COVID-19 and the Global Acceleration to A Cashless Society

The pandemic has changed everything.

As COVID-19 forced the world to hit the pause button, many facets of daily life slowed down.

A revolution hit, making people rethink their routines and adapt to the “new normal.”

Naturally, this led to a slowdown in the world economy, and the use of cash within the global society is now under the microscope.

Personally speaking, I can’t remember the last time I held a currency note between my fingers or paid for petty bills with coins at the local supermarket store.

Digital wallets and UPI payments have become my best friends.

Even when I did step out of the house and had to use my debit card for a point of sale transaction, it took me a while to remember my own PIN!

With faces masked and wary hands, everyone is exercising the utmost caution.

The new strain of COVID and the expected resurgence of the pandemic will only amplify these practices, forcing people to change up their ways.

Keep reading to find out how the race to a cashless society has accelerated and what you can do to prepare.

Pandemics and Payments

Several countries and their citizens have thought twice about using cash over the past year, wanting to avoid physical contact and reduce the risk of transmission.

For example, the Chinese government took extreme measures in February by disinfecting and destroying currency notes that were potentially contaminated.

As a result, more and more people have turned to cashless methods of payment.

Think debit cards, mobile wallets, a surge in online banking, and other cashless options.

This is not the first time talk of a cashless society has sprung up.

Sweden, for instance, is expected to become the world’s first cashless country by 2023. COVID-19 has only accelerated this move to cashless further, forcing countries and industries worldwide to consider safer, digital alternatives.

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Strategies to Survive in a Cashless Society

While the world going completely cashless is a long way off, there is certainly no clear timeline for resolving the pandemic.

There are risks of a potential second, even third wave.

In the meantime, the move to cashless methods of payment will dominate several economies.

Here are three strategies on how you can best prepare for this scenario as we go into the new year.

#1. Leverage Contactless Payment Methods

If you haven’t already, assess your financial health and set up contactless methods of payment. These include a variety of digital payment methods, including:

• Getting a debit/credit card
• Setting up net banking
• Signing up with payment wallets
• UPI payments
• Mobile banking

In a world ravaged by the pandemic and where observing social distancing has become the norm, you cannot survive without one or two of these digital payment methods.

As you adapt to using them, you’ll also realize how much more convenient it is to go cashless.

It saves you the time of standing in ATMs to withdraw hard cash and is much easier to work with.

#2. Make Smart Investments

With the economy in a sensitive place, maintaining financial health has become a priority for nearly everyone.

It’s important to manage your money smartly in this period, and one great way to curb risk is by investing in the right instruments.

Talk to your financial planner. If you don’t have one, read up on safe and low-risk investment schemes (think: fixed deposits and government bonds).

Identify the percentage of your monthly income you are willing to put aside to invest in these instruments.

Even something as simple as opening a savings account with a high-interest offering bank can help in the long run.

You want to be conscious of your spending during the pandemic while balancing consumption with both active and passive sources of income.

#3. Save, Save, Save

One of the worst-case scenarios you can face during a global pandemic is an empty bank account.

A big fat zero glaring at you from your online banking screen will not only cause panic; it will be disastrous.

While going bankrupt is a far-fetched scenario for most, you never know what kind of emergency may strike.

Combine your investment strategy with a savings-based routine as well.

Set aside a small portion of your income and leave it untouched, earmarking it as a contingency fund.

Over time, this fund will grow and be accessible to you if any such emergency should arise.

Go Cashless Today

As habits change and evolve into new patterns, they tend to stick.

While the argument of a hundred percent cashless society is highly debatable, it cannot be denied that COVID-19 has encouraged the transition to digital payments and contactless transfers of money.

The ever-growing digital payment infrastructure will force businesses and their consumers to adapt to the new norm. Even after the pandemic ends, the aftershock of its impact will be long felt by the global economy.

Be smart, be safe, and embrace the move to a cashless society ahead of 2021.

About the author: Beatrice Manuel is a freelance writer for hire specializing in finance and digital marketing. She helps brands fulfill their vision through words by producing sparkling content pieces that convert. When she isn’t helping her clients win readers, you’ll find her working on her next novel and posting on her literary blog.