Has COVID-19 Brought An End To Cash?
Since the COVID-19 pandemic started at the beginning of last year, cash has seen a marked decline in use. Due to perceived dangers in spreading the virus, retailers and online stores alike have encouraged customers to pay with a card or with their smartphone.
On top, brick-and-mortar stores have seen a loss in customer base. With lockdowns and social distancing measures all across the world, more and more people chose to do their shopping online.
While that was a gold mine for companies like Postmates or Amazon, it definitely ran some businesses into the ground. We know that it’s been tough for certain businesses, but what has it meant for the future of cash?
Why cash took a hit during the pandemic
Cash bills have a life span of 4 to 15 years, at least in the US. That means bills have a lot of time to accumulate germs, especially considering that our economy is based on cash changing owners as much as possible.
A study on bills flowing around New York City showed that cash is one of the dirtiest things you can hold in your hand, specifically because of how much time they can be around, and how many owners can change bills, even in just a day. They’re full of germs and bacteria.
So of course, when the pandemic started, people started to worry about cash use, especially since studies also show that cash can be a vector for disease spread. That’s why back in Spring the World Health Organization advised against using cash, and encouraged all retailers to choose cashless payment methods whenever possible.
On top, with lockdowns being instituted all across the globe, millions of people spent less time shopping around in retail locations and started buying stuff online. While they can still pay with cash on delivery in a lot of places, it’s clear that more people used contactless options for their purchases.
What the studies show about the use of cash
When you consider the effect COVID had on cash, the opinions and studies are split. On one hand, you have stellar opinion pieces like this one that point out the need we still have for cash. In some parts of the world, poor people can’t even qualify to get a credit card, so cash is their only option.
On the other hand, the WHO also recently declared that there is no clear evidence supporting the fact that cash helps spread the novel coronavirus. Like most things with COVID, it’s hard to get your hands on conclusive studies, because it’s a situation still developing in front of us.
So when it comes to the science and socio-political arguments, cash might still be viable (or even crucial) in our day-to-day activities.
But the snowball is already going down the hill. The fear and caution that seeped into retailers and the general public at the beginning of this outbreak means millions of people have stopped using cash altogether.
And it’s not just because of cash itself. Online spending increased drastically all across the globe. Just this September, online spending in the US grew by 43%. So whether or not cash needs to go away is not as relevant. What’s important is that a lot of more people either dropped cash altogether, or started using it less and less.
But will that mean an end to cash?
Bills are still around
If you’re a careful person that still maintains strict social distancing rules, even if there’s no lockdown in your country, it’s important to look beyond the bubble. Even during lockdowns, a lot of retail stores were still open. A lot of people still used bills.
Now, with very few strict measures still imposed, cash has seen a resurgence in use, especially since a lot of people sat on a lot of bills at the beginning of the pandemic, which they got to spend recently.
Moreover, the lack of alternative has to be underlined here. Many people, especially in poorer areas of the world, don’t have access to digital payment methods. We’re not just talking about 3rd world countries, the US and western Europe have their fair share of people only using cash.
So it’s not like bills have disappeared, even if your life has been managing without them so far.
But that doesn’t mean cash use will be the same.
What can we expect for cash after COVID-19?
Considering the caution people walked into this situation with, it’s safe to say that using cash bills is not the default for a lot of people, especially if we’re talking about middle to high class individuals.
Cash might as well be gone for them. Quick payment methods like using a card, or even a phone app, are not only safer, but they’re more convenient as well.
However, like we’ve said before, a considerable segment of the population relies on cash payments. On top, you need to consider that we’re not out of the woods yet. A second wave of the pandemic might hit us hard before we have a vaccine ready for distribution, so there’s little in the way of predictions that aren’t pure speculations.
An uncharted future is scary, but it’s still a reality we have to deal with. If there’s one takeaway you need to remember from this article, it’s that digital payments were getting more important each day before the pandemic, and that the pandemic gave them a big boost.
So if you’re a merchant, try to accommodate a wide palette of digital payment methods. Beyond that, no one can yet say with certainty when or if cash will ever disappear.
So has COVID-19 brought an end to cash?
For some people, definitely. For others, not in the slightest. What do you think about cash use in a post-pandemic society?