Covid was the main driver of the cashless revolution. Businesses started operating on a card-only service on reopening after lockdown, in a bid to avoid any unnecessary contact between humans – and it has continued.

There are other countries which are even more cashless than the UK. The pandemic showed us just how technological China is. It quickly created apps which allowed people to move around based on their Covid risk, and pay for everything remotely and without contact.

It is no surprise China is ranked as one of the most cashless societies in the world. Meanwhile, the Financial Services Development Council of Hong Kong predicts cash there will account for no more than 1.6 per cent of point-of-sale transactions by next year.

In Europe, Norway is deemed to be the country closest to a cashless future, according to data from the World Bank. The country has the one of the lowest physical cash rates in the world, with only 3-5 per cent of point-of-sale transactions paid for by cash. Its neighbours, Sweden and Finland, are not far behind.

Whether this is a good thing or not is debatable. Charities working on behalf of older people would argue they are excluded by cashless payments, while there are the obvious potential technological pitfalls. But, like it or not, we are becoming cashless.