The coronavirus outbreak has changed our relationship with work, health and… cash. The fear of contamination while handling coins and banknotes has accelerated a trend that had already been growing for years: contactless payments. Both consumers and businesses that may have been previously reluctant to go digital are changing their preferred payment methods. Does this mean the end of cash?

Digital payments on the rise: The adoption of digital and contactless payments has seen significant growth all around the world, be it through websites, mobile phones or credit cards.

• In India, a poll conducted by Mastercard on digital payments revealed a 19% increase in the actual contactless cards issued in the first quarter of 2020, theFinancial Expressreports. The corporation also found that contactless transactions were particularly high for purchases below $10 and in four types of establishments (supermarkets, restaurants, bars and gas stations), which registered more than 1 million contactless transactions each month at the beginning of 2020.

• Malaysia is also one of the fastest-growing countries in Asia Pacific to adopt contactless payments, according to The Malaysian Reserve. A study conducted by Visa revealed three out of five Malaysians prefer using digital payments compared to cash before the pandemic while another report by Mastercard found that 40% of Malaysian consumers have reported increasing the use of their mobile and digital wallets.

• With businesses closed during the lockdown and many consumers feeling uncomfortable returning to stores post-confinement, online shopping has been soaring in many countries. According to Adobe's Digital Economy Index, which analyzes global digital commerce trends, online shopping reached $66.3 billion in July 2020 — a 55% increase compared to last year. Several e-commerce companies reported very high figures: Amazon's net income increased to $5.2 billion in the second quarter of 2020, compared with $2.6 billion last year, while Argentina's MercadoLibre registered revenues that increased 123% compared with 2019. In China, the online sale of physical goods grew by 25% in June 2020 while e-commerce accounted for a quarter of the country's total retail for the same period, with categories such as cosmetics and beverages on the rise.

Multiplying cashless options: Governments and private companies alike are encouraging contactless transactions by offering new payment options for consumers in various sectors.

• The French government, in collaboration with Visa and MasterCard, raised the contactless transaction limit of credit cards from €30 to €50 on May 11th as the country started to ease lockdown measures. French citizens immediately took advantage of the new measure: Les Echos reports that a mere three days later, three million transactions between €30 to €50 were made — raising contactless transactions by an additional 15%.

Someone using a credit card on a white POS machine. — Photo: Clay Banks/Unsplash

• Shops and businesses are also adapting to the new trend. In the United States, a National Retail Federation survey found that 58% of retailer respondents were now accepting contactless cards, an increase from 40% compared with 2019. Big retail companies such as Walmart have expanded contactless options for both payment and delivery, such as using QR codes for purchases via smartphone apps.

• Some companies are also trying to offer completely new contactless solutions. KEB Hana Bank, one of the biggest commercial banks in South Korea, has partnered with the Korea Expressway Corporation to create a blockchain-based toll payment system across the country's highways. D Dailyreports that the project, expected to be launched before the end of 2020, will help remove cash and credit card payments as motorists use their smartphone banking apps to pay for tolls. Both parties stated that the pandemic is helped spur them to create this new system.

• In the Philippines, GCash, the country's largest mobile wallet app with 20 million registered users, is working with the government to equip taxis with scan-to-pay systems where users pay via QR codes from their smartphones, Nikkei Asia Review reports. In parallel, the government has been promoting digital currency through an online payment platform for administrative services called EGov Pay. By the end of March, the country had increased the number of government institutions that accept digital payment via the platform by 56%.

No more cash? As more and more payments are made digitally, cash seems to be in short supply in some countries — but maybe not for reasons you would think.

• It is now common in the United States to see signs in restaurants and stores that ask customers to pay with credit cards or exact change. Why? Because the country is facing a national coin shortage this summer. This is an unusual result of the economic slowdown caused by the pandemic. The Federal Reserve explained in a statement that the shortage was caused by a "slower pace of circulation" of coins during the lockdown. As businesses reopen across the U.S., demand for coins exceeds the available supply — to the point where banks are asking customers to bring spare change, USA Today reports. To address these disruptions, the Federal Reserve has established a "Coin Task Force," which recently released a first set of recommendations.

• Further north, a similar deficit has arisen from a resistance to the cashless trend. The Bank of Canada is currently facing a shortage of $50 bills due to citizens hoarding cash during the pandemic. A report indicates that the increase in consumer demand for banknotes was "significant," with withdrawals concentrated in major cities such as Toronto and Montreal. The bank registered a spike in demand for all bank notes in April and May compared with the past five years. However, the hoarders may not be able to spend their banknotes at all as many businesses ask customers to avoid cash payments while others even refuse them.