CASH OR CASHLESS? THE FUTURE OF TRANSACTIONS - POST COVID.
It is agreeable that the Coronavirus has precipitated global tailspin in the financial sector. Obvious observations are the redirection by households to reserve their expenditure to the essentials, a tanking in the purchase of luxurious items and the mass adoption of cashless transactions. This is a global economic crisis. With consumers being concerned about the health risks associated with handling coins and notes during transactions, has led to the need for alternative payment methods, contactless and mobile wallets.
Despite that majority of consumers have been practising cashless modes of payment, there is concern over inconveniencing the poor. These members of society do not have access to bank accounts may experience difficulties when making payments during this pandemic. These Apps or cashless methods require to be connected to a bank account to facilitate payments. Though cash payments have been considered to be flexible and provide autonomy, certain gigs rely heavily on cash transactions.
A recent study done by the Bank of Australia found that about 10 years ago cash transactions were the main form of making payments. However, by 2016 this had dropped by 37% and by the end of 2019, cash transactions had tanked further to 27%. From the onset of the pandemic, there has been a plunge in cash transactions to as low as 10%. This being associated with the great health risks associated with cash transactions. It has been recorded that Australia’s Big Four banks have been forced to close over 70 physical branches during these lockdowns enforced by Coronavirus. Also, another notable result is a drop in ATMs and the issuance of paper cheques.
In a country like Sweden, legislation has been passed to guarantee cash access to individuals who need to use it. These consumers are located in either rural or remote areas and the elderly who have a heavy reliance on cash transactions.
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