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What You Need to Know About the Evolution of Cash Usage in a Post-Pandemic Future 

November 16, 2021

For decades, experts have speculated that the next new payment method, from credit cards to cryptocurrency, would replace cash completely. But even during a global pandemic that saw in-person payments plummet in just a few weeks, cash has remained a reliable, accessible means of payment that consumers trust. 

Since the World Health Organization (WHO) declared the COVID-19 outbreak a global pandemic on March 11, 2020, we have seen some significant changes in how consumers use, save and value cash. As reported by the Federal Reserve in its 2021 Findings from the Diary of Consumer Payment Choice, cash use made up 19 percent of all payments, down seven points from before the COVID-19 pandemic. However, they also found that the average value of cash held in a consumer’s pocket, purse or wallet increased to $74, up $20 from 2019. 

Is it safe to use cash? 

In the early days of the COVID-19 pandemic, the World Health Organization released a statement recommending that people should wash their hands after handling money, especially before eating or handling food, as a good hygiene practice. However, among the growing panic about a virus people knew very little about, this suggestion was misrepresented by the media as a statement that the virus that causes COVID-19 could survive on banknotes for days. 

Since that misreported comment, central banks and many other cash advocates have funded research, released reports, and launched campaigns to reassure the public that cash is safe. LendEDU, an online marketplace for financial products, tested high-contact surfaces, like door handles, park benches, public restrooms, credit cards and cash, and found that both cash and coins carry far less bacteria than credit cards. This aligns with other studies that have found that the virus that causes COVID-19 can live on plastic for up to 70 hours, compared with 25 hours for cardboard. 

How did COVID-19 affect cash payments? 

Although studies showed that the coronavirus cannot survive long on banknotes, which are typically composed of porous materials like cotton and linen, this misinformation persisted for months, boosted by the impact of shelter-in-place orders and strict social distancing measures. These health and safety measures, which were designed to minimize contact between people, also resulted in fewer in-person payments across all payment categories, including debit and credit cards. 

Even with widespread misinformation about the safety of using cash and increased safety measures that impacted in-person payments, the Federal Reserve Bank of San Francisco reported that 70 percent of survey respondents did not avoid using cash during the coronavirus pandemic (as of May 2020). In fact, while in-person payments decreased since March 2020, 59 percent of people still used cash, maintaining a similar rate of cash usage in person compared to before the pandemic. 

Throughout the coronavirus pandemic, fewer people have made in-person payments, remaining well below pre-pandemic levels. In a more complete survey of consumer cash usage throughout 2020, the Fed also found that the share of individuals making in-person payments and using cash in April 2021 declined only slightly compared to August 2020. 

The so-called “coin shortage” has also impacted consumer behavior. Although the U.S. Mint did temporarily limit coin production in June 2020 to ensure that coin was fairly distributed to depository institutions like banks, credit unions and cash-in-transit companies, the impact on the coin supply chain has been more accurately dubbed a “coin circulation challenge,” caused by the COVID-19 pandemic. 

According to the U.S. Coin Task Force, there was already over $48 billion in coin already in circulation in May 2021. The issue behind the coin circulation challenge is that fewer in-person payments mean fewer coins used in transactions, so merchants can’t deposit coins with their banking or CIT partners. The share of individuals redeeming or depositing coins remains low while retailers and financial institutions can only circulate the coins they have. Prior to the pandemic, the Federal Reserve received 7-8 coins back in deposits for every 10 coins it paid out in orders. Since the pandemic, the Federal Reserve continues to only receive 3-4 coins back for every 10 coins it pays out. 

In an episode of the podcast The Cash News, Rod Diplock, CEO of the cash security solutions provider CONTROLTEK, remarked that although COVID-19 has had a huge effect on the global supply chain, his company was still seeing the same amount of cash security bags being shipped. However, the sizes and types of bags being sold have changed. For example, if a customer wanted to order the same amount of cash but with more small denomination bills, then the cash order would be larger. 

How is consumer behavior changing? 

We saw the COVID-19 pandemic increase the use of online shopping and mobile apps to make purchases, particularly for grocery and convenience stores, restaurants and bars, fast food locations and coffee shops and general merchandise retailers. In a study from May 2021, the Fed found that the average number of payments for each merchant type decreased while the average number of not-in-person payments increased, indicating an increased level of substitution away from in-person toward not-in-person payments. 

The total amount of money spent increased substantially across the above retailer categories, with the average amount spent for not-in-person, non-bill payments throughout October increasing from $265 in 2019 to $326 in 2020. These changes not only show that consumers increased not-in-person spending, but that they were also willing to expand the types of goods and services purchased online when conducting not-in-person payments. 

It is clear that since 2020, people have started using money differently, whether they’re opting for contactless payment options like tap-to-pay cards and digital wallets or holding more store of value cash. However, the actual circulation of cash has declined. While there is no doubt that consumer behavior is changing and has been accelerated by the pandemic, it would be short-minded to assume that these changes will dictate the future of cash usage. 

As mentioned earlier, the Fed reported that the average daily cash holding has increased by $20 across all age groups since 2019. The study noted that the increases in average holdings may be explained by the continued uncertainty regarding the pandemic, rather than being highly correlated to economic impact payments and federal supplemental unemployment insurance benefits. 


As we’ve said countless times, particularly over the past year and a half, we are unlikely to see cash become obsolete within our lifetime. However, it would also be inaccurate to say that cash usage has remained unchanged in recent years, particularly after a global pandemic that has impacted everything from politics and healthcare to the economy and the global supply chain. 

While we continue to see developments in how consumers make payments and how businesses adjust to meet consumer demand, we are sure to see cash remain a stable, reliable payment option despite the increased digitization of the payment landscape.