Will cash payments recover from COVID-19?

Started by Alan71, July 10, 2020, 10:33:28 AM

Previous topic - Next topic

0 Members and 1 Guest are viewing this topic.

Alan71

Prior to the pandemic, cash use was already on a steep downward slide.  However, I tended to stick to cash for anything other than online payments or high-priced items.  Anything under £50 would always be in cash.  I'd accumulate change of course, but I'd find ways of using it up quickly so I'd never have the same coins in my wallet for more than a few days.  However, when drawing cash out, I would become increasingly resentful of £20 notes, preferring fives and tens.

I last used cash immediately prior to full UK lockdown (which I think was 23 March) and even then it was just to use up remaining change I had.  Since then, everything has been cashless.  Even better, if under £45, Contactless.  My aversion to card payments has lifted - particularly as my mobile banking app immediately shows my bank balance after pending payments.  The payments themselves are mostly only pending for a day before being fully debited, even at weekends.

Lockdown is lifting but the virus is still with us, and the idea of using cash again seems a long way off.  It would be quite selfish to even try using cash.  Not using it protects both myself and the person on the till.  I won't even accept receipts and wish that none of them printed them without asking first (some still automatically print).

Modern coin collectors have also helped shift my attitude.  Back in the day (11 years ago and more), it would be normal to hope to get a commemorative or new-date standard coin in any cash transaction.  The £1 coin changed its reverse design every year.  Nowadays, coin collecting is so wide-spread with casual collectors thinking they can get a coin worth hundreds in years to come, that the chances of getting something unusual are far more limited.  The Royal Mint issue too many commemoratives and if they reach circulation at all, are in such small numbers that they're quickly snapped up by the Facebook generation.

Going cashless means I can take myself out of the race.  I still collect coins and don't mind too much if that means I have to buy them (I always did buy them, but would collect from change as well).

Even if this pandemic passes (and realistically that's only if/when a vaccine is found), I can't imagine going back to using cash again.  Cash will probably always have to be there for some, but I wonder if this pandemic is speeding up its demise?  I'm helping with that, and for the first time, I don't really care!

Figleaf

Perhaps you are looking at this too much from your own experience. I don't doubt that people tended to use plastic more, but at the same time, there was a tendency to shop less. I think people tend to offer cash more when the amount to be paid is small and prefer cards when the amount is larger. When you shop less, the amounts to be paid will be larger. In addition, some shops dictated cards only. As the feeling of urgency disappears, both shops and customers will return to former behaviour.

As evidence for the above, have another look at the table here. Over all sectors, the number of card transactions went down 11%. Now look at the "Food, drink, health" sector immediately below. That sector is to a large degree selling products to fulfil basic needs. People will go out and get them in any circumstances. The differences are mostly caused by hoarding and changing circumstances. The hoarding effect is clear from the increase in turnover of 15%. If people would not have changed their shopping pattern, the number of transactions would have increased by 15% also. Instead, plastic was used slightly less often (-2%). See the first paragraph for my explanation.

Peter
An unidentified coin is a piece of metal. An identified coin is a piece of history.

chrisild

Greetings from a cash oriented country. ;) Yes, even in Germany people started using contactless (and thus cashless) payments more often due to the Coronavirus changes. But of course cash is still widely in use. And if we talk about the SARS-CoV-2 virus, we should also keep in mind how it gets transmitted. Noroviruses for example stay "active" on many surfaces for a fairly long time; with the Coronavirus I am much more worried about other ways of catching it. So yes, I still spend cash and get cash back.

Then again, I like the idea that even our local bakery now accepts cashless (and contactless) payments without any "threshold". No more of this stupid "cards only if the amount due is more than x euro". And yes, I do use that cashless/contactless not only if I have just a €50 bill in my wallet and need to pay €3 or so. 8)

The other day the "Welt" newspaper/site published a survey about what means of payment people in DE used on their last trip, and what they plan to use on the next trip. See this image. The options – not mutually exclusive of course – were: cash, girocard (debit), credit card, contactless.

The article (German) mentions regional and other differences too. In the East German states, the "girocard" option has 74.9% support now while cash is at 73.9% only. Also, women seem to be a little less "cash loving" these days.

What has definitely changed here: There were still a few places (mostly smaller ones such as some bakeries or flower stores maybe) that used to say "sorry, cash only" – and those have run into problems. Before Corona so to say, a customer might say, OK, no card payment then. These days, that customer is more likely to go elsewhere.

