Cashless for COVID: How Businesses Are Relying on Cards during the Pandemic

With rising concerns about the cleanliness of cash, many businesses have been shifting to cashless models during the coronavirus pandemic. Consumers are now relying solely on cards and ApplePay to purchase products. We live in a world where electronic payments are becoming the norm, so will this solidify the end of cash?  In this article, we'll take a look at the changing payments industry, and whether this cashless model is sustainable.

In a 2019 Pew Research study, about 50% of Americans said they carry cash less than half the time. When they do have cash on them, 76% responded that it is less than $50. In the United States, only 18% of people use cash for the majority of their purchases.

According to a 2019 CNBC article, “Overall, about or 34% of adults under the age of 50 make no purchases in a typical week using cash, compared with 23% of those ages 50 and older… Wealth also plays a role. Adults with an annual household income of over $75,000 were more than twice as likely as those making less than $30,000 to say they do not make any purchases using cash in a typical week.”

But this does not mean cash will go extinct. In some states, it is illegal for businesses to refuse cash. These states include New Jersey, Massachusetts, and Rhode Island, with New York supposedly following this fall. While states are free to decide these laws for themselves, the FAQ page of the Federal Reserve reads, “There is no federal statute mandating that a private business or person or an organization must accept currency or coins as payment. Private businesses are free to develop their own policies on whether to accept cash unless there is a state law which says otherwise.”

As many restaurants and retailers go cashless, it’s important to note that cashless businesses may be discriminating against low-income customers. Many Americans do not have access to cards- or a smartphone for that matter- and rely solely on cash. According to CNBC, “Low-income, minority and less-educated households are more likely to have no bank accounts or rely on financial products that come from outside the banking system. People who defend cashless commerce cite greater convenience for customers and lower risks for businesses.”

While the World Health Organization is advising customers to avoid cash, recent articles show it is unlikely for viruses to be transmitted through cash, if users wash their hands regularly. Ultimately, it is unlikely that the world will go completely cashless any time soon. Many people think it is safer to use card, but most hardware demands that you enter your PIN on a keypad. This forces you to touch a surface that hundreds of other strangers have touched before you. As long as you wash your hands, avoids touching your face, and remember to wear a mask, we will continue to get through this, together.

For more information on payments processing methods, speak to a SwipeSum consultant for free today.