Cash is a universal payment and as our communities, businesses and economies recover from this pandemic, payment choice is exactly what we will need for COVID19 recovery.
As we begin to watch Europe gradually phase out of lock-down, it finally feels like that tiny glimmer of light at the end of the tunnel… But, we have to wonder how the COVID19 virus has affected us as a global community and how it has forced the payments industry to adapt to the crisis and the needs of the customer. Not to mention, what have we learnt from this pandemic and what will our payments future look like after such a life altering event?
The survival of businesses…
The best way for businesses to survive has been re-evaluating the way they offer their services… as a result of this, some businesses have had to adapt to specific delivery systems, creating digital pop up shops to sell their products e-commerce style.
With this in mind, the payments industry has gotten a real insight into the way our global business community can cope during a crisis and in turn, how we will be able to adapt further in the future.
Cash withdrawal amounts increase…
As the lock-down restrictions have encouraged many to make contactless payments and purchase online, we did see cash withdrawals fall… however, it’s interesting to see that the cash withdrawal amounts increased! This means that though the number of times the ATM was visited has reduced, cash is still needed as a payment option because people have been increasing the amount they withdrawal!
Even at the peak of the crisis, LINK (the UK ATM Network Provider) reported that in one week 11 million people used the ATM to withdraw cash, equating a value of £1billion. In Europe, the rise in cash recirculation in the 4 weeks leading up to April 10th went from €41.2bn to €1.33tn. Big numbers granted, but what does this actually mean?
The ECB advised that according to a previous survey, about a third of all cash in circulation is kept by households as a safe asset for “rainy day” purposes. We would suggest that this is exactly the type of behaviour that saw ATM visits reduce, but withdrawal amounts increase!
Ireland’s Central Bank also advised that there was a marked increase in withdrawals and stated “This was combined with a lower number of transactions at ATMs, suggesting that people were concentrating their cash withdrawals into a smaller number of ATM visits.” which, makes sense in an environment where major lock-down restrictions are applied.
Payment choice as an advantage…
So, has the payments industry been impacted? No – it’s just adapted.
The global community has adjusted to the new normal so that we can bounce back from this crisis, and that means in the way we do business and pay for goods and services.
Will cash recoup its numbers? Probably not – but that doesn’t mean it’s not needed.
Payment choice is going to help economies, businesses and communities move forward with COVID19 recovery. It will therefore be down to businesses to offer a range of payment choice to their customers to keep that balance and to make sure all customers’ needs are satisfied.
So, we just have one last question to sum up this article… is cash dead? The answer is no… no it’s not and it won’t be, not until we have a digital, all-inclusive option that suits every individual. Cash is a universal payment and it still has a place in society.
So, to summarise, as we come out of this crisis and begin to look to the future, we must adapt again to the needs of our customers and offer the choice they demand… especially during COVID19 recovery that has had a detrimental global economic effect.
For more like this topic, check out one of our most recent blogs… The risks to society in a move towards a cashless world, as we discuss exactly why cash is key.