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| Photo Credit: John McArthur on Unsplash |
In my post about airport transportation I mentioned the Czech Republic's currency, the Czech Koruna, CZK.
To be honest, when we decided to visit Prague, I was under the assumption that I was going to need Euros for our trip. After all the Czech Republic has been a member of the European Union since 2004 and joined the Schengen Area (which is the world’s largest border-free zone) in 2007. So what's the deal with the currency?
The Czech Republic hasn’t adopted the Euro mainly because most people prefer to keep their own currency, the Koruna, and the control that comes with it. Having their own central bank means they can set interest rates and respond to economic changes independently, which many see as a safer option. On top of that, the country hasn’t yet met all the economic criteria required to join the eurozone, so there’s little political urgency to push for it.
In the travel videos I had watched in preparation for our trip, everyone said you don't even need local cash, you can pay with credit card or your phone everywhere. They even warned not to use the money exchange offices that still exist in the touristy areas. They advertise to be "commission free" but use an unfavorable exchange rate. Same goes for ATMs.
Also, apparently there are people on the street that will want to offer you cash. You're not supposed to engage with them, as they are known to not even give you the Czech currency but some interesting looking banknotes that will under closer inspection turn out to be from an entirely different country.
I was surprised to experience a "get 10 to 25% off if you pay cash" in some restaurants, and I was wondering why. This is the best I could come up with:
Avoiding taxes (the not-so-official reason)
Cash payments are easier to underreport or not record at all, which reduces VAT and income tax. I wouldn’t assume every place is doing this, but unusually large “cash discounts” are a classic red flag.
Skipping fees and intermediaries
Card payments come with fees (typically a few percent) and delays before the money arrives. Cash is immediate and fee-free. That said, in my opinion, this alone doesn’t justify a 20% discount.
Liquidity and simplicity
Cash gives instant liquidity and avoids dealing with payment providers, chargebacks, or admin. For small or independent businesses, that still matters, just not enough to explain big discounts on its own.
Cultural habits and legacy practices
In parts of Central and Eastern Europe, cash has historically been more common, and some habits linger, even though card payments are now widely accepted in cities like Prague.
In my neighbor country Germany, there is a popular saying, "Nur Bares ist Wahres," which literally translates to "only cash is real"; the German equivalent of "cash is king."
In my experience, this still holds true for small businesses there, even after the pandemic. Just recently, I couldn't treat myself to an ice cream because I hadn't brought any Euro cash. I forgave Germany, though, as the charming town of Meersburg completely made up for it!
Personally, I find card payments much more convenient, secure, and hygienic.
What are your thoughts on the cash vs card debate?
I have mixed opinions. Cash is good for shopping at little shops and outdoors fairs, etc. But cards are so convenient and protected if misused or stolen. Cash is not. We always get some cash out and the majority we pay by cards. If it helps the local people to earn a little more, then I am all for paying cash to them.
ReplyDeleteI think we still have some of the currency from when we were there a couple of years ago.
ReplyDeleteI very rarely use cash anymore. Everything is put on the credit card - even a cup of coffee.
That is so interesting. When I visited Prague with my husband in 2007 and 2009, we had cash, mostly. But I have to admit that nowadays, even in my own country, I don't even carry my purse with cards anymore. I tap on with my phone and that's it. (Dangerous if you don't keep an eye on your bank account, as it's way too easy to spend money 😅) Whenever I travel, I take some cash (which I buy before I leave my country), and take a card we have that doesn't charge fees when we use it abroad. It's so good to have options! ☺️
ReplyDeleteCash is real .Cash is kimg.Cash is yours.Rest the Government ,banks etc control in many ways.In an ideal world I would expecg people pay the taxes even with cash payment.But the cost for small biz and setting up digital payment us now way easier.In India we have a veey robust phone payment optiin with Phone Pe,UPI,Google pay all cashless and cardless.The convenience is great.Problem is the scams happening with horrifying speed and the risk of over spending.
ReplyDeleteI am very concerned about the big brother implications of going cashless, so I am against it. But not having to use cash when you travel would be convenient. I like the idea of the restaurant discounts, though, to be honest.
ReplyDeleteI carry cash just in case I have to go into a convenience store because I've had my credit card hacked by card reader skimmers on the card readers. So I don't trust the convenience stores now and pay cash because of the skimmer machines that people use to hack your cards.
ReplyDeleteTamara, you raise a very timely issue. I favor small businesses, since I own one, and small businesses are the undercurrent of the economy here. I like to spend cash in those businesses if the purchase is not something I will be deducting as a business expense. I don't favor a cashless economy b/c how could you have an emergency fund in your little safe? Thanks for the background on te Czech Republic and thanks for raising this issue.
ReplyDeleteI think I like to travel with both, cash and card. I remember times of doing travellers cheques. I'm old.
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