COVID 19 has caused a major change in the way people now handle money. Banks have had to transform their services to adapt to the new normal and many shops refuse cash payments altogether. The idea of a cashless society is not new but there has never been a more apt time to make the switch. Though it is unlikely cash will be phased out completely Whitestone predict that society will see a rise in the number of cashless payments being made. The pandemic has caused a shift in our attitudes towards cash with the WHO advising the public to use cashless/contactless methods to reduce the spread of the virus. It is likely that these attitudes will “stick” long after the pandemic but is the world really prepared for a cashless society?
The benefits of going cashless have risen in the past 10 months with many believing that handling cash could increase the risk of transmission. The idea that money could be contaminated with the virus has led to consumers making the switch. Especially for the new plastic notes in the UK. Even before the pandemic, however, cashless payments were seen as a quick and efficient alternative to handling money. The only problem lies with security and potential fraud problems. As long as the public are using PINS and two-factor authentication methods then the risk posed remains low but the move towards contactless payment could change this. Physically entering your PIN on a card-reader holds a hygiene risk and in our new normal this will not keep up. This has led many to use contactless payment but this puts the user at a greater security risk. There is concern that contactless payment lacks the basic two-factor authentication to provide enough security to users. To combat both these concerns many card companies are looking into biometric technology to provide authorisation with a focus on hygiene. Visa is one of many companies that are trialling this technology by using biometric fingerprint cards that are fast and efficient.
Despite the acceleration of cashless payments, it is unlikely cash will be phased out altogether anytime soon. Our world still is not ready for a cashless society with 1.3m people still unable to access a bank account. Developed countries could probably make the transition but would still face opposition as consumer companies warn that the move could result in the marginalisation of certain groups. These could include those who are retired or low-income earners who have limited access to digital payments. COVID 19 might have changed the way we handle cash forever but it is unlikely that it will disappear. Morten Jorgensen, director of RBR, echoes a similar sentiment in his statement, “Cash is not going to disappear, but it will continue to decline, and Covid is accelerating that trend.”
© Whitestone Chambers