Cash usage down by 7.69% — COVID-19's impact on the future of mobile & contactless payments


Back to all posts

Published on

In December 2019, there were rumors heading out of Asia of a mysterious illness that could make its way and spread across the whole world. By March 2020, the WHO (World Health Organization) officially declared COVID-19 a global pandemic as infections began to rise within Europe and North America before spreading to other continents.

With the coronavirus impact ongoing, life today is extraordinarily different from the life we knew just months ago. While lockdowns continue to loosen in some countries, face masks, hand sanitizer and uncertainty remain a part of our daily lives. Human behavior has evolved rapidly, involving a real global effort to prioritize hygiene consciousness and the prevention of spreading germs.

CardConnect and Fiserv have been working to discover and understand payment trends and behavior within the U.S. and we wondered whether the pandemic has increased the usage of contactless payments.

Illustration of mobile users paying for purchase

What are Contactless Payments?

Contactless or cashless payments refer to financial transactions that are conducted through the transfer of digital information between the two parties. Financial institutions have always looked at ways to make banking cash-free, an effort and that has accelerated with the rise of the internet, electronic banking and technological advances overall. The volume of transactions via methods excluding paying with cash has increased gradually over the last half century since the introduction of credit and debit cards. In recent years, the growth of contactless payment usage has picked up its pace due to common ownership of smartphones and laptops which has resulted in the emergence of banking applications and mobile payments (e.g. Apple, Google and Samsung Pay).

As some states continue to loosen their lockdown and businesses start reopening for footfall, various forms of protective measures are being implemented. Coverings and PPE (Personal Protective Equipment) remain a requirement in many shops and restaurants have been called to take necessary measures to limit human to human contact for the foreseeable future. Contactless payments seem ideal for this new environment and data shows there have already been signs of increased adoption.

What was happening with contactless payments pre-pandemic?

In the 2019 Expectations and Experiences report from Fiserv, we’re able to see the impact that technology has already had on most people's financial activities. Tech was up and paper was down as survey results showed a clear increase in digital technology usage for minor activities such as checking balances and tracking spending.

As a result of more people becoming accustomed to internet banking, we wanted to explore whether U.S. residents were embracing mobile and contactless payments or not.

We can reveal that before the pandemic, mobile payments had become ‘the norm’ as:

  • 62% of those surveyed use mobile payments
  • 57% also purchased in-app content via their mobile device
  • 41% of mobile spenders have increased their usage from 2018-2019
  • 35% of in-app spenders have increased their usage from 2018-2019

The data shows that a high proportion of those surveyed were already increasing their mobile and in-app payment purchasing. By December 2019, mobile payments became the most popular form of contactless payments:

  • 74% used a mobile wallet (e.g. Apple Pay)
  • 61% used a contactless-enabled credit or debit card
  • 21% of all banking customers have used a contactless payment method

This data is evidential to the contactless payment trend that was already taking place within the U.S. In the same survey, the main reason for reluctance to increase usage focused on elements of security:

  • 78% had security concerns with contactless credit cards
  • 77% had security concerns regarding mobile payments

We can decipher from these statistics that only a 1% difference between security concerns could be in line with why mobile payments were experiencing a quick growth rate.

What have we seen since the COVID-19 pandemic?

We recently analyzed the changing effects of consumer spending due to this coronavirus within the U.S. and found differentiations within industries regarding an increase and decrease among spending.

Options to pay safely and for businesses to trade during lockdown were available due to the rise of contactless payments and deliveries. With the pandemic causing businesses to close down and people’s freedoms limited, spending across different industries had decreased year over year, although these struggles were minimized for the restaurants that continued to deliver and retailers who continued to function at limited capacity.

Since then, we’ve noticed a media trend within the payments industry:

“Will COVID-19 end the use of paper money”

Washington Post

“Will COVID-19 kill cash as we know it?”


“World Health Organization: ‘We did NOT say that cash was transmitting coronavirus’”


Fiserv has investigated and looked into usage of cash at the point of sale since January 2020. The latest June 2020 SpendTrend report shows that there has been a significant decrease in the usage of cash:

Graph showing Cash usage decreased by 769 bps since start of 2020

As you can see from the above graph, Mid-March experienced a significant drop in the usage of cash with a drop of 769 basis points (bps) since January.

Looking at a tiny rise in cash payments at the beginning of June 2020, it appears that we have reached a new low for cash spending. It will be interesting to see in the coming months whether the pattern increases or stabilizes with low usage. The next couple of months will give us a bigger picture of whether the coronavirus has caused a new spending trend or whether people will return to their old habits.

Currently, it’s looking like COVID-19 has impacted an increased usage of contactless payments and it has accelerated the rate in which transitioning to a more cashless society becomes a reality.

Along with this, we’ve also noticed some changes within mobile wallet activity:

  • Mobile Wallet/In-App activity has increased due to physical stores being closed
  • Consumers have also shifted toward delivery and pickup services
  • Since mid-March, there has been a ~1.6x increase in penetration of mobile payments

Graph showing mobile wallet share of transactions up by 1.6x since Mid March

This data further demonstrates the change in payment behavior within the U.S. as a result of the coronavirus pandemic.

It’s also interesting to note that both graphs have stabilized. As various states lift lockdowns at different times (depending on infection/recovery rate of the illness), it’s interesting to note that there have been minimal increases and decreases in the figures related to payments from mid-April until June 2020. This could be showing us signs that people are sticking to cashless payment methods despite potentially having the option to pay via cash.

For now, it’s safe to conclude that the COVID-19 pandemic has definitely changed people's paying behavior. Businesses are less keen to accept cash forms, consumers don’t wish to touch payment terminals and everyone is more conscious of reducing their human contact. Contactless payments were emerging and growing within the U.S. already and COVID-19 has clearly given consumers an unavoidable push to further embrace the technology. The true picture will become even clearer as we continue to track this data over the upcoming months.

Looking for more information?

Fill out the form below and we'll connect with you.


Thanks for your interest!
We will be in touch soon.