Concerns about virus-transmission have led to a spike in customers electing to tap or swipe a terminal instead of fumble with bills and coins.
As it has with many other aspects of modern life, the coronavirus is accelerating a longer term trend: cashless payments.
Businesses and customers have long been shifting their preference from cash to digital payments for many years now, and recent data show a significant uptick in how businesses are getting paid during the pandemic.
Nearly one in five small businesses surveyed by payment processor Square said they weren’t accepting cash at all during the pandemic, though most expect to resume accepting bills and coins after the health crisis settles down.
Between March 1 and April 23, the number of almost-cashless Square sellers (those who processed 95% or more of their transactions digitally) almost quadrupled in the US.
Cash certainly won’t disappear fully anytime soon, but there are several key advantages for small businesses to embrace a more digital future.
Customers are worried about using coins and bills
Analysis from the Bank of International Settlements suggests that the risk of transmitting diseases via physical currency are actually quite low.
Still, search data for phrases like “cash corona” showed that people are worried about using coins and bills, so offering a touch-free solution is a clear way for businesses to show they take those concerns seriously.
It’s important to note that card payments aren’t necessarily touch-less, and the BIS study found that viruses last much longer on plastic and steel than on paper and copper.
A combination of hygienic practices and tap-to-pay technologies would go a long way to reducing the risk at the register. And even if health anxieties dissipate quickly, new habits could easily keep customers paying with plastic instead of paper.
Digital payments lead to valuable data
Going digital also allows for more accurate transactions, as one Michigan coffee shop owner told the Stripe researchers.
“We have really enjoyed the forced lack of cash exchange from a reduced process and room for error standpoint,” said Nicholas Pidek of Foster Coffee in Flint.
There are still plenty of reasons for a business to continue accepting cash. Some cities and states require it, and two-thirds of small business owners in an earlier survey from Square said their customers would react negatively to going fully cashless.
Those consumer sentiments could be shifting in real-time, though, and some entrepreneurs say shifting toward electronic payments has made their daily operations easier.
“From a practical standpoint as a business owner, not having cash simplifies my life 100%,” said Los Angeles restaurateur Kelly Kim in an earlier report from Square.
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1 in 5 businesses are refusing cash during the pandemic. Here are the upsides to going digital, aside from not having to touch strangers’ hands.
