Living Cashless: The New Normal Amid A Pandemic

We all know that money changes hands frequently and can pick up all sorts of bacteria and viruses, and during the Covid pandemic the fear of viral transmission is exacerbated.  We can take the UK as an example: within days of shops closing, “UK’s cash usage halved… and during lockdown, ATM cash withdrawals were down about 60%”, stated Natalie Ceeney of the Access to Cash Review.  The Covid pandemic pushed anyone who could go digital, to go digital promoting contactless payments, online shopping, and online banking.


Even prior to the current pandemic, countries around the globe were planning to become more economically digitised and a cashless structure is naturally part of that longer-term digitalisation strategy.  There are many benefits to a cashless economy such as the reduction of robberies for cash, but also many concerns, starting with cybersecurity.  


In this article we will review examples by some digitally advanced countries and some frontier players who may surprise you!

What is a Cashless Economy?

Common Types of Cashless Payment

Cashless payments, along with the robust digitalisation of security, banking, and retail,  guide society further towards achieving digital advancement. Research published by BCG in 2019 (attach link: illustrates the net benefit and revenue from digital transactions across 100 cities increased each cities’ Gross Domestic Product (GDP) by 3%.


While many governments were already pushing towards digitising their economies,  COVID-19 has accelerated these initiatives. A Mastercard survey showed a clear shift towards contactless payments — especially in Asia Pacific. “The fact that 3 in 4 people intend to keep using tap-and-go payments after the pandemic is a strong sign that consumers see the long-term benefits of having a safer, cleaner way to pay, checking out faster and being more socially responsible”, said Sandeep Malhotra, Executive Vice President, Products & Innovation, Asia Pacific, Mastercard.  The company also revealed a spike of over 40% usage of contactless transactions globally in the first quarter of 2020, when COVID-19 outbreaks were reported globally.


By leveraging cashless transactions, businesses could also save labour hours in handling and counting cash. Visa (attach link: found that while the size of a company acts as an important variable, businesses usually spend 68 hours a week managing cash on average. The hours are even more staggering in Bangkok, Thailand with 89 hours and Tokyo, Japan with 86 hours. These valuable hours could be otherwise spent boosting sales or improving customer experience.

Fighting Crime

With cashless transactions, there is no need to carry and protect large amounts of cash with the fear of being robbed. Payment methods that include PINs, passwords, one-time password (OTP), and biometrics such as voice, face-recognition, retina-scanning, or fingerprint protection play a big role in securing financial transactions. Although a cashless economy does not guarantee a crime-free society, digital transactions provide a transparent record of financial exchange which help prevent cash-based crime including bribery, street and bank robbery, and counterfeiting. The previous Malaysian government for example, assisted small, medium, and large businesses shift to cashless transactions to trace and curb corruption.

Around the World


China is a trailblazer in the cashless economy, dominated by the use of two digital wallets – Alipay, a spin-off from the Alibaba Group, and WeChat Pay, from Tencent Holdings Ltd. The advancement of China’s digital transactions surpassed that of the United States, and rose to be the biggest player in global e-commerce transactions.


iiMedia Research predicts that mobile payment users in China will reach 790 million in 2020, twice the population of the United States.  Facial recognition payment technologies are also rising rapidly. According to PRnewswire, more than 100 million Chinese had adopted this payment method by 2019.


Many countries are looking to make contactless transactions the ‘new normal’ amid the COVID-19 pandemic, but China is pushing the cashless concept even further through its Central Bank’s collaboration with franchisees like McDonald’s, Starbucks, Subway and local businesses, testing transactions through a new currency – the digital yuan.

Hong Kong

It has been more than two decades since the Octopus Card, the first contactless payment card in Hong Kong was launched. Initially introduced for commuters to pay their public transport fare in a quickly and securely, the Octopus Card has extended its tentacles beyond transport and into supermarkets, restaurants, car parks and even to provide entry access to homes, schools, and offices.


