Cash may no longer be king, as coronavirus pandemic fears lead some consumers to embrace new ways of banking and handling their money.
Consumers are looking for all kinds of ways to minimize their contact with others in order to lower their risk of exposure to the coronavirus. A recently released survey from payments technology provider FIS sheds light on what types of precautions people have been taking when it comes to handling and exchanging money.
Overall, consumers are looking to technology to keep them safe as they embrace digital methods for managing money, and the new habits they are adopting may last far beyond the pandemic.
Adapting to life in the time of coronavirus
An earlier survey found that 9 in 10 consumers felt uneasy about frequenting brick-and-mortar stores during the coronavirus outbreak. Some consumers may also be just as hesitant to go inside of their neighborhood bank.
Forty-five percent of respondents who have bank accounts reported making changes to the way they do their banking since the COVID-19 pandemic began. Baby boomers — whose age could make them more vulnerable to the illness — were the most likely to make changes, with 46% using different methods of banking than they did before the coronavirus threat. They were followed by 39% of Generation Xers and 35% of millennials.
The survey found that popular spending methods during the outbreak include mobile banking options and online options:
- 45% of respondents said they were using a mobile wallet — a virtual method of storing payment information on a mobile device — during the pandemic
- 16% said they were now less likely to use some physical forms of payment (such as cash and checks) than before the pandemic crisis began
Embracing a digital future
Many consumers aren’t looking at the changes they are making as temporary. In fact, 31% of respondents said they would continue to use mobile wallets and contactless payment options rather than cash and checks, even after the pandemic ends.
In fact, a large segment of shoppers are looking for ways to minimize contact when exchanging money. For example, 40% of respondents said they will do more shopping online than in stores in the future. On top of that, 38% said they would take food out or use food delivery services more often than before the pandemic. With both of those methods, consumers would likely be able to pay in advance using a mobile app or by providing their payment information over the phone.
Some consumers have increasingly turned to mobile apps to order groceries and other essential services as they seek to avoid human contact as much as possible.
Some experts believe these changes could mark a turning point in the way we interact with money.
“Once consumers begin using convenient new digital services, few tend to go back to their old habits, so we expect this to be the new normal going forward,” FIS Loyalty General Manager Mladen Vladic said in a statement. “We are now further along on our path towards becoming a cashless society in the U.S., and perhaps looking at the end of the paper check altogether.”
Methodology: FIS surveyed 1,030 consumers on April 3-5. Polling was conducted through the Ipsos KnowledgePanel Omnibus study, a research panel built from a representative sample across the United States. The FIS survey didn’t include definitions for the various generations, but many pollsters use cutoffs similar to those of Pew Research, which describes Generation Z as those aged 18-23, millennials as those 24-39, Generation X as covering the ages 40-55, and baby boomers as 56-74.