Coronavirus

The dual role of currency both as a store of wealth and means of payment has never been more apparent, as the numbers that report cash on issue and cash use remain dramatically different.

The pandemic has boosted revenue for many players in the digital economy. But both Visa and MasterCard have seen their revenue decline during the pandemic.

Since the beginning of the pandemic, a steady flow of disinformation has distorted the role cash may play in spreading Covid-19. Now, Australia’s national science agency has published a controversial study suggesting that the virus could survive up to 28 days on banknotes in strict laboratory conditions. However, the study’s lead author, confusingly, is minimizing the infection risk presented in his own work.

This year has been very dramatic for the global society. The full effects of the COVID-19 pandemic are still unknown and depend on the length of the exceptional period in various parts of the world.

The use of cash fell substantially in the early days of the Covid-19 pandemic with the acceleration in online shopping and contactless payments – but cash usage has bounced back as lockdown has eased. Long-term prospects for retail payments remain uncertain.

With the coronavirus pandemic moving past the six-month mark, one of the first notable side effects was a reduction in the use of physical greenbacks. The cash-out had several drivers: Most retail stores were closed or saw their operations greatly reduced, virtually all bars and restaurants that remained open could provide takeout service only, almost everyone who was able to began working from home, and online shopping from Amazon and other home-delivery options boomed.

According to the recently published Annual Report of the Reserve Bank of India, cash in circulation grew by 14.7% in value and 6.6% in volume between March 2020 and March 2019.

The mythical war on cash is not new, far from it. It is however often unclear who is waging it. During the Covid-19 pandemic, some of the enemies of cash have become more outspoken.Here are some of those who want to get rid of cash.

Recent research undertaken by the Mint Directors' Conference and member mints has confirmed that Covid-19 has accelerated the use of digital payments - and that the move to contactless transactions has thrown the spotlight on inequalities.

The IBDA and CashEssentials have been joined by other industry organisations - including ATMIA, BnEI, IACA, ICA and Reconnaissance International - to develop an initiative to support global recovery post Covid-19 by bringing together all actors in our community. They are calling this initiative, ‘HUMANIA’ but the project name will be confirmed upon launch of the initiative in September 2020.

Has Covid-19 speeded up a phenomenon already under way, favouring online retailing and the many alternative means of payment? Not quite as the banknote industry hits back against claims on the decline of cash.

The Covid-19 pandemic has changed the way we pay. Some central banks have accelerated their digital currency programmes. This would provide governments with frightening new powers.