Peter Coffey, an editor, has only used cash once since the start of the Covid 19 pandemic to buy a used car.
When his health crisis began, he installed a smartphone jack with his credit card. Cash was not accepted in some places. I got used to not thinking about money at all, he says.
Mr. Coffey, 28, who works in Tucson, Ariz. said he expects contactless payment technology to continue after the pandemic. It’s amazing how many times I went to the store and realized I didn’t have a credit card. It’s all right. I’m just typing on my phone.
Like many other American consumers, he avoids cash for a number of reasons, including convenience and a desire to avoid banknotes and coins, potential sources of coronavirus transmission. Just as the Covid 19 pandemic changed the way we work, shop and play, it also changed the way many people pay for things.
China is testing the digital yuan to speed up the replacement of cash and increase government control in a society where digital payments via WeChat Pay and Alipay are already the norm. Here’s what the new system in Beijing looks like and how it will work. Photo Credits : Florence Law/Reuters
According to the US Department of Commerce, seasonally adjusted digital retail sales increased 37% in the third quarter compared to the same period last year. Money was not an option for such payments: Spend time online or use an app like this.
An electronic method such as. B. a debit card; or
The central theme of Covid-19 is that things that would otherwise have taken five years now take five months, and this reinforces existing trends. It’s the same with cash, he said.
an economist at Harvard University.
Around the world, fear of contamination has led to an increase in contactless payments – electronic payments such as
Payment offers where you don’t even have to use your cards – in the sense of the credit card companies. The share of personal transactions has increased by at least 10% in more than 80 countries around the world to
by 2020, driven by demand for greater speed and safety, said the CEO
said Thursday in a conference call.
The move to more electronic payments could boost consumer spending, which would boost economic growth after widespread covid 19 vaccinations led to a stronger economic recovery, analysts say. When customers pay with plastic, they tend to spend more.
A January 2020 Deutsche Bank survey found that 43% of Americans think less about the amount they spend when using a card, and 36% think less about the amount when using a digital wallet.
The pandemic has accelerated the decline of cash payments and the shift to e-commerce by about four to five years, according to
Economist at Deutsche Bank.
In the years leading up to the pandemic, Americans gradually reduced their use of cash by using credit and debit cards, mobile wallets, online money transfers and applications. According to the Federal Reserve’s annual payment habits survey, they used cash for 26% of all payments in 2019, up from 40% in 2012.
A survey conducted by the Fed in May found that 28% of respondents said they shun cash, while 70% said they do not.
Consumer payments are a habit, just like you like to drink coffee in the morning.
a payments expert at the Federal Reserve Bank of Atlanta. The introduction of new payment habits – such as. B. Contactless payment – because of the pandemic, consumers and retailers need to make efforts and educate themselves, she said.
Consumers are expected to continue to shift to digital commerce, but economists believe that for a variety of reasons, it is too early to tell if the U.S. consumer will also shift to cashless payments.
First, total household spending in the United States remains below pre-pandemic levels. As with expense reimbursements, the same applies to cash payments.
Moreover, most adjournments were forced. Store closures and other restrictions have led to many online purchases. It’s not certain that people will voluntarily turn to notes and coins to bring back the widely used deposit in stores.
Some privacy-conscious consumers are reluctant to track every click or misstep.
A recent study
found that 24% of U.S. consumers said they would return to their old payment methods once the vaccine became widely available.
It is unlikely that the United States will allow most businesses to refuse cash payments for fear that consumers will not have access to or knowledge of digital payment methods. These include the elderly, undocumented immigrants, people who are not entitled to a credit card or cannot afford a smartphone, and millions of households without bank accounts. New York, Philadelphia, New Jersey and San Francisco have enacted laws requiring most stores and restaurants to accept cash.
Meanwhile, people still like to have physical dollars and cents. Although Americans are using less cash for transactions, they are storing more as securities, according to a Fed study released in May.
Since the start of the pandemic, demand for US currency has exploded worldwide. U.S. cash in the form of banknotes and coins that are negotiable in public hands rose from $1.80 trillion in January 2020 to $2.07 trillion in December. During the same period in 2019, cash in circulation increased by a much smaller amount, from $1.71 trillion to $1.79 trillion.
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Email Harriet Torrey at [email protected]
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