Christian


<k>

#3
In the Lidl supermarket where I sometimes shop, I prefer to use the self-service booths. There are eight self-service booths. Of these, one or maybe two took card only, and their location seemed to vary - one week one booth would do card only, another week it would be a different booth.

When I was there two weeks ago, I saw that there were now four card-only booths to the left and four cash booths to the right - I think the cash booths also took card. I made a note to carry my debit card, even though I prefer paying in cash. A week ago I returned to Lidl to find that ALL the booths were now card-only. Now I always carry my debit card, whereas before I never used to.

There are still places that accept cash only, for instance the open air market. Here I buy some grapes for a pound or some bananas for a pound, etc. There are also 'beggars' who explain that they are homeless or hungry, and I am stopped by these on average two or three times a week these days. I usually give them a quid, not because I particularly want to, but I feel that the state is failing in this area, and let's be honest, I don't even miss 2 or 3 quid a week. I notice that they always thank me very politely. What is alarming is how middle-class some of the people are these days who tell me desperately that they are hungry. What will the homeless do when cash disappears?

Visit the website of The Royal Mint Museum.

See: The Royal Mint Museum.

chrisild

Over here there are extremely few places that have gone from forcing customers to use cash to forcing them to use "plastic". Good. The places where you can use self-checkout cash registers in Germany, mostly bigger stores, will always have both cashier and self-checkout – and I think (i.e. not sure) that both types accept cash and plastic.

There are grocery stores around here that use cash machines: The cashier will tell you how much you need to pay, and if you choose cash, you insert your money into some slot, and get change back that way. All the cashier touches is the receipt that s/he gives you.

Yes, homeless people have been struck really hard by the Corona crisis. Usually I don't give money to people who beg in the street, but I always buy "fifty fifty", a homeless people magazine sold by homeless people, and usually from the same woman who I see at the same place almost every day. A while ago the price was dropped for a month, in an effort to get people's attention. Currently there is a campaign supported by "famous locals".

Whether this helps, I don't know – problem is that three issues come together here. First, something that is temporary only in my opinion: In the first phase of the pandemic, some people seemed to be reluctant to get in close contact with the sellers. (Do these people wash their hands? How filthy are their masks? etc.) Then, you get a printed magazine, something non-digital, paper etc. ;) Also, the sellers take (surprise) cash only – I doubt that this will be the future.

Christian

Alan71

Maybe it's just me then...  I just never thought I'd go from using cash for almost every transaction to not using it at all.  It's so much easier paying by contactless.  I refuse receipts as I can immediately log into my mobile banking app and see the payment pending.  I wish I'd done this years ago.  I used to hate having change and now I don't have to.

With homeless people, I'd rather buy them something useful (food or non-alcoholic drinks).  Sadly the likelihood (particularly where I live) of giving them cash is that the money might go towards drugs (particularly spice as that is an issue in city centres these days) or alcohol.  That doesn't help them at all.  I rarely go to city centres these days but Derby in particular has this problem.  I'm not going to fuel it.

<k>

I think the homelessness problem extends far beyond the druggies. I ignore those who appear to be druggies. The ones I give to are focused, polite, clear in their speech, and clearly care about their appearance and hygiene.
Visit the website of The Royal Mint Museum.

See: The Royal Mint Museum.

Alan71

As time goes on though, I do think there will be more of a need for places that don't/can't accept card payments to do so.  I've gone as far as being put off from buying from anywhere that doesn't.  Markets for instance.  I know it might be difficult to set up but there must be some way they can?  It's entirely possible that young people are growing up not using cash at all.  Markets cater for older people that still use cash (even during COVID-19). 

I really do have a sense of freedom from going cashless.  As with working from home, it's been a really positive experience for me.  I can't be the only one, particularly as things were going that way before then. 

Will I miss getting commemoratives and new coins from change?  Possibly.  <k> mentioned receiving some Shakespeare £2 pieces recently, and I think eurocoin had previously confirmed that these had recently been issued.  Waiting years for commemoratives to be issued in significant quantities seems bizarre in itself, as there have been so many more since (and by bizarre, I mean the Royal Mint doing this, not collectors being surprised to receive them).


Deeman


quaziright

I didn't blink an eye paying 99c for a timmy's pre-covid, so this isn't anything particularly life changing for me. From budgeting and expense tracking purposes (personal and business), it's so easy to just go to the online banking site and download a monthly spreadsheet which I could never have done with cash. In fact, cash payments f*ck the whole process up because if I wait too long, I'll forget what the Cash withdrawal/deposit was for. However, as I have a business, I do always ask for the receipts for tax purposes as I have to retain paper records for up to 7yrs. Unfortunately the CRA won't accept my credit card statements in lieu of receipts

redlock

Quote from: Deeman on July 18, 2020, 03:30:13 PM
Alan71 - don't go to the dark side!

