Cashless payments will be the new normal

April 12 2020

Cold hard cash is no longer king. Instead, people have flocked to digital payments during the Covid-19 pandemic.

The Covid-19 pandemic has forced the vast majority of businessses to close their retail stores. While some restaurants have opted to serve dedicated customers take-out only, many were rejecting cash payments for hygene reasons even before lockdowns were put in place.

Back when we were allowed outside, many of us would carry an emergency bank note in case the card machine was broken or our phone ran out of charge. However, cash is a dirty accessory and hundreds of microbes fester on these pieces of paper.

The coronavirus outbreak caused a surge in contactless payments because more and more businesses scrambled to protect their clients and customers became increasingly wary of how perilous a trip to the grocey store could be. Even touching a card reader was out of the question.

Also, one study from the deVere Group, a financial advisory company, revealed that the coronavirus-related social distancing and isolation has driven up the use of fintech apps by 72%.

People are realizing they don’t need physical cash in their wallet. Not only is it faster and more convenient to tap-and-go, but it’s also more hygenic.

Some countries, like Sweden, are ahead of the curve on this. A nation of early-adopters, the Swedes are proud of their “cashless society”. Other countries have been slower off the mark. Germany, for example, is a notoriously cash-based society.

Square and iZettle are both popular payment solutions for small businesses because they don’t overwhelm the merchant with excessive fees and offer enticing add-ons. You’ve probably seen their iPads at your local coffee shop.

Their popularity already had a healthy trajectory over the last couple of years. Once the dust settles from the Covid-19 pandemic, we’re likely to see a sharper shift towards cashless payment solutions. More and more places will accept cards and some will even reject cash all together.

Square's Annual Gross Payment Volume

Data: Square Annual Report 2019