'We are cashless': Cash is out and electronic payments are in

Signs shown at retail stores.
COVID-19 has accelerated use and preference for electronic payments. Photo credit: Newshub.

The old adage 'cash gets the best deal' may no longer be true, as it's popularity and use is dwindling in favour of electronic methods.

Paying with cash helps people track spending. But in the COVID-19 environment, handling bills and coins increases the risk of the virus spreading. Accepting cash requires businesses to keep change and bank the money.

At women's activewear brand Lorna Jane, a sign displayed inside the Ponsonby store says: 'We are cashless'.

Among the customer benefits cited on the sign are saving money, no rounding, faster service, increased security and trackable purchase history.

"We were cashless pre-COVID: quite a few stores around here are. It's better for the environment… we can't even take cash as we have no till," a staff member told Newshub.

Wild Wheat operations manager Sarah Fearnside believes people should be able to buy essential items, including a loaf of bread, from pocket change. Shops accept cash, but following contactless payments during lockdown, the 'new normal' is now preferred.

"Staff are reluctant to handle cash due to fear of COVID-19," she said.

"Pre-COVID, the percentage of overall takings [was] around 15-18 percent of weekly turnover… we [now] receive half the number of cash payments than we did," Fearnside added. 

Banks could do more to improve systems for banking cash and ordering change, she says. Although electronic payments are preferred, following the end of the PayWave fee waiver in June, increased use has cost more in merchant fees. 

Retail New Zealand chief executive Greg Harford, said although some customers prefer cash, many find it inconvenient.  

"The vast majority of retailers already accept electronic payments through EFTPOS, but not all accept credit cards or contactless debit cards because of the bank charges associated with them," Harford said.  

A Reserve Bank spokesperson confirmed that as long as retailers let customers know before they shop or use services, there's no legal requirement to accept cash. However, those offering essential services should make provision for people who can only pay cash. 

A global payments report from Worldpay, a provider of payment processing and technology, indicates that by 2023, cash will be used for less than one in five transactions. Use of digital and mobile wallets, using apps such as Apple Pay and Google Pay is expected to keep growing. 

Worldpay general manager global eCommerce Phil Pomford, said before the pandemic started, the number of Kiwis using cash was already in steep decline.

"With concerns around safety and hygiene in handling cash, this trend has accelerated," he said.