Japanese avoid cash payments in response to the COVID-19

Japanese are expected to avoid cash and POS terminals because of the risk of catching the virus

cash share

Japanese avoid cash payments in response to the COVID-19. Source: pixabay.com

According to GlobalData, the cash share in the overall payment transaction volume in Japan is set to drop in 5 years, since banknotes can transfer coronavirus.

The report found that the pandemic is likely to push e-payments transaction value and volume among consumers and merchants. The reason for that is the shift from cash to avoid exposure to disease vectors.

The data revealed that while the number of card payments will increase by 2.6%, there will be a decline of -5.5% in ATM cash withdrawals this year.

As Japan imposed state of emergency involving social distancing and other restrictions until 6 May 2020, domestic spending will continue to remain weak with the deterioration in transaction volume during April-May. Payments sector is expected to revive towards end of Q2 2020 once the restrictions are completely lifted. Consumers are expected to defer on some of the high-value purchases by few months at least till they have better view of the situation
Ravi Sharma, Lead Banking and Payments Analyst at GlobalData

We’ve reported that consumer behavior is expected to accelerate the shift from cash to e-payments. This way, online, cashless and mobile transactions would see long-term growth since people change their spending behavior to avoid contact with the disease.

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