I think it's too late  :(


And to answer the question in the title of this thread:
No, I do not think cash will fully recover from COVID-19; partially, yes; fully no.

By the way, looking at the monthly ECB figures for banknotes in circulation one can see that the numbers have been growing even during the pandemic.

Alan71

14 months on from going cashless, little has changed.  Except that today I had to draw cash out as the restaurant we went to had a signal problem rendering card payment impossible.  And to my dread, a handful of change.  Nice and shiny standard 50p and 2p, could they be new issues?  I turned them over and no, a 2019 50p and 2016 2p (both looked fairly recently issued).  And I quickly realised I've missed little since going cashless. 

I'll still buy the yearly sets as well as all the UK commemorative 50p and £2 issues, as there's a big chance most of them will never circulate, but the idea of bothering with cash again is something I don't think will happen.  Contactless card payment is much easier and convenient.

The change I accumulated today will soon end up in a supermarket quick till and good riddance to it.

FosseWay

As far as I know, the UK doesn't have a universal way of quickly paying money to individuals in situ in a shop/on a street/at a market/in a friend's kitchen etc. other than cash. Yes, you can make bank transfers but that generally involves considerably more time than either swiping a card or paying cash, and they don't necessarily register immediately at the other end, so aren't really suitable for in-person purchasing.

For as long as that is the case, there will be a need for cash, not just for markets (where the merchants are at least businesses and may well opt for contactless in the medium term) but for car boot sales, parking of the "pay the farmer £1 to park in his field" kind, charity jumble sales and, not least, just settling up with a friend after you've gone for a drink or similar.

I have no objection to using cash. In some circumstances it is quicker than using a card, in others slower, but either way the difference in time involved is so small that it's not worth bothering about IMO. And I think the covid-related arguments against cash are ridiculous* and broadly manufactured by sectors that have an active interest in seeing cash denormalised regardless of the effect of that on individuals. Notwithstanding that, I've used no cash for over a year now, and very little even before covid, because I have simply followed the trend (or, often, the requirement of the person/merchant I'm buying from). And the reason I can do this is Swish. Especially if there's a QR code to scan so you don't have to type the phone number in, it is more or less as quick as cash, and everyone with a phone can use it.

I may be out of date, but AFAIK the UK, and many other countries, don't have an equivalent. Yes, there's Apple Pay if you've got an iPhone and so on, but none of these is universal, where the only requirement is to have a phone and a bank account.

The other thing to bear in mind is cross-border payments (in person, I mean, when you're on holiday). Swish doesn't work outside Sweden. If I go to Denmark, I can either pay by card for every little bus fare or ice cream, and get walloped with a transaction fee each time, or I can take out a few hundred kroner in cash and pay one transaction fee. Guess which I choose? I believe there are problems even with compatibility of some forms of electronic payment between euro-using countries. For obvious reasons, the need for people across Europe to do this in the last 15 months or so has been hugely reduced, so this particular effect of the reduction in cash use has not really been noticeable. But I think it will become so again when people travel more again.

* With the obvious exception of the fact that in order to pay cash, you have to be physically present, and during the pandemic it is better all round if you don't shop in person at all. But if you do, I don't see that using cash is remotely more problematic than using a card, given that by far the greatest risk is being in the shop in the first place.

chrisild

Guess that the pandemic accelerates or accelerated trends that have been there before. In countries where cash is not used that much anyway, it is and will be used even less. However, people who a year ago were afraid that notes and coins were "unsafe" with regard to the SARS-CoV-2 virus, later learned that little beasts staying on surfaces is not a big issue when it comes to that: It's breathing, talking, singing, etc. ...

So here in Germany I see two "trends". On one hand, many learned in the past year how convenient cashless – and particularly contactless – payments are. (Also because the "PIN threshold" is now higher, i.e. you don't have to enter your secret code that often any more.) Then again, cash is now more common again at least for smaller amounts.

Side note: Unfortunately the Garmin watches/bands work with very few card or account types only. If they supported more, I would definitely use that kind of payment. But getting another bank account, or a prepaid credit card, just for that ... nah. :)

Christian

FosseWay

I didn't even know it was possible to use my Garmin watch to pay for stuff!

But when I'm out I always have my phone with me, which has a slot for cards, so as a bare minimum I always have phone, bank card and driving licence with me anyway.