20 FEATURE
Cashless after Covid? The appetite for contactless and digital payments has rapidly accelerated under the Covid-19 pandemic. With cash increasingly falling out of favour, Julia O’Reilly asks whether we’re entering the cashless era
T
he jingle of coins jostling in a pocket. The crisp texture of a new ATM dispersed note. Both encompass the sensual encounters we’ve been having with cash for decades. Encounters that are fast fading into memory, as digital wallets and payment cards gain momentum in the marketplace. As Covid-19 spread, so too did global reluctance to handle coins and notes when cashless payment was a viable option.
Research from the Banking and Payments Federation Ireland found that at the end of April, 43% of consumers made weekly payments via their smartphones. ATMs gathered dust from lack of use when cash withdrawals shot down 56% in a six-week period. To aid the transition - given that contactless payment was best practice for both retailers and consumers - the contactless withdrawal limit was increased in April of this year from
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€30 to €50. The response was instant. May saw the highest monthly figure on record, for contactless payments in Ireland: €600 million.
‘On the way out’? For all that, the transition has been a long time coming. Cash use has been in decline since the last quarter of 2019. A study commissioned by One4All before Covid-19 broke, found that half of Irish adults use digital banking or contactless payments more often than they use cash. According to the same study, 25% of respondents used smartphones to make contactless payments, 10% said they “never carry money,” while 43% believed that cash is “on the way out.” That trend is undeniable. According to research firm, GlobalData, Finland is the furthest along the road to a cashless society, with South Korea, Norway, Sweden and China lining up behind them. Ireland was placed eighth overall in terms of electronic transactions, boasting the most frequent use of cards across the globe. Now, months into the ‘new normal’, we are inching ever closer to a cashless society reality. And, reality it is, as if recent research from PayPal is anything to go by, the future will likely be cashless. Of 2,000 Irish consumers studied, 39% said they do not want to use cash post-Covid-19. That translates to over 1.9 million consumers expressing an aspiration to ditch the cash. Add to those, the additional 65% who said they believe a cashless approach is important in these times and the trend is unmissable, especially when we take into account that 61% of shoppers that use contactless payments, said they “try to avoid touching a card reader pad when making purchases”. Commenting on the PayPal survey results, Annette Hickey, vice-president for EMEA
