Jessica Ellerm is a thought leader specializing in Small Business and the Gig Economy and is the CEO and Co-Founder of Zuper, a neowealth disruptor in Australia
If there is one financial instrument particularly exposed to the coronavirus, then it would have to be cash payments. For several weeks now, as virus fears ramp up in Australia, I have noticed local businesses banning cash payments overnight, to protect staff from potential infection risks associated with contaminated cash.
Banning cash isn’t fearmongering on the part of retailers – the risk of infection is real. For those still clinging on to their polypropylene bank notes, maybe don’t (or at least wear gloves). The novel coronavirus, COVID-19, has been found to linger around on this surface for up to three days.
Copper coins on the other hand, aren’t so bad. Thanks to the long understood anti-microbial properties of copper, you’ll only need to wait 4 hours before your pocket change is safe to touch again.
While cash has been on the decline for many years, it has refused to die out completely, despite the best marketing efforts of the payments industry. While nearly every sector around the world is hurting right now from a drop off in demand, causing a softening in payments volumes, could acquirers be buffered somewhat by the overnight shift of cash to card? Quite possibly. This buffer could well be sustained, spiking card payments in a short space of time.
This is because even when the pandemic relents, the public’s mood will continue to be one of heightened awareness around cleanliness, making a shift back to cash unlikely. It also means acquirers, which might be hurting somewhat now from the drop off in discretionary spending, have a potentially cashless future to look forward to.
Europe might be one of the first regions to see this spike.
According to The 2018 World Cash Report by G4S, cash represents 78.8% of all transactions in volume and 53.8% in value in Europe. In Italy, one of the hardest hit regions when it comes to the COVID-19 pandemic, a European Central Bank Payment Usage Survey estimated cash transactions made up 86% of all transactions.
There will be financial winners and losers in the post COVID-19 world. My money is on cash not being king much longer.
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