Mobile payments: Will COVID-19 mark the end of cash?

Por Veritran - 13 de Maio de 2020 - Categoria : Sem categoria

Given the heavy demand for remote financial solutions amid the global pandemic, there is much talk about the potential for cash to fade out of use.

Will cash disappear as a payment method? It is a question that has many answers, and each with a lot of nuances.

Long before the coronavirus hit, physical money was already in being digitized. In fact, it is a practice that began with plastic cards in the mid-1990s and then gradually expanded into other electronic payments.

Since then, the internet of things, technological development, advancement in high-security encryption and other factors have led the digital payments ecosystem to be mature enough that we can now question the continued validity of cash.

"In Latin America there is a greater understanding that we must go towards a digital payment model, and that means that countries have to make decisions to allow payments to move across the entire ecosystem, so that all members can participate," says Marcelo Fondacaro, COO of VeriTran.


The COVID-19 pandemic is emerging as a reason to continue betting on the shift towards mobile payments – now, the move has the additional backing of the need for distant, ‘clean’ ways to pay to help flatten the curve of contagion globally.

Certainly, traditional payments that involve physical contact are now considered a risk to public health. That goes not just for cash, but also for cards, an area where experts expect a shift in the short term towards mobile payments.

It is no surprise that since stay-at-home orders were rolled out, there has been an increase in banks advertising their digital solutions. Digital payment, electronic wallets and more services are on the rise.

We have the technology in our hands already: the smartphone has taken center stage as an immediate, simple and secure mobile banking and digital payments channel. And while mobile banking is being rapidly adopted, mobile payments are not yet fully accepted by much of the population.

Mobile payment methods have passed the challenge of social distancing and offer a practical solution to making purchases in the crisis.


Governments around the world have been rolling out policies to counter the global economic paralysis that is hitting a wide range of market sectors. Still, none of the incentives aims specifically at moderating people’s use of cash.

The coronavirus crisis has put brought transformation in the financial system, as well as transformation of the payment system specifically, to the forefront of priorities. Yet it’s fair to think that, once the crisis is over and the pandemic’s massive push towards contactless payments fades, the move to digital payments could also wane.

"The first thing to build is a strong ecosystem where all parties can participate, a sound political agreement so that the distribution of revenues is reasonable, a fair tax system and, above all, a reduction in merchant acquirer fees, which are extremely high," says Fondacaro.

We should remember that the move towards digital payments was already being spurred ahead by a number of factors, well before the pandemic arrived. These included efforts to reduce the informal economy and to open new financial markets.

So, is it still too early to talk about the end of cash?

Probably. But it is also accurate to say that we are facing a panorama of imminent – albeit gradual – transformation. That change is not only the responsibility of businesses and financial institutions but also of governments to introduce policies that safeguard and foster a mobile payments ecosystem in order to provide a flexible, pragmatic means of paying, in times of crisis or not.

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