COVID-19, Cash, and the Future of Payments
The Covid-19 pandemic has led to unprecedented public concerns about viral transmission via cash. Central banks report a large increase in queries from the media on the safety of using cash. The number of internet searches pertaining to both “cash” and “virus” is at record highs. While search interest in these terms also rose in several East Asian and European countries during the 2009–10 H1N1 pandemic, those statistics are dwarfed by the extent of recent searches.
This note shares several experiences of central banks around the world in their effort to bolster trust in cash and guarantee universal acceptance. Key takeaways from the study are:
- The Covid-19 pandemic has fanned public concerns that the coronavirus could be transmitted by cash.
- Scientific evidence suggests that the probability of transmission via banknotes is low when compared with other frequently-touched objects, such as credit card terminals or PIN pads.
- To bolster trust in cash, central banks are actively communicating, urging continued acceptance of cash and, in some instances, sterilizing or quarantining banknotes. Some encourage contactless payments.
- Looking ahead, developments could speed up the shift toward digital payments. This could open a divide in access to payments instruments, which could negatively impact unbanked and older consumers. The pandemic may amplify calls to defend the role of cash - but also calls for central bank digital currencies.