One of the greatest challenges of the COVID-19 pandemic has been an economic one: how to keep cash circulating and in the hands of those who need it. Across the globe, there is a gradual migration towards digital currency and self-service devices. However, cash is still the payment method that most people use on a day-to-day basis. Therefore, it is important that cash supplies are available to the broad industry that trusts this method.
Studies show that in times of crisis, the demand for cash increases. The case of Mexico at the beginning of the COVID-19 pandemic is no exception, although there has been a natural reduction in demand as the situation develops. However, some consumers have questioned the safety of cash as a payment method. In addition to this loss of confidence, lockdown measures have led to a lack of cash flow in certain countries. An example of this was the national coin shortage in the United States of America in early 2020.
While the shift to digital currency appears to be accelerating because of what many are calling “the new normal,” it is inadvisable to precipitate this transition without considering the economic impact of currency shortages. Currently, 86% of Mexicans use cash as a payment method . Mexico is not alone in this regard: cash is the most used payment method in the world. These figures are expected to eventually decline due to the rise of digital services and electronic commerce . Still, a gradual transition is necessary to ensure economic stability during these difficult times. Therefore, it will be necessary to build consumer confidence and facilitate access to cash.
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Consumer safety and confidence
One worry that consumers have with regards to cash usage is sanitation standards and the potential spread of microbes. According to a study conducted by the Bank of Mexico, 72% of the population believes that it is possible to contract COVID-19 from contaminated bills or coins. However, these concerns, while reasonable, are largely unfounded. The WHO states that the risk of transmission of the virus through coins and banknotes is extremely low .Additionally, other studies indicate that among the most common payment methods, cash is more hygienic and less likely to carry harmful microorganisms.
Cash not only carries fewer pathogens, but can be obtained via ATM, without the need for face-to-face contact. Some consumers report that interacting with machines seems safer to them. This is because most health agencies state that the primary mode of COVID-19 transmission is direct contact with others . To build this trust, companies must develop reliable sanitation practices for self-service machines, as well as educate consumers on how to use them safely. Thus, to limit the risk of spread of COVID-19, the surfaces of ATMs and other devices must be kept clean, ventilated, and accessible.
The second area in which every business entity must pay particular attention is anticipating consumer demand for cash in order to prevent small-scale shortages from occurring. However, this can be difficult as market needs can change quickly and unexpectedly, especially in times of crisis and uncertainty.
As noted above, during the earliest stages of a crisis, many consumers withdraw large amounts of cash to avoid running out. However, this trend may change as the situation develops. History-based modeling gives companies a blueprint for how to react, but using this data alone is not enough to react to unexpected events. Institutions that do not have a real-time data monitoring system may find it difficult to adapt to these changes, and risk losing income.
In this sense, sophisticated software such as SmartGuard® helps companies anticipate deposit cycles and react quickly to cash outages. SmartGuard® allows administrative teams to perform remote monitoring and receive real-time alerts on the use of your devices. This gives you the ability to view usage statistics and quickly correct errors. By utilizing the technology and data we have at our disposal, businesses can stay ahead of this crisis and keep cash where it belongs: in the hands of the consumers.
Solutions for the future
Despite the hardships we all face while we adapt to this new normal, we have allies to help us preserve our lifestyles, businesses, and economy. At Interlogic®, we create dynamic strategies in response to the demands of the present. Contact us to learn more about how our range of software and hardware solutions can help your business succeed.