Cash remains out of favour for Irish consumers

Shift to cashless: Cash payments declined strongly as a result of the pandemic, with post-lockdown cash volumes down 30pc on pre-lockdown figures.

Research from fintech company N26 has shown that consumer spending in Ireland has risen by 32 per cent (pc) since the Covid-19 lockdown restrictions were lifted in June.

N26 analysed spending data for its Irish customer base across a range of consumer categories to see how consumers changed their interaction with cash, card and online payments methods over the seven-month period of January to July.

The data revealed how the pandemic has accelerated the move towards a more cashless society.

Cash payments have dropped considerably – down 30pc on pre-lockdown figures. There was also, unsurprisingly, a huge drop in the number of ATM transactions (-49pc) during lockdown, and levels are still considerably below pre-lockdown levels, in total -42pc post lockdown.

The number of card transactions has increased by 2.7pc on pre-lockdown figures, bringing the share of payments made by card from 54pc to 59pc.

“In terms of cashless payments, this year has seen a global acceleration towards cashless payments”

Despite retail stores reopening across the country, online spending has increased by 7pc on the pre-lockdown figure.

In terms of generational split, 35-44-year olds are shopping more online now versus pre-lockdown (+5pc). Moreover, there was a 17pc increase in the number of eCommerce transactions among baby boomers during the lockdown, compared to before with many becoming more accustomed to this commerce channel due to lockdown restrictions.

“Post lockdown, there are some encouraging signs that consumers are building confidence in N26 for every day spending and money management,” says Sarunas Legeckas, country manager for Ireland at N26.

He continued: “Irish consumers seem to feel comfortable with the ease of use and in-app experience which is reflected in how they are spending their money. In terms of cashless payments, this year has seen a global acceleration towards cashless payments. It’s interesting to see that with stores and restaurants reopened, while we’ve started spending more money again, Irish consumers are vastly favouring card over cash.

“Another exciting trend we have noticed is the persistent strength in ecommerce, which saw the least damage during lockdown and that people are still shopping so much online despite the reopening of physical stores.”

N26 has also released a ranking of the top merchants favoured by Irish consumers over the same period.

“The outbreak has seen a change in habits, but it remains to be seen if we will ever lose our love affair with cash”

The analysis shows that pre-lockdown, Lidl ranked as Ireland’s ‘top merchant’, followed by Amazon and Supervalu. This changed during and post lockdown, with Amazon taking the number one spot with Lidl falling to second, while Supervalu consistently ranked third before and after the Covid-19 lockdown.  

Earlier this year, Lorna Larkin, senior manager for Merchant Services and ATMs at Bank of Ireland and relationship manager for BOI Payment Acceptance (BOIPA), claimed Ireland would see a significant drop in cash usage as a result of the Covid-19 outbreak.

Speaking in April, Ms Larkin said; “The outbreak has seen a change in habits, but it remains to be seen if we will ever lose our love affair with cash. For certain, people will start to realise the benefits of contactless for convenience, especially people who work behind the counter who don’t have to be handling cash and ensuring social distancing can be observed.

Another obvious benefit for the business owner is that they don’t have to be worrying about reconciliations at the end of the day or to carry a cash float because it is all electronic. Also, there are obvious security benefits.”

By Stephen Larkin

Published: 11 August, 2020