Consumer Trend 2021: the switch to cashless payments
2 min read
In an ever-evolving world of technological advancements, it is no surprise that multiple payment methods are now accessible from our devices. The COVID-19 pandemic has caused many aspects of our daily lives to turn virtual, and now, cashless payments are increasingly popular as consumers look for ways to stay healthy because of their touch-free nature.
The pandemic caused a lot of businesses to accommodate contactless payment options to maintain a safe distance from others and avoid contracting the virus from an interaction where paper money is exchanged. So many people made the switch to cashless payments that the U.S. experienced a coin shortage. The Board of Governors of the Federal Reserve System also attributes the coin shortage of 2020 to business and bank closures that caused disruptions in the supply chain for U.S. coins.
According to Statista, the total transaction value of the Digital Payment segment is projected to reach $5.8 million in 2021. That value is a large increase compared to $4.4 million in 2020. The Digital Payments market segment consists of consumer payments that have been made via the internet or smartphone applications.
Many banks have online virtual banking to make account management easy for customers. These virtual accounts can be attached to applications like Venmo and PayPal to make transactions simple and paperless. These applications act as a middleman between the two people in the exchange, and it is commonly used for peer-to-peer transactions such as paying a friend back. Venmo will take the amount of money necessary out of your own bank account and transfer it to the other party’s account. PayPal works in the same way, but it can also be used to make purchases from online retailers and in some brick-and-mortar stores.
Apple Pay is another form of contactless payment that is commonly accepted at different retailers as well as online. Apple Pay can also be used to send and receive money like Venmo and Paypal. It is accessible via the wallet application on your Apple device, and you can link your credit and debit cards to pay with your smartphone and Apple Watch. To pay in store, you simply hover your device over the pin pad until you receive confirmation that the payment was applied.
Although cash is not going away completely (yet), the convenience of virtual payments makes it hard to resist for many people in a technologically driven society. A technological advancement such as this is even more popular in 2021 as we continue to live through the COVID-19 pandemic, and Consumer $ense predicts that this trend will be here to stay, even post-pandemic.
What do you think: are we on the way to becoming a cashless society? Do you use cashless payment methods? Leave your thoughts below or tweet us @consumersense on Twitter.
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