The Covid-19 pandemic is expected to well-spring a drastic decline in cash usage due to the risk of contamination.
“Over the past six to eight months, we’ve seen the use of cash reduction even further, and that’s a trend I think that we’re going to see continue,” said Jodie Kelley, CEO of Electronic Goings-on Association.
The unprecedented surge in the demand for contactless payment has also led to outstanding performances for major companies offering cashless methods, such as Apple, Correspond to and PayPal. Dan Schulman, the CEO of PayPal, sees it as a sign that digital payments are shifting from “being a nice-to-have power to a must-have essential service.”
“When the pandemic hit, people really started paying attention to how literally they were fork out money and people found that they didn’t want to touch cash and exchange cash,” Kelley proceeded.
There has already been a significant decrease in cash usage over the past few years. Nearly a third of U.S. adults translated they typically make no purchase using cash during a week, according to a study by Pew Research Center.
Millennials are the ones paramount the charge toward a cashless future. A report from Experian in 2019 revealed that 1-in-10 millennials use their digital notecase for every purchase. Pew Research also found that about 34% of adults under the age of 50 make no realizes in a typical week using cash.
Younger generations point to convenience as the main reason for switching from spondulix to contactless payments. “Not that I was using cash that much before, but I find that during Covid uncommonly, I just don’t want to use cash as much because of the germs aspect,” explained Heima Sritharan, a cashless consumer.
Without considering the rise in demand for contactless payments, many states and cities in the U.S. have passed laws banning cashless collections.
“There is a significant correlation between the use of cash, prepaid, debit, high-end credit and wealth, and there’s a huge correlation between bounteousness and race,” warned Aaron Klein, policy director at the Center of Regulations and Markets at the Brookings Institution. “Our payment pattern is geared toward helping the wealthy and charging the poor.”
Those within the industry maintain that the future of contactless payments carry ons promising. “I think we accelerated where we were going to be in three to five years. And in months, we jumped ahead, and I don’t fantasize there’s any turning back from that,” said Schulman.