Square Data Estimates Decline in U.S. Cash Usage This Year Alone Would Have Taken Three Years Without the Pandemic
Square, Inc. (SQ) released a new report that highlights how the onset of COVID-19 has affected global commerce and payments behavior. This is the third installment of Square’s Making Change series, which examines whether or not we’re headed towards a cashless society.
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“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. This signals that COVID-19 has already had what will likely be a lasting impact on consumer behavior.”
In February 2020, just 5.4% of Square sellers across the US were cashless*. By April 2020, amidst the height of shelter-in-place mandates, that number jumped up to 23.2%. By August 2020, as the world slowly began to reopen, the number of Square sellers with a cashless business model was showing signs of stabilizing at 13.4%. That said, there has still been a remarkable increase in cashless adoption rates compared to pre-pandemic.
Square Economist, Felipe Chacon explains, “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. This signals that COVID-19 has already had what will likely be a lasting impact on consumer behavior.”
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Among payments transacted at US Square sellers since February 2020, the share of cash transactions decreased from 37% in February to 33% in April, and held stable at 33% through the end of August. By comparison, during that same time period in 2019, the share of cash transactions increased slightly: from 39.9% in February to 40.0% in August.
When comparing the share of cash transactions via Square in 2019 to 2020, the year-over-year change shows a 7.3 percentage point drop from 40.6% in 2019 to 33.3% as of August 1, 2020. If we use 2019 as a baseline indicator, we estimate this one-year shift would have taken more than three years without the pandemic.
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