The coronavirus remaining on cash may accelerate cashless adoption

• New research suggests that the virus can live on cash for an extended period.
• These findings may reignite fears about cash usage and further drive up digital payments.
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Australian researchers discovered that the coronavirus can live up to 28 days on cash and other common surfaces at about room temperature, per Finextra.

It’s worth noting that the presence of the virus doesn’t mean it’s still transmittable beyond a certain period. The news adds to conflicting findings on cash as a potential virus vector: In April, European Central Bank research  found that the coronavirus can survive more easily on stainless steel surfaces than on cotton banknotes, while the World Health Organization (WHO) walked back comments suggesting that the virus can be transmitted via cash. 

Whether the virus can be transmitted via cash or not, the pandemic has helped accelerate cash decline in global markets. Cash usage was already declining in major markets prior to the crisis: US consumers used cash for about 26% of transactions in 2018—mostly under $10—down from 30% in 2017.

But declines sped as customers looking to limit physical contact opted for digital payments more often, likely influenced by government recommendations and initiatives. South Korea’s Central Bank  quarantined cash stockpiles and, in some cases, incinerated cash that may have been infected with the coronavirus, and the Chinese government made similar moves to limit the transmission of the virus, for example.  

These findings may reignite fears about cash usage and further drive up digital payments, leading the move away from cash to persist beyond the pandemic and change consumer preferences long term. 

• Cashless payments could continue to grow. Consumers may be even more likely to turn away from cash due to the fear of paper money carrying the coronavirus. Cards may be seen as a safer payment method than cash since they’re for personal use only. And since most consumers already have a preference for card transactions—59% of US consumers said they prefer to pay for goods with a credit or debit card, according to a study by Travis Credit Union, for example—card transactions should continue to see further growth as the pandemic continues for the foreseeable future. 
• And contactless payments may continue to gain traction. Contactless cards and mobile wallets like Apple Pay and Samsung Pay continue to see increased usage—more than 50% of US adults are now using some form of contactless payment—especially in the US, where adoption has historically lagged behind. Contactless payment methods enable consumers to limit physical touch at payment terminals, which could be seen as a safer option than cash. As more merchants enable  contactless payment methods and transaction limits continue to rise, it may become even easier for customers to avoid cash and turn to contactless more often. 

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