The Transformation in the Use of Cash and Digital Payments during the COVID-19 Pandemic

Last month we reviewed the Bank of Canada’s report on the impact of the second wave of COVID-19 on cash usage in Canada. This month we consider a report using data from four countries, the UK, the US, Spain and Mexico, as well as the EU.

Three academics ¹ recently issued a paper based on published research which examined the impact of COVID-19 on the use of cash and digital payments. In particular, they examined whether the pandemic has accelerated the move towards a cashless society, concluding that there is insufficient evidence to indicate a structural shift.

They note that payments have been changing since the 1960’s so that today physical fiat money issued by central banks coexists with digital money, with the amount of the latter increasing at higher rates. This change in the monetary and media systems has led many scholars to question whether at some point society will live in a cashless society.