Consumers are replacing cash with payment cards during the Covid-19 pandemic, according to the “Purchasing in a Pandemic” report issued by Visa Inc. and consultancy The Strawhecker Group.
Among the findings is that 26% of respondents expect to use less cash following the pandemic when compared to before. That, coupled with an 18% increase in those expecting to use cash more often, means a net -8% intent to use cash.
Contrast that with card use. Twenty-seven percent say they expect to use credit and debit cards more often, while 17% expect to use them less often, for a net increase of 10%. Fifty-four percent expect their use to remain the same, and 2% said they did not use cards and will not start.
“Debit cards are making a dent here,” Jared Drieling, senior director of consulting and market intelligence at Omaha, Neb.-The Strawhecker Group, tells Digital Transactions News. Younger consumers, in particular, are adept at using debit cards and likely have used cash and checks far less than older consumers, he says. “This is a secular trend we’ve been seeing for some time,” Drieling says of the growing card use at the expense of cash.
Consumers also are picking up on card features, such as contactless. Of the 41% who say they have a contactless card, 60% of them use it for half of their purchases. Twenty-two percent use it less than half the time and 18% never use it.
That use appears to have longevity. Following the end of the pandemic, 55% of them expect to increase their use of contactless cards and only 11% intend to decrease their use. Many—34%—expect their use to remain the same.
The data also show that many consumers intend to use a mobile or digital wallet more following the pandemic, with 34% expecting to do so, compared with 7% who intend to decrease their use. Thirty percent expect their use to remain the same and 29% do not use a mobile or digital wallet.
These changes in consumer-payment behavior affect acquirers, too, Drieling says. “Coming to a merchant discussion and being knowledgeable around the behavior is the first step,” he says. That entails having more education about how consumer behavior is changing and how that impacts merchants, he says. For example, in a pitch involving a smart point-of-sale terminal, a talking point could be how it incorporates multiple payment technologies, even ones that may not yet be in broad use.
“We’re seeing a lot of interesting dynamics play out,” Drieling says, especially when viewed with already ongoing changes, such as the growth in integrated payments. “This will continue to change, the behaviors of merchants and consumers. Merchants need flexible solutions to be able to provide what consumer behavior is at the moment.”
The survey canvassed 569 U.S. consumers in July.