Retail has adapted during the pandemic to make it easier for consumers to purchase goods in a safe manner. Part of this change has been with an expansion of digital payment services and online ordering, driven by the risks involved in handling cash (accelerated in part by some health experts putting forward the notion that banknotes might have be partly to blame for the lightning-fast rate of infection).
With the changes impacting retail, as with many digital transformation efforts, the earlier adopters have generally fared better.
End of cash?
Irrespective of the winners and losers, the outcome of this is a further decrease in cash, perhaps heralding its eventual disappearance. The downside of this is for those who are reliant upon cash (invariably those on low incomes) and those who prefer cash (often the older members of society).
In the UK, ATM transaction volumes fell to some 60 percent lower in 2020 compared with 2019. This was perhaps the outcome of many businesses refusing to accept cash at all.
Across the Atlantic, a third of U.S. adults have said they typically make no purchase using cash during a typical week.
Digital pandemic
Worldwide consumer adoption of contactless payment methods grew by 90% in 2020, and this has continued into 2021. To meet this change, and the rapid collapse of cash, some retail outlets were able to debut efficient curbside and in-store pickup processes quickly. However, other stores were slow to adopt and this led to customers waiting or led to customers electing to go elsewhere.
The retail switch to digital payments was made easier through more contactless and digital touchpoints being made available, far more than before the pandemic.
Digital payments
There are a range of digital payment options. Contactless technology is used in many debit and credit cards. In addition, there are services that store payment cards digitally (such as PayPal or Apple Pay), enabling contactless payments to be made using a PC or smartphone. Similar services link a person’s mobile phone number to their bank account so they can pay someone simply by sending a text.
Online ordering and BOPSIS
An alternative measure was through more retailers offering services whereby customers can purchase products online and then collect these later, such as on the way back from work as part of the daily commute. These are so termed “buy online, pick up in store (BOPIS)” services.
Future state?
Is this the end of cash? Probably, although it is uncertain when? Given the willingness of younger generations to use digital payment processes, this probably makes the decline of cash inevitable. And the pandemic has probably nudged this along much faster.
