Cautioned constantly to keep washing their hands to limit the spread of the novel coronavirus, many consumers make the seemingly logical leap that the fewer things they touch in public, the safer they will be. Accordingly, many shoppers have sought to limit their risk when making purchases, avoiding cash transactions that would require them to receive change in return. More people are using credit cards or touchless payment options, leading to various benefits for themselves, retailers, and credit card providers—but also raising some novel concerns for these actors.

Reduced or no contact payment options clearly appeal to shoppers and employees, who are working to limit their social contacts across the board. Cashiers do not need to handle cash; consumers can speed up the checkout process and get back to their self-imposed quarantine that much faster. It also is comparatively easier for stores to clean a single credit card terminal after each transaction, rather than needing to worry about disinfecting the entire cash register.

As a result of these benefits, credit card firms have experienced a surge in use. For example, VISA noted that rates of contactless payments had doubled in the United Kingdom, especially after it lifted purchase limits that constrained the amount people could charge through this payment method. Anecdotal evidence from smaller shops and restaurants indicate similarly vast jumps in credit card purchases, as even those consumers who once insisted on cash reprioritize their payment preferences.

But the increased uses of credit cards also mean increased fees. That’s good news for the credit card providers, not so much for small businesses, which often find the percentage cuts oppressive. As more people demand that retailers take credit card payments, then use them more often, the risk of smaller profits is highly salient for retailers.

For consumers, other concerns emerge. In particular, many low income consumers simply do not have access to sufficient lines of credit to be able to charge everything, or they may not have a credit card at all. Some retailers that experimented previously with cashless operations came under fire, prompting various state and local laws that require retail firms to accept cash in an effort to protect vulnerable populations’ access to market offerings. In addition, contactless payments imply data storage and access considerations that may put people’s private information at risk and increase the threat of data breaches or theft.

The benefits and risk thus create some sort of balance, which each consumer likely defines for him- or herself. Is it preferable to limit the risk of contracting COVID-19 by touching a dollar bill, or is it better to reduce the amount of financial information companies can access?

Discussion Questions:

1. What other costs and considerations might be affecting the trend toward increasing credit card payments?
2. On which side of this balance do you fall: Are you more worried about paying by cash or paying using credit cards or contactless methods, when it comes to protecting yourself?

Source: Liz Alderman, “Our Cash-Free Future Is Getting Closer,” The New York Times, July 6, 2020