How the COVID-19 Pandemic Has Altered the Way We Use Money
The coronavirus pandemic has significantly changed the world. And of these changes is the way we create, distribute, and spend money is permanently changed.
Digital Expert from DAR, Karina Wolfin says: “Typically, when polled consumers overestimate how permanent behaviour shifts will be. With that said, the percentage of consumers reporting behavioural before changes have increased every week since COVID-19 became a threat. Because of this, financial institutions must ensure that they are prepared to adjust to these changes.”
How We Make Payments and Interact with Banks
Social distancing restrictions have become less severe, and many financial institutions are reopening. However, even though consumers have the opportunity to go to branches again, they won’t necessarily take advantage of that. The spread of COVID-19 may have slowed since May, but the threat is still present. Because of this, people are reluctant to return to using cash, checks, and point-of-sale systems that require touch.
According to researchers:
- Approximately 45% of all respondents have made permanent changes to how they bank because of the coronavirus.
- 31% stated that they will be more likely to use mobile and online banking going forward.
- 45% have utilised a mobile wallet platform over the past 30 days.
- People will be shifting from checks and cash.
- Also, 40% of respondents stated that going forward they will be more likely to shop online rather than visit a store.
Many banks have chosen to shut down their lobbies, and numerous banking branches have closed. Beyond that, many people have begun working from home. This puts consumers in a position that forces them to alter the way they bank.
In fact, data shows that 45% of people stated that they had permanently altered the way they bank because of the coronavirus.
Some people have started using the drive-thru services rather than going inside the branch. Others have shifted to mobile or online banking and have become more reliant on call centres.
Before the coronavirus, people were already shifting away from checks and cash and becoming more reliant on digital payments. However, since the pandemic hit, the shift has been much sharper. The number of consumers choosing to shop online is increasing rapidly, with check and cash usage declining at the same time. POS usage has also reduced.
Consumers prefer to avoid coming into contact with keypads when possible, and they also want to avoid cash. This means mobile wallets and contactless payments are becoming more common. Based on research, it is unlikely that COVID-19 can be transmitted through cash or coins. However, consumers are still anxious about physical currency, which has pushed more people towards contactless payment solutions.
The coronavirus has dramatically increased the popularity of mobile wallets. According to research conducted between April 3rd and 5th, approximately 51% of surveyed consumers have utilised PayPal over the last 30 days. Over the same window of time, 16% of surveyed consumers used Zelle. 20% used Apple Pay and 28% used Venmo, with younger consumers being more likely to use this platform.
Consumers are shifting towards cashless transactions, and businesses are too. Toll booths, retailers, and restaurants are all offering contactless transactions. This is something the World Health Organisation has recommended as well.
Adjusting to These Changes
All industries have felt the impact of this digital shift. COVID-19 has greatly changed the way people interact with each other. It will be a long time before businesses can return to operating the way they did before the coronavirus. Because of this, people are beginning to form new habits. The majority of people that have shifted to digital payments and banking have stated that they do not plan to return to their old habits after the pandemic ends.
Because of this, now is an excellent time for all financial institutions to invest in digital banking. Physical branches can be reduced. New technology can be capitalised on and digital payments can be encouraged. Financial institutions may want to work with tech firms that can help them with the transition process.
Post solely for the use of teltech.net.au By Isaiah Mason