September 15, 2020
September 15, 2020
Square Data Estimates Decline in U.S. Cash Usage This Year Alone Would Have Taken Three Years Without the Pandemic
San Francisco – Today, Square, Inc. (SQ) released a new report that highlights how the onset of COVID-19 has affected global commerce and payments behavior. This is the third installment of Square’s Making Change series, which examines whether or not we’re headed towards a cashless society.
In February 2020, just 5.4% of Square sellers across the US were cashless*. By April 2020, amidst the height of shelter-in-place mandates, that number jumped up to 23.2%. By August 2020, as the world slowly began to reopen, the number of Square sellers with a cashless business model was showing signs of stabilizing at 13.4%. That said, there has still been a remarkable increase in cashless adoption rates compared to pre-pandemic.
Square Economist, Felipe Chacon explains, “These new findings show a significant and stabilizing increase in cashless adoption rates compared to pre-pandemic, with business owners increasingly reliant upon contactless and online payments and consumers utilizing those alternatives. This signals that COVID-19 has already had what will likely be a lasting impact on consumer behavior.”
Among payments transacted at US Square sellers since February 2020, the share of cash transactions decreased from 37% in February to 33% in April, and held stable at 33% through the end of August. By comparison, during that same time period in 2019, the share of cash transactions increased slightly: from 39.9% in February to 40.0% in August.
When comparing the share of cash transactions via Square in 2019 to 2020, the year-over-year change shows a 7.3 percentage point drop from 40.6% in 2019 to 33.3% as of August 1, 2020. If we use 2019 as a baseline indicator, we estimate this one-year shift would have taken more than three years without the pandemic.
Increasing availability and usage of online and contactless payments are also contributing to the decrease in cash usage over the last year:
From February through August 2020, there was a 13.2 percentage point increase in the share of Square sellers accepting online payments. By August, more than 40% of all Square sellers were accepting online payments.
From February through August 2020, there was a 6.6 percentage point increase in the share of Square sellers accepting contactless payments. By August, more than 7 in 10 Square sellers were accepting contactless payments.
For the purposes of this report, Square qualifies any business accepting more than 95% of their sales via cashless means (in-person credit or debit card payments, online payments, contactless payments) as a cashless business.
Square, Inc. changed its name to Block, Inc. on December 1, 2021.
Block, Inc. (NYSE: SQ) is a global technology company with a focus on financial services. Made up of Square, Cash App, Spiral, TIDAL, and TBD, we build tools to help more people access the economy. Square helps sellers run and grow their businesses with its integrated ecosystem of commerce solutions, business software, and banking services. With Cash App, anyone can easily send, spend, or invest their money in stocks or Bitcoin. Spiral builds and funds free, open-source Bitcoin projects. Artists use TIDAL to help them succeed as entrepreneurs and connect more deeply with fans. TBD is building an open developer platform to make it easier to access Bitcoin and other blockchain technologies without having to go through an institution.