COVID-19 and the Shift Away From Cash

Despite consumer fears that paper money could transmit the coronavirus, the World Health Organization has stated that this is highly unlikely. That being said, a study published by RTi Research has found that 32% of Americans are still concerned with contracting the virus via cash. UK based consumers harbored the same fears, with the operator of the UK’s biggest network of ATMs claiming that cash usage was halved in Britain in late March when the pandemic started. This dramatic drop can be attributed to the fear of virus transmission, and the fact that many businesses were closed. By the same token, it can be easy to forget that handling plastic credit cards is germy business!

Worldwide cash usage has been on a steady decline even prior to the COVID-19 pandemic, with the major trend being a marked switch towards contactless payments. For instance, many businesses are now aware of the benefits of Text to Pay solutions (or SMS payments). SMS payments allow customers to pay via text, and opt-in to receive a text message containing information (e.g. current balance and due date). Customers opt-in to either receiving pay by text messages or solely bill payment/late payment text reminders.

Pay by Text Payment Providers allow for payment of goods/services via text message. The customer typically receives a text prompting them to initiate payment via a website interface or additional text messaging. Almost any business that implements text to pay or mobile payments will realize operational costs savings, and a major increase in customer satisfaction.

There are many reasons why the adoption of mobile payments should be encouraged worldwide, including:

  • A (potentially unsanitary) payment machine is no longer necessary.
    • Payment apps can be integrated into a business’s existing hardware.
  • Sellers can create a “digital store” that consumers access via mobile phones.
  • People can send/receive money in real time.
  • Small businesses can improve their outreach, selling and accepting payments regardless of their store’s physical location.

Regardless of whether or not COVID-19 can be transmitted through cash, paper money is inherently dirty. Studies show that over 90 percent of U.S. cash contains bacterial colonization, mostly from Staph aureus, Salmonella and E. coli. A worldwide shift to contactless payments is not only a more sanitary method, but also a more streamlined, convenient payment method for consumers. At this moment in time it’s impossible to say whether or not cash will eventually become extinct, but it is clear that there are numerous benefits to be gained from adopting contactless payments.