The COVID-19 pandemic seems to have accelerated a trend that’s been growing for years: American consumers are increasingly using digital currency instead of cash.

This year, many have stayed home more and spent less money in general. Online shopping has increased and many of those who do go out are using debit and credit cards to avoid passing cash — and potentially disease — back and forth.

While there’s no agreement on whether the novel coronavirus can survive on paper money, Americans are increasingly embracing digital currencies and many businesses are discouraging cash transactions.

One example of the pandemic’s impact on hard cash was the summer’s national coin shortage, which Amanda Averch, director of communications for the Colorado Bankers Association, said was not really a shortage but a disruption in the nation’s coin circulation. Americans used less cash so the flow of coins through banks slowed.

“It was frequently misrepresented as a coin ‘shortage,’ but there was never an inadequate supply of coinage,” Averch said. “Coins were simply moving slower than normal due to business and bank closures, which reduced inventory or availability in some parts of the U.S.”

She said the flow has improved in recent months as businesses reopened and more consumers are paying for purchases in person.

But even as the cash supply is returning to normal, data shows that payment in bills and coins will likely continue to decline.

The 2019 Federal Reserve Payments Study shows the number of non-cash payments — meaning debit, credit card, Automated Clearing House (a computer-based transaction-processing network) and check payments — reached 174.2 billion in 2018 — an increase of 30.6 billion from 2015. Non-cash payments totaled $97.04 trillion in 2018, an increase of $10.25 trillion over the three-year span. 

The FRPS also found that debit and credit card payments grew nearly 9 percent between 2015 and 2018.

Although Americans are increasingly shifting to digital payments, experts say a transition to a completely cashless economy, in which all goods and services are purchased through digital means, isn’t likely to happen any time soon.


Before the pandemic, mobile banking had already become many consumers’ primary touch point with their bank, according to the Federal Deposit Insurance Corporation.

Averch said financial institutions offering Zelle, a payment service that allows users to send and receive payments directly through their online banking accounts and mobile banking apps, have more than doubled in 2020.

In 2019, the number of people using Zelle increased 116 percent, Averch said, and transactions in 2019 increased by 207 percent over the previous year.

Jim Harris, community bank president and commercial team leader for U.S. Bank’s Colorado and Wyoming region, said the pandemic accelerated the shift to digital banking and payments.

“The trend has gotten more steep, in terms of the rate of change and people using more digital vehicles for transacting banking business,” Harris said. “Less and less of our clients are doing business with cash, so we have less of a need to be able to provide that cash and more ways that people can do business with the bank.” 

Averch said recent data supports the notion that the pandemic has hastened the move toward digital transactions.

“We know that banks have pivoted quickly to make sure their customers had unfettered access to financial services amid the COVID-19 pandemic,” Averch said. “The pandemic clearly accelerated customers’ use of ATMs, mobile and internet banking because customers either weren’t able to or didn’t choose to visit their bank branches — though we can’t yet quantify it.”

But digital currency completely replacing cash, Averch said, is not on the immediate horizon and possibly never will be.

“Cash may not be king anymore, but a completely cashless society is not likely to happen,” she said. “Some people still prefer to use currency to conduct their transactions, and banks will ensure those customers’ needs are met. Put simply, there will always be a place and a need for cash.”


“Today’s bank customer is demanding increased technology use to conduct his or her financial transactions,” Averch said. 

And cash’s decline primarily benefits banks, she said,  because the technology they use to fill that gap generates revenue — from merchant transaction fees (when clients use debit and credit cards) and banking fees, like overdraft penalties.

The biggest change likely to come from an increasingly cashless economy, Averch said, is a shift in the makeup of the banking workforce.

“The number of industry employees hasn’t changed significantly in Colorado over the past decade, despite dramatic shifts in how customers access their finances and connect with their bank,” Averch said. “That said, the number of IT and compliance staff has been on the rise while the number of frontline staff, such as tellers, has seen some decrease.”

Frontline staff still accounts for two-thirds of the industry’s workforce, she said, but as use of digital currency grows, their jobs could change.

That is already the case at U.S. Bank, where tellers have come out from behind the counter, interacting with customers with iPads in hand, much like employees at an Apple Store do.

“A lot of personnel goes into the handling of cash,” said Heidi Manus, who leads U.S. Bank’s digital efforts. “As we become less and less cash-oriented and people are able to do transactional things digitally, that allows our employees to be consultants for the client to help them plan for their dreams and their future and for the unexpected, rather than just focusing so much on transactional thinking.”


For bank clients, the primary benefit of an increasingly cashless economy is that digital banking and payment processing provides them with more options. 

“Customers can opt toward what is most convenient for them,” Averch said. “For some people, that might be depositing a check using the camera on their smartphone, while another person prefers to visit with their banker in person.”

But digital banking tools aren’t yet an option for everyone.

Cash is still very important — particularly to Americans who are unbanked or underbanked, meaning they either don’t have a relationship with a financial institution at all, or they have a bank account but still often rely on alternative services such as money orders or payday loans to manage their finances,” Averch said.

Harris said a certain portion of the population — particularly low-income individuals — don’t use electronic payments, don’t have a credit card, and in some cases don’t have checking accounts.

“So that’s something that we’re trying to really help with,” Harris said. “There will always be that segment of society and we need to make sure we’re taking care of those people.”

The FDIC reported record-low numbers of unbanked Americans in 2019 — 5.4 percent — with about half of those households unable to meet the minimum balance requirements.

But the FDIC said the number of unbanked households could soon grow, as the pandemic has caused soaring unemployment, a driver of unbanked population growth.

Averch said 68 percent of unbanked Americans have access to a mobile phone, another 40 percent have access to a smartphone, and in the past year, 55 percent of underbanked adults used mobile banking services.

So another benefit of increased digital banking options, she said, is that financial institutions can “help draw the unbