By Andy Burton, CEO at Tryzens
We’ve already heard that the era of cash is over, it’s a broken record.
However, Covid-19 has made cash literally a dirty word, with rumours of the virus spreading through things we touch, and what changes hands more often than cash?
Personally, I still had the same cash in my wallet from the day we started social distancing to over a month later at the time of writing. Cash handling is seen as risky in our heightened awareness of the pandemic and we are actively encouraged to use touch / pin payment in grocery stores, for the vet we paid over the phone, friends settle shopping debts through Mobile App banking, we pay parking online, kids pocket money can be loaded on to kid-friendly cards and even takeaways and tips for services like Deliveroo are paid to the rider/driver online.
With no limit on the alternatives to physical cash as a convenient way of payment, will we ever go back to trusting cash as being truly clean, risk free and convenient? The use cases for cash are diminishing for all but three groups:
Looking to the technical and financial world, we are seeing tremendous innovation with payment methods which are becoming a growing ‘influencer’ of people online as new methods gain popularity and loyalty, effectively creating a community that can be harnessed to direct consumers to specific opportunities or stores or brands. The regulated payments industry is evolving at a pace and driving a lot of innovation with businesses like Stripe, Klarna and Zip building new and convenient payment options and in so doing are building loyalty and new communities online.
In much the same way handling cash has become a bit tarnished of late, younger generations with evolving social perspectives have been seen to move away from traditional banking and credit cards to new players such as online-only banks, like Monzo, and payment options like ApplePay, Buy-Now-Pay-Later services and Paypal.
Industry regulation has been consistently evolving to improve consumer choice, enhance security and simplify usability. Initiatives such as the European second Payment Services Directive (PDS2) are driving up security and anti-fraud standards and moving us more efficiently toward simple bank to bank payments/open banking.
There is almost an ‘act of faith’ expected when asking some generations to trust digital payments and banking vs what they carry in their purse or wallet, and, yes, there are lots of horror stories out there about identity theft and fraud online that continue to drive higher standards and assurance. However, the progress on security, the innovation and engagement by the payments industry, and the restrictions of the Covid-19 pandemic are all forces for sustained and positive change albeit it heaping further pressure on the relevance of cash if we can provide solutions for the first two of the three groups outlined above!
Looking ahead, even our sense of sovereign currency is being challenged in the new global market in which we live and can operate, perhaps giving credence to the logic behind the plethora of crypto currencies being developed, but with several marred in fraud and criminal activity, having confidence and trust in crypto currency is perhaps a step too far for even the Covid-19 pandemic to influence.