Digital Payments

Square Sees Dramatic Hike In Cashless Transactions

Square app

The COVID-19 pandemic is fueling contactless payments as one financial mobile app company says without a public health crisis, it would have taken three years to see such a reduction in the use of cash.

Square Inc., the San Francisco-based mobile payment company, said Tuesday (Sept. 15) that its share of cash transactions has fallen to one-third since the first of August, down from nearly 41 percent compared to the same time last year, reported.

In February, 5.4 percent of Square sellers were cashless. But that was before the world was engulfed in a pandemic. By April, as much of the world’s economy saw shelter-in-place mandates, that number jumped up to 23 percent. By August, as the world began to reopen, the number of Square sellers with a cashless business platform was showing signs of stabilizing at 13.4 percent.

Still, there has been a dramatic increase in cashless adoption rates compared to pre-pandemic.

“These new findings show a significant and stabilizing increase in cashless adoption rates compared to pre-pandemic, with business owners increasingly reliant upon contactless and online payments and consumers utilizing those alternatives,” said Felipe Chacon, Square’s economist, in a statement. “This signals that COVID-19 has already had what will likely be a lasting impact on consumer behavior.”

Square’s shares have doubled since May, according to Bloomberg, and at $55 billion, the company’s market capitalization is eclipsing that of many traditional banks.

Square’s stock has been on the rise since the start of the year. On Dec. 31, the stock closed at $62.56. At the opening Tuesday (Sept. 15), it was $146.13, a more than 133 percent hike.

Last month, Square reported it had $1.92 billion in net revenue for the second quarter. That’s a 64 percent increase compared to the same period one year ago.

The September Small and Medium Business Reopening Report by PYMNTS and American Express found digital commerce is one of the only safe revenue streams available to retailers.

As a result, small and medium-sized businesses (SMBs) are embarking on eCommerce initiatives in record numbers.

PYMNTS study found 72 percent of SMBs have improved their digital capabilities amid the pandemic, with 49 percent adding or upgrading their existing online order-ahead capabilities and 50 percent revamping their eCommerce offerings. Mobile wallet and digital invoicing functionalities have also grown popular as a means to limiting the risk of infection from physical and in-person payments.



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.