Ask Mary: COVID-19’s Impact on Payments Usage

Dear Mary: How has COVID-19 impacted the way people use payments?

That’s a great question and I will answer it with another: when is the last time you made a cash payment? With the rapid spread of the novel coronavirus in late February and early March, cash—and even any sort of in-person transactions—suddenly became difficult, if not impossible, due to social distancing measures that shuttered businesses.

As economies around the United States begin to restart, many businesses are shying away from accepting cash in favor of contactless or mobile payments that may help limit interactions that could spread the virus. We do not yet know the full long-term impacts of the coronavirus on payments, but it is important to look at what has happened in the past few weeks to see how swiftly payment behaviors changed for a glimpse at what the future of payments holds.

Right now, we know that interest in and usage of contactless and mobile payments are surging around the United States! A few weeks ago, Mastercard released its first-quarter results indicating card-not-present and contactless payments surged by 40%. PayPal also reported that it added 20.2 million new accounts, bringing the company’s total volume of accounts to over 300 million. Venmo, a P2P platform owned by PayPal, also saw increased traffic—users transacted approximately $31 billion just in the first three months of the year.

People want more than just digital payments, though—they also want instant payments. The Clearing House recently announced an expansion of its RTP® Network to include new partners, like Paychex, that will give more employers greater flexibility to deliver real-time payments and support the growth of on-demand services, like delivery or shared apps.

All these facts reveal that more Americans, including many who likely had limited experience with mobile or contactless payments before COVID-19 hit, are seeking electronic payment options to help them meet their needs. Although your financial institution may not have started the year with plans to enhance or expand your payment technologies or products, you probably now find your account holders expecting better digital payment experiences and services.

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