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