Like in many countries, the pandemic has urged people in Hong Kong to substitute paper notes and coins with a contactless payment option. Octopus has seen a spike in usage of 40% at supermarkets and healthcare providers in the first months of 2020.


Similar to China, India leaped from credit card usage straight to mobile payments. Demonstrating that India is rapidly adopting a cashless economy: the approximate number of people who use a credit card is 50 million, compared with 450 million registered users of Paytm, one of India’s most widely used digital wallet platforms.  (This mobile payment processing firm rose to be the highest-valued Indian start-up with a valuation of US$16 billion in 2019 after raising over US$2.2 billion in its funding rounds).  As competition in the mobile payment space intensifies with players such as Google Pay, Amazon Pay, Walmart’s PhonePe joining in the race, Paytm has developed additional functionality such as online booking, digital gold (a form of digital currency backed by gold reserves), and credit services in an effort to differentiate itself from other digital wallets.


Another strong competitor to Paytm is Facebook, which has announced that it intends to launch WhatsApp Pay to empower 60 million businesses in collaboration with Reliance Jio, the biggest telecommunications company in India. In April 2020, Facebook purchased 10% of Reliance Jio’s stake for US$ 5.7 billion. This has increased tension among players in the cashless field as WhatsApp has 400 million users in India and could present Paytm serious competition as India’s predominant mobile payment provider.


Mobile payment has been around in Nigeria for over a decade. M-Pesa was introduced in Kenya and has expanded to a number of countries including  Ghana, Egypt, South Africa, India, Romania, and Albania. At the end of December 2018, the number of users outside Kenya had already reached 13.4 million.  The popularity and rapid adoption of this mobile payment and banking system is that it is SMS-based and therefore does not require a bank account nor a smartphone to conduct transactions.  This makes M-Pesa available to low income users for even very small transactions. 


M-Pesa gained an even greater number of users when the company introduced a fee waiver in light of COVID-19 to encourage people to practice social distancing and to reduce person-to-person contact for physical exchanges of currency.


Singapore announced a “Smart Nation Initiative” in 2014 whose mandate was to make Singapore “an outstanding city… for people to live, work and play in, where the human spirit flourishes”. The government has been making commendable progress towards this vision from three foundational objectives – Digital Government, Digital Economy, and Digital Society. From the objective of the Digital Economy, the government is transitioning Singapore into a cashless society. The government has set aside a 90-million SGD fund for initiatives such as installing cashless payment systems in all kinds of businesses including transforming hawker centres (open-air food complexes with food vendors)


Another initiative taken  in 2017 was the launch of PayNow, a national real-time payment platform which allows individuals, businesses, agencies, and different organisations to complete online transactions by using only mobile numbers or identity card numbers, eliminating the need for bank account numbers. Nine key banks in Singapore participate in PayNow.


A third cashless payment initiative was launched in 2018: a universal unified payment QR code SGQR (Singapore Quick Response Code) that helps simplify payment processes even further, marking a push towards a cashless society.


A movie-worthy cash heist executed in Stockholm in 2009 became a motivator  for the Swedish population to move towards a cashless economy.  The significant drop in robberies and other cash-associated crimes has prompted the population to generally be anti-cash.


Two-thirds of this digitally advanced population use Swish, a mobile payment system launched in 2012 to perform their payment transactions, while various other cards such including credit and debit cards are becoming less popular.


With the increasing normalisation of contactless payments however, some groups of  people such as the retired, disabled, and immigrants from some 3rd world countries struggle to embrace transacting without cash. As such, it is dangerous to slide into a cashless economy without a proper plan, especially if there is a lack of intervention from the government and central bank to manage to potential economic exclusion of these groups.


In Sweden, similar to China, the government has started to experiment with a digital currency – e-krona, to retain and ensure its control over the country’s economy, while ensuring the populace is comfortable with the process of digitisation.

Multiple Payment Alternatives

Are you in an environment that is propelling into the digital economy, but are still a little confused? Let’s look at how the digital economy affects your business from two angles.


