How a Global Health Crisis has changed our relationship with cash

Share on facebook
Share on google
Share on twitter
Share on linkedin
A decade ago, more than 60 per cent of payments were made using notes and coins. But debit cards overtook cash in 2017. Before the pandemic, bank lobby group UKFinance predicted cash would make up less than 10 per cent of payments by 2028 — now such estimates are being revised.[1]

You may have heard the phrase ‘cashless society’. The increase of card and contactless payments over the last few years have led finance experts to predict a cashless future within the next 10 – 15 years.

But has any of that changed since the Coronavirus pandemic?

What effect has the COVID-19 pandemic had an on cash?

Withdrawals at ATMs fell by two-thirds in the early weeks of the crisis before levelling out at half of normal levels. Customers and consumers have been encouraged to pay by contactless card, this was made easier by increasing the contactless limit to £45 in May.

Although card payments have been on the increase during lockdown, social spending has decreased due to loss of jobs, business closures and lockdown measures. People have been careful and more purposeful with their spending.

Card Payments during COVID 19

Eric Leenders, Managing Director of Personal Finance, UK Finance, said:

"As shops encouraged customers to pay by contactless card, coupled with the contactless limit increase to £45, contactless transactions totalled £4.5 billion in May. However, this was still a 32.4 per cent decrease from 2019 as amongst other factors, bars, pubs and restaurants remained closed and public transport was used for essential travel only.”[2]

Eric Leenders, Managing Director of Personal Finance, UK Finance

Strict hygiene measures and stopping the spread of the virus are a big focus for businesses and customers, and there have been concerns over the safety of handling cash. Studies show that the virus can survive for hours or days on different surfaces, with UK bank notes being one of the main concerns for consumers.

Studies suggest that coronaviruses (including preliminary information on the COVID-19 virus) may persist on surfaces for a few hours or up to several days. This may vary under different conditions (e.g. type of surface, temperature or humidity of the environment).[3]

COVID hygiene measures

What effect has the COVID-19 pandemic had an on cash?

Spending online has increased, and people have been encouraged to not use notes or coins. At the start of the COVID-19 pandemic all hospitality and entertainment industries were put on hold. Many restaurants pivoted towards takeaway services. This allowed a contactless service and also a contactless way to pay. By ordering online this minimises the risk of spreading the virus through the handling of cash. One of our clients Kebabeesh did exactly that, see how we helped them get set up for online orders in our case study here.

The UK’s hospitality industry reopened its doors to the public on the 14th of July, with social distancing and hygiene measures in place. Many places are offering apps to order and pay without going to the bar and are strict with their ‘no cash’ policy.

The lockdown in response to Coronavirus hit areas of the economy that traditionally account for much of cash payments: retail, pubs and restaurants, and travel. Even as businesses in these sectors reopen following the easing of the lockdown, bank executives predict cash will remain scarce.[4]

Finding payment solutions that suits your business needs

If you are running a business, it is more important now than ever to prepare for future changes in the payment industry. To offer your customers or clients simpler, more hygienic ways to use your services or purchase your products is paramount. There are many more benefits to accepting card payments such as ease of bookkeeping, being able to process payments and refunds easily and seamless integration with EPOS.

Can you offer your customers the option to pay by card? Can you take online payments? Are you in need of an ordering app service or takeaway app?

As merchant service experts we have our fingers on the pulse with government guidelines and safety measures that businesses need to have in place. Our technical team and relationship managers can help you find a payment solution that is fit for purpose and is right for your business. Whether you are new to card payments, need help setting up a new EPOS system, taking payments online or setting up payment apps we have got you covered.

Call us on: 01422 323785

Sources