“Twilight of the cash”, or how the pandemic influenced our payment behaviour

Pandemic is a catalyst for many processes that existed before; however, weren’t able to develop quickly enough. An example is cash payments, which, despite the dynamic development of innovative methods, still play a huge part in the money circulation. According to a study conducted for  Santander Consumer Bank,  47% of respondents reduced their use of cash during a pandemic.  In turn, 38% began to use a payment card more often, including when paying for purchases in the traditional stores. It is evident that the pandemic “encouraged” Poles to change their payment habits. Using the analysis developed by PayPal, we can identify three factors behind the current trend and those that are yet to come:

EROSION OF CASH as a payment method due to hygienic concerns. Admittedly, according to all reports, it is difficult to catch coronavirus this way. Nevertheless, the problem exists, and its solution, i.e. minimizing cash payments, may be necessary for the stores themselves; in case of touchless payments logistics is limited or there is no need to disinfect coins or banknotes.  It is not surprising,  then that many of owners directly encourage card payments.

RISK GROUP, which consists of, in no small extent, seniors, have changed their payment and shopping habits, not for convenience, but safety reasons. The former hard-core users of cash are particularly vulnerable to coronavirus; this fact has translated into their willingness to eliminate all sources of potential risk. Even as marginal as cash. This way, cash has lost its power in the eyes of customers segment, who until recently seemed to believe that only “cash is king”.

E-COMMERCE, this seems obvious, but the growing importance of online shopping is decreasing the importance of cash; especially when the buyers mostly choose online payment methods.

SEPARATION OF BUYING AND PAYING; along with the increase in the popularity of e-commerce and the development of fast payment methods such as Blik or Visa Checkout, there is a more apparent separation of the product’s search and purchase process (which can last a while) from the payment itself. The last one happens immediately, and its convenience is raising the bar for the traditional payment method.