Helping marginalised groups acclimatise to the global trend of digital transactions is the joint role of businesses, banks, and technology providers. Some people are resisting the change due to fears about digital fraud, cyber attacks, data exploitation, and cross-selling of data.


Providing different payment options including cash and digital methods at physical stores is a good start to a gradual approach in encouraging local communities to try out new alternatives. Providing alternative payment methods not only helps encourage customers to adapt to new methods, but achieves an improved customer experience and helps you grow your business.

Customer Experience and Marketing

Customer experience is a significant and popular area of digital transformation and making a simple change by providing multiple payment options could easily refine the customer’s journey when transacting with a business. However, if you run a small and medium business (SME), you might want to consider jumping onto this trend as soon as possible. As more and more businesses do the same, having payment options will no longer be a differentiator to stand out from the crowd but a default in the customers’ expectation.


Studies show that people tend to spend more when they pay in forms other than cash.  A study conducted in 2001 demonstrated that  credit card users spent twice as much than those who made purchases with cash.  


Although little research has been done on the relationship between paying with e-wallets versus paying with cash one can speculate that people paying digitally tend to spend more.  “‘People spend significantly more when they’re using a credit card. If we take that idea and extend it to mobile payments, I would expect that to be at least in [the 12 to 18 percent] realm, perhaps a little bit more.” Ross Steinman, Chairman & Associate Professor, Psychology Department, Widener University.


Having customers pay via a digital wallet brings another benefit, other than being quick and easy. It opens another door of opportunity for business owners to engage in effective and immediate personalised marketing opportunities. In WeChat Pay for example, after the customers scan to pay, they receive an instant notification of inviting them to follow the merchants’ social media accounts for updates and discounts. Sometimes, it’s an invite for them to sign up for a membership program and retrieve a coupon. Countless digital wallets such as Malaysia’s Touch ‘n Go eWallet and Boost  are also collaborating with businesses to roll out various kinds of promotions to encourage people take the digitisation leap.

Health and Safety

As we mentioned earlier, because of COVID-19, more people globally are embracing and accelerating the cashless economy by paying with their cards, smartwatches, or mobile phones, reducing physical contact and eliminating the need to touch paper notes, coins or even the chip and PIN machine. This level of hygiene consciousness is likely to be long-term, even post-pandemic.


Contactless payments go hand-in-hand with e-commerce. With lockdowns in place, e-commerce has flourished specifically in grocery shopping, even among the elderly. The Head of Retail Mobile & Digital, Aaron Chiew of United Overseas Bank in Singapore, said that online grocery shopping using its cards grew by 44% in the first three months of this year (2020) compared with the same period a year ago.


These trends show that physical cash is gradually losing traction and this trend is most likely going to turn into a lifestyle, propelling societies into becoming digitalised.

Customer Experience

Customer experience (CX) is not limited to customer service but to every touchpoint a customer has with your company. Offering a seamless and personalised customer experience is a key motivator for digital transformation. Conventional lines between customer interactions online (such as websites) and offline (such as physical stores) are quickly blurring and integration between the two are being made seamless by the use of technology, human touch, and data-driven insights. Customers are expecting more from companies – better service, faster online purchase processes –  and CX is a key differentiator between businesses. Some examples of a poor customer experience include unstructured customer service, the lack of human touch throughout the journey, long wait times, multiple touch points needed to resolve an issue, as well as unhelpful employees. Improving the customer experience can take on a variety of approaches, from streamlining the customer journey for efficiency and enjoyability, to solutions as simple as offering multiple payment options, and providing improved employee training.

What Next?

In this post we have discussed the benefits and effects of going cashless, and provided numerous examples of how different countries are moving forward towards this goal with different initiatives.  As a consumer, it is fascinating to see the growing number of options at your disposal!  If you are a business owner, keep up-to-date, and be open to different payment methods providing them as alternatives to your customers, as appropriate. Drop INVICTA a message to see how you can start improving and refining your digitalisation strategies