August 6, 2020

Digital money transfers get Covid-19 boost as consumers shun cash

By Lucy Ingham

Digital transfers of money have seen a rise in use during the Covid-19 pandemic, while cash has seen a sharp decline.

This is according to research published by Paysafe, which surveyed 8,000 consumers across the Germany, Bulgaria, Canada, Austria, the US and the UK.

It found that over half of consumers had used digital transfers to give money to friends and family at least once during the first month of lockdown, with 20% doing so more than twice.

Meanwhile, many consumers are increasingly shunning the use of cash, with 43% saying they had cut down on the amount they handled cash over concerns relating to the transmission of the coronavirus.

However, while these behaviours are a reaction to the pandemic, they appear to be turning into long-term behavioural changes.

48% say they will reduce their future use of cash, while 38% will increase their online shopping even after all lockdown measures have lifted.

Rise in digital money transfers show payments transformed by Covid-19

The research on digital money transfers adds to the growing pile of evidence that the payments landscape has been permanently changed by the Covid-19 pandemic.

“Covid-19 continues to be a catalyst for change across the whole payments industry,” said Lorenzo Pellegrino, CEO of Skrill, Neteller and Income Access at Paysafe.

“Consumers seem to be switching to digital offerings, signalling a definite shift in consumer preference for truly frictionless payment methods.

“Even as cash-based money transfer options reopen, preferences towards digital options, induced by the pandemic, are unlikely to subside.”

The research follows a number of other studies that have shown similar results.

In June, UK Finance found that 7.4 million people in the UK are now living “almost cashless” lives, while a rise in contactless payment options has led growing numbers of retailers to stop accepting cash entirely.

Looking to the longer term, some experts, including Deutsche Bank, have suggested that cash could ultimately be replaced by cryptocurrency due to the fragility of the current system.

Read more: A cashless society threatens poorest most, finds study

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