foundation, or the ground floor, consists of cash payments, for centuries an accepted, simple - to - use and quite resilient means of payment. and what is important here is that any account holdings – as a basis for payments on higher levels – can be withdrawn and transferred into cash holdings. but cash payments are by no means digital payments. digital payments start on level one, where you can find the classic payment instruments – credit transfers and direct debits – which obviously work on the basis of electronic data processing but are not necessarily triggered by an action carried out online. for a very long time, a paper - based instruction to transfer money directly from one account to another had to be transferred into a digital dataset to be executed electronically. the same holds true for direct debits, which have to be initiated by the payee. nowadays, we can say that the process is carried out completely online in most cases since it is initiated either by the payer via online banking or via the online transfer of a digital mandate for a direct debit from the payer to the payee. 1 / 4 bis central bankers'speeches payment service providers reported 24 billion transactions to the bundesbank for 2019. threequarters of these transactions were credit transfers and direct debits, very often for recurrent payments. only 25 % of all cashless transactions were card payments in germany. this sets the german market apart from the euro area, in which 48 % of all cashless payment transactions were card payments. but credit transfers and direct debits have also built a bridge into the digital world. they are very often used in their pure form in e - commerce. according to a publication by the ehi retail institute, payment on receipt of invoice was the payment method used for 30 % of all ecommerce purchases in germany last year. the direct debit in its classic form was used for nearly 18 % of all online shopping transactions. that brings me to level two of payment digitalisation. on this level, i mainly see card payments. these may be part of a direct interaction between payer and payee at the physical point of sale. they are initiated via a digital trigger. this holds true for all kinds of debit cards ( including the german girocard ) as well as for credit cards. however, in online shopping, only cards from international schemes can be used. we now already find ourselves on level two and a half : contactless card payments

burkhard balz : digital payments & european sovereignty keynote by mr burkhard balz, member of the executive board of the deutsche bundesbank, at the digital finance conference, bitkom, virtual event, 10 june 2021. * * * 1 introduction ladies and gentlemen, thank you very much for giving me the opportunity to open the second day of the bitkom digital finance conference. it is a pleasure for me to contribute to this event. bitkom is an important voice in the public debate about payments and digital money. as a key representative of the digital economy, it is instrumental in helping to make digitalisation more popular within german society and in facilitating dialogue with politicians and regulators to provide the right incentives for future developments. let me kick off this day of hopefully fruitful discussions with a short talk on digital payments and what these have to do with european sovereignty. while payments might not appear to be the most compelling aspect of this debate, they are an integral part of our everyday life and, in a wider sense, the “ lifeblood ” of the economy. my starting point in this context is the recent acceleration in the pace of digitalisation. digitalisation has become such an all - encompassing buzzword that it seems necessary to define what i actually mean by it. simply put, i see digitalisation as moving from the offline world to the online one. this shift has been turbocharged by the coronavirus pandemic. i am fully convinced that there is no going back on the road towards digitalisation. it is quite clear to see that digital payments are of great strategic importance not only for the further development of efficient financial markets but also for a prosperous economy as a whole. at the same time, digitalisation is not a domestic but rather a global phenomenon, with a key role for a few international players. in my view, the political conclusion that needs to be drawn from these two premises is as follows : we have to speed up our innovative efforts and we need to do so in a way that also safeguards our european sovereignty in this sensitive market. 2 different levels of digitalisation in payments how can we distinguish between digital and non - digital payments? this is certainly a question that is not so easy to answer because the majority of payments today are already conducted electronically. in order to illustrate the topic, i would like to introduce you to the “ house of payments ”, which has different levels and is under never - ending construction. let me explain. the