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Is The Cashless Era Coming?

We know you’re doing all you can to keep your family and loved ones safe — Should you still be using cash to help during this crisis? How significant is the danger of using cash during these uncertain times?

In the wake of a global pandemic, health and safety are generally at the forefront of everyone’s mind. People are keeping their distance, postponing get-togethers, and avoiding high-contact areas. The COVID-19 pandemic has and will remain to change our daily habits exceeding the curve of the virus. So what does this suggest for the world of physical currency? Is cash officially off the table?

This would depend on who you ask. Whereas cash is the end-all for some, others haven’t used cash in years. Numerous Americans work from home, shopping online at the comfort of their home, and omitting their cash at home. With the current technology like digital platforms, banking apps, mobile wallets, and contactless payment options, most specifically cryptocurrency, many have used the current crisis to stop using cash entirely.

But does cash pose a substantial hazard to consumers? The answer is somewhat, very complicated.

How much of cash did we use during the pre-pandemic?

In the years spanning up to 2020, America had then started enduring a drop in the rate of cash activities. Technology, digital payments, and credit cards had rapidly changed the consumer landscape. Research administered by the Federal Reserve Bank of San Francisco affirmed that in 2018, customers used cash in only 26 percent of purchases, which was declining almost 30 percent from 2017.

The United Kingdom underwent a comparable shift from cash, with 51 percent of sales driven by card and barely 23 percent taken by cash, down from 58 percent a ten years ago, as reported by Matt Lewis, a chartered financial planner at EQ Investors.

Pre-pandemic, many Americans now found cash to be inappropriate. With the stay-at-home orders and stores blacking out, online shopping became the only reliable method of transaction.

Cash isn’t the only item that can spread harmful viruses; these everyday items are way riskier than you think.

The shift from using cash

Cash lost its favor for many Americans for a multitude of reasons. Utilizing a credit card or their phone showed more comfort than carrying enough money or bothersome change. The classic “emergency twenty” may not have left their wallet or purse in years.

Companies also started to shift from cash because of its advantages for them. Credit cards and mobile wallets suggested enhanced security, can be tracked, and safety through less cash on the premises.

Analysts noted that the pandemic intensified now current drops in cash activities. “Merchants and consumers [have] reconsidered their behaviors,” says Paypal’s SVP, senior technologist and chief merchandise architect, Arnold Goldberg.

“Not having contact with customers and shutting down retail establishments completely created a catalyst for change.”

The flipside of this situation, many analysts believe the consumer drifts away from cash pre-pandemic, and the spending/behavioral differences post-pandemic can’t only be undone. Some stretched as far as to say the global pandemic may not be the death penalty to cash that consumers thought it would be.

COVID-19 may have accelerated the adoption of contactless and digital payments for small business, but the population at large will revert back to old behaviors,” stated by a professor of digital innovation at Brandeis University and Continuing Studies at Stanford, Mr. Aswin Pranam.

“Unless there is a scientific consensus that physical bills effectively transmit the virus, most people will ignore the risk associated with using plain bills.”

If you are a dedicated cash follower, make sure you’re using credit and not cash for them.

How secure and safe is using cash during these times?

“Cash has long been studied for its potential to carry germs including virus and bacteria,” says Dr. Teresa Bartlett, Managing Director, and Senior Medical Officer at Sedgwick. A study published in 2017 on one dollar bills circulating in New York City

“demonstrated there are hundreds of microorganisms like E. Coli, Staphylococcus, Salmonella, MRSA…94 percent of paper currency has such infectious pathogens on it.”

While no major health organizations have come out against cash, many are insistent on its risks. The CDC, World Health Organization (WHO), and other epidemiological organizations recommend washing your hands after touching or exchanging cash. This is the same view for communication with any high-touch surfaces or objects. So why is the dollar such a point of concern?

Additionally, cash is difficult to correctly clean or sanitize, unlike the plastic of credit cards or phone screens. The United States currency is 75 percent cotton and 25 percent linen. Past studies on comparable elements show high potential for cash to hold the virus for anywhere from a few hours to a few days (even over a week by some accounts).

While experts differ slightly on the specific risk level, they all agree that cash could spread COVID-19. As always, the best way to decrease the risk of catching any virus is through proper disinfection and handwashing.

Should we anticipate the cash to be out of circulation soon?

While cash may no longer be king, America is not ready to dethrone it just yet. Money is still used by much of the population for small transactions or budgeting purposes (like these moments where it’s better to use cash). Small, rural, or specialized businesses such as flea/farmers markets, barbershops, laundromats, bars, and others rely on cash-based business models.

Those with smaller budgets and those over the age of 65 still use cash proportionately more often. This leaves a sizable portion of the population with fewer options. Some cities tried to combat this with ordinances requiring businesses to accept cash (San Francisco and Philadelphia). Liam Hunt, financial writer and market analyst at, notes that the cashless society is inequitable to many already underserved:

“The adoption of cashless purchasing is a matter of fairness and equality of access…a question of economic justice.”

Who is left out in a cashless society?

With as high as 6.5 percent of Americans without bank-issued debit or credit cards, the underbanked population is one barrier to an entirely cashless society. Cash is used more frequently by economically disadvantaged or without access to technology or the Internet.

A 2017 Federal Reserve survey found as many as 50 million households in the United States were underbanked or unbanked. Many more families are without consistent access to a mobile phone or Internet connectivity.

“We tend to demonize cash in fear-based situations while overlooking a sizeable portion of the population reliant on it—without directly addressing the needs of the underbanked, we can’t smoothly go cashless, even right now,”

Shane Dutka, founder, and general manager of Review Home Warranties, notes.

A cashless society could disproportionally harm specific demographics. “Those who live in areas with poor Internet or phone connectivity could struggle to make basic payments,” according to Anna Barker, personal finance expert and founder of LogicalDollar.

“Those with physical or mental health problems or the elderly who struggle to use technology could be left behind.”

The switch digital or online payment platforms (such as PayPal, Venmo, Cash App, Apple Pay, Google Wallet, Zelle, Square, Stripe, etc.) might also create difficulties for older customers. Many platforms offer enhanced security protections, instructional videos, and transaction insurance to combat distrust and concerns.

And now, for the important question: Should you continue using cash?

The short answer is no, not necessarily. The longer answer is while cash does offer a risk of transmission, it is not necessarily more dangerous than any other medium. The World Health Organization, despite some false claims to the contrary, has not advised against the use of cash. Neither has the CDC or any other major health organization.

The advice remains to wash and sanitize your hands after exchanging or touching cash.

Still, if you’re concerned about using cash in the wake of a pandemic, there are other options. Contactless payments, credit and debit cards, and digital wallets are providing new and safe payment methods. Chester Spatt, a finance professor at Carnegie Mellon University’s Tepper School of Business, promotes online markets as they are inherently scalable. These online markets can handle the predicted influx of new users and businesses efficiently. Also, increasing accessibility by adding hundreds of new companies each day and extending access to less metropolitan areas.

“We’re not predicting that cash will go away entirely in the foreseeable future,” says Angela Conti, head of consumer payments at TD Bank.

“We’re not combatting a move away from cash, but rather we are focused on providing customers with safe, secure, and convenient payment options to fulfill their needs.”

While most health and finance experts agree that cash isn’t going anywhere, they disagree about what the future may bring. Cash may have once been king, but digital finance and payment technology give it a run for its money.

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