Economy

Will coronavirus spell the end of cash?

The ‘cash is king’ mantra doesn’t apply in pandemic

The fear of germ-infected money is likely to accelerate the shift to contactless transactions. File photograph: The Irish Times

Thu Apr 16 2020 - 09:42

Big crises tend to compound big trends. To say the Covid-19 crisis is accelerating the shift online understates it entirely. When grandparants are using Zoom calls and Google hangouts to see their grandchildren, you might be inclined to view the revolution as complete. Most of the country is now working, shopping and communicating almost exclusively online.

Another trend being compounded is the shift away from physical money. It was already on the wane before we were forced into lockdown, now it's in free-fall. A Central Bank study, published on Wednesday, indicated ATM usage has nosedived by more than 40 per cent since the middle of last month.

The “cash is king” mantra that accompanies financial meltdowns, when investors can’t find a safe place for their money, doesn’t apply on the street during a pandemic, it seems, where plastic rules.

People are avoiding banknotes and coins to steer clear of germs on foot of warnings that money, the same as other surfaces can harbour coronavirus, despite the lack of scientific proof.

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Many shops here started to refuse notes and coins as the pandemic intensified last month.

The US Federal Reserve has even been quarantining dollars repatriated from Asia before recirculating them, as a precautionary measure against spreading the virus, according to a Reuters report.

The People’s Bank of China has used ultraviolet light or high temperatures to disinfect yuan bills, then seal and store the cash for seven to 14 days before recirculating them.

The fear of germ-infected money is likely to accelerate the shift to contactless transactions. Ireland was one of several countries to recently hike up the amount that can be spent via contactless payments.

AIB has also suspended plans to introduce contactless fees of 1 cent per payment due to the outbreak. Has cash had its day?

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