COVID-19 Is Changing Consumer Behavior At The Point-Of-Sale

As shelter-in-place orders spread across the US in mid-March, cash was already coming under fire as a potential vehicle for spreading COVID-19. Media articles and nightly news reports quickly began targeting the unsanitary aspects of physical currency, and many merchants started affixing signs to their storefronts or checkouts encouraging the use of cards, and in some cases outright banning cash. 

These developments, paired with growing concerns about physical contact and contagions, have helped drive a noticeable decline in cash utilization, according to a Q3 2020 US consumer survey fielded by 451 Research, which is part of S&P Global Market Intelligence. The survey revealed that more than two in five consumers are using cash less often since the COVID-19 outbreak started. The decline is strongest for respondents with a household income above $150,000 and those belonging to Gen X (38-53 years old), where 64% and 54% have decreased their usage, respectively.

Cash use has suffered as consumers have consciously and subconsciously looked to adhere to three key priorities while in-store:

  1. Limit what they’re coming into contact with (e.g., point of sale terminals, cash).
  2. Minimize time spent in close proximity to other people (e.g., cashiers).
  3. Avoid events that increase overall shopping time (e.g., lines, making change).

Contactless payments help address each of these concerns at checkout by enabling a more efficient and hygienic payment experience. This is important because, at least in the US, contactless has long been characterized as a solution in search of a problem.

Contactless payment adoption and usage is increasing

451’s survey has revealed two key contactless trends that have emerged from the pandemic. The first is new user activation. Many consumers that never saw a reason to use contactless before tried it for the first time, presumably given the hygienic and social-distancing benefits of tap-to-pay. More than