For a second day, money transport drivers across Germany have continued their strike in a temporary work stoppage urged on by Germany's second largest trade union, Ver.di.

Starting Tuesday the union called on the country's 12,500 armed drivers and other personnel who keep the nation's cash flowing — literally as they transport the cash between banks and retail outlets — to halt services after five failed rounds of negotiations in Berlin. Notably, and unlike other European states such as Sweden, in Germany cash remains the preferred method of purchase, with a large number of smaller stores and restaurants often not accepting cards. This makes Germany lucrative for cash handling and security companies that guard and transport physical money, but also particularly vulnerable to a large scale cash-handler strike.

The cash and valuable goods services sector employees are demanding an increase of 1.50 euros (1.72 U.S. dollars) in hourly wages — or a monthly boost by 250 euros — and the equalization of salaries between the western and eastern parts of Germany, which according to a Ver.di statement stands at between 1,800 and 2,400 euros a month in the eastern part of the country compared to the much higher 2,200 to 2,900 euros in the western part. Still decades after reunification in 1990, states in former East German territory have lagged behind the Western half especially in terms of hourly wages.

"This was a strong signal to employers to finally submit a negotiable offer," Ver.di's lead negotiator Arno Peukes commented. And he threatened to continue and expand the strikes: “Our message to the employers is clear. If no negotiable offer is presented, the strikes will be expanded,” he told Reuters.

However, the federal association of German money and valuables services (BDGW) has so far remained unmoved, with a spokesman asserting the strike could merely have marginal impact on consumers, if at all: "contrary to the union's claims, cash will not become scarce," a BDGW statement said. BDGW managing director Harald Olschok called on the union to return to negotiations with realistic ideas, saying, "we will not comply with these wishful expectations."

Data via Bundesbank, Chart: Future of Finance

The BDGW employers’ association further said the strike would fail to produce a cash squeeze for retailers and bank machines - often empty just after the New Year's holiday - as bank machines were already filled Tuesday, according to statements in Reuters. The associated noted that though it could be "frustrating" and possibly expensive for companies, services would continue across the country.

According to a Bundesbank study about 74% of transactions involved physical money in 2017 - the last time statistics were available - down from about 79% three years prior, which suggests more payment by card options are being made available at retailers and restaurants. But still paper and coin are used to settle 96% of smaller payment amounts of up to €5, according to the study, with the average per person number of annual cash withdrawals remaining stable over the past decade.

Number of yearly cash withdrawals per person in Germany via Bundesbank/Quartz:

If the trend of debit cards over cash continues, the union could slowly begin to lose its leverage. The near term results for the consumer in this latest strike could reveal a lot in terms of the continued centrality of cash in Germany.

One data point that doesn't bode well for Ver.di is that the proportion of cash in overall turnover in the country fell below 50% in 2017 for the first time. Whether the trend continued for 2018 could be tested during this opening month of the new year.