“We must now set the course for a sustainable financial centre in Germany”.

The federal election is imminent and the election campaign of the parties is in the final spurt. Many voters are still unsure where to put their cross on Sunday. Meanwhile, we asked industry players, “What do you want from the new federal government in the upcoming legislative session?” What role does cash play in this? We publish the wish list to the coming government daily in this space.

Guest article by Julia Martens, Director Operations & Risk at viafintech

The cash cycle is a complex process that can essentially be described as the issuance and processing of cash. The responsibility for this lies with the Deutsche Bundesbank. The problem with this is that there are many different parties involved, from printing, to logistics via cash-in-transit, to quality control after redemption, all of which increase the cost of using cash and leave a significant CO2 footprint. The trend towards urbanisation is making it increasingly expensive to maintain a comprehensive infrastructure. And it is becoming more inefficient, by the way, this applies equally to commercial banks and central banks.

However, the operation of a nationwide cash infrastructure is still imperative. This is particularly important in order to be able to act and remain liquid in the event of a crisis. A corresponding position paper by the new federal government on this issue would be urgently needed. We are happy to actively participate in this! The business community is still not sufficiently involved in these processes that directly affect it – perhaps the new federal government can act better here.

Cash provision is important in terms of inclusion

Our business model at viafintech is based on the combination of cash and modern technology. We represent the largest bank-independent payment infrastructure in Europe, enabling cash deposits and withdrawals via barcode at the shop checkout. In the background, we work together with a bank that handles the payment transactions. With the Barzahlen/viacash product, we have achieved a disruption of the cash cycle and increased its efficiency. In the future, we will leverage our growing network of currently over 20,000 POS to offer our B2B customers and consumers simplified access to a wide range of financial services through our technical platform.

There is a need for a functional and effective cash supply in order not to leave different groups of the population behind. They have to resort to it for various reasons in order to participate in social and economic life. For example, the rural population, which is older on average partly due to demographic change, is regularly affected. It may well be particularly reliant on cash payment methods. Even younger sections of the population without access to a bank account and the associated use of credit cards or account- or card-based digital payment methods must remain able to participate actively in social life. Ultimately, the socially disadvantaged, who statistically have been shown to manage their own finances largely in cash, must not continue to be cut off from society by a lack of inclusion.

Cash system does not meet society’s requirements

Our product promotes the inclusion of all segments of the population and their participation in social life. The cost of cash transactions for businesses and consumers as well as the environmental footprint will be reduced and the efficiency of the system will be increased. In the course of Europeanization and the offering of the alternative payment system outside Germany, over-regulation, over-bureaucratization, intransparency and a lack of understanding of the so-called “new economy” have become apparent, slowing down the development of the financial sector as a whole.

The exponential growth in the processing of transactions via digital payment methods, among other things as a result of the increasing digitization of commerce, also contributes to this effect, as the system is not experiencing the planned utilization. The current cash system does not fully meet the needs of today’s consumers. The traditional cash payment method does not allow interaction between analog and digital reality.

As a company, we are closing this gap and enabling the use of cash in online retail and access to new financial market players such as neo-banks without branch networks and other fintechs that offer their products exclusively online.

Expectations of the new federal government

As an international fintech in a regulatory environment, we are frequently confronted with financial market regulation issues and the fact that they are handled differently in the member states of the European Union. It is noticeable that the regulatory environment has not become more innovation-friendly in recent years to the extent required by progress through new technologies and market participants with new business models. As a result, Germany as a financial centre is losing its attractiveness, stability, independence and future viability.

“It the call for the new federal government to push the stakeholder approach and be responsive to the needs of citizens.” In this case, the stakeholders are represented by the regulated institutions, the (partly still) unregulated market players and the consumers.

We therefore hope that the new federal government will actually put an end to “business as usual” and set the course for a sustainable financial centre in Germany. This requires a harmonised regulatory framework across Europe, a more risk-based approach to the supervision of financial market participants, a rejuvenation of supervision through the digitalisation of administrative practices, the reduction of bureaucracy, greater involvement of market participants in the resolution of regulatory challenges and greater consideration of consumer interests.

The new government must play an active role

In new German, it is a call for the new federal government to push the “stakeholder approach” and to respond to the needs of citizens: In this case, the stakeholders are represented by the regulated institutions, the (partly still) unregulated market players and the consumers. Generation Y, Z and Alpha are, by the way, important consumers that are often not adequately taken into account by policy makers. This is also because they do not make up the bulk of the electorate. These are the generations that are not yet in the power centers or are simply too young to vote. What is needed is a policy for the generations of the future, rather than the preservation of the status quo. The need is not for a completely unregulated environment, but rather for a stable financial sector in which all parts of society can interact and opportunities for the general prosperity of market participants are promoted.

To this end, the new federal government must play an active role in promoting innovation in the financial sector. It must also actively shape financial market regulation at European level and harmonise administrative practices. Ultimately, it must be dedicated to sustainable financial stability, especially in the aftermath of the pandemic. For us, this includes not only risk-based regulation but also taking into account the systemically relevant factor of cash as a means of payment.

About the author:


Julia Martens is responsible for building up the Operations & Risk Department at Headquarters.
Prior to joining viafintech as Compliance Manager to develop new processes, strengthen organizational structures and ensure regulatory compliance of the product, she gained three years of experience in audit and regulatory consulting in the banking and financial services sector at Deloitte.

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