Over the last decade, our payment habits have been changing along with the numerous tech innovations and a gradual shift into complete digitalisation. But within the last year, catalysed by the pandemic, there has been an exponential shift in how we make payments. Whereas cash was once king, COVID has all but killed it off.
In the pre-pandemic days, we might have paid for the occasional meal or shopping via our contactless cards but most of us still carried cash with us. Today, however, a growing number of people have gone completely cashless. But why?
How the pandemic has changed our payment habits
A survey of 8,000 individuals from across the world conducted by the PaySafe payments platform found that a staggering 86% of consumers changed their payment habits as a direct result of the pandemic. Of course, a major reason for this shift is that people have been unable to physically visit retail stores for the last 16 months but this is a change that has been on the cards for years now.
The main thing that the pandemic has done is make people more aware of their payment options. In the months before the pandemic, the only people who talked about and used things such as digital wallets and cryptocurrencies were those who were already incredibly tech literate. In the UK, 71% of online shoppers still use their debit cards to make most purchases but in continental Europe, the digital wallet (think of Apple Pay, for example) is becoming a far more popular option.
Today, however, the necessity of turning to online channels has meant more people than ever before know exactly what these things are and are more likely to use them as a result. COVID-19 has been a major accelerator of alternative payment adoption and more merchants of all sizes are starting to wake up to the benefits.
How technology has changed traditional payments
Even as recently as a few decades ago, all smaller payments were typically made by cash. It was only the big-ticket items that we whipped out the credit cards for. The convenience of platforms such as PayPal and the flexibility of prepaid cards, not to mention contactless payments, mean that card payments are now the rule rather than the exception.
How long before we ditch the cards completely and all of our payments are made directly from the digital wallets on our phones? Or our wearable smart watches? Or our ocular implants? It might sound far-fetched when you stop to consider it but so did the world we live in now 20 years ago.
Personal finance technology is evolving faster and the way we shop, pay and get paid is going to continue to evolve in parallel. You can either get on board with that or be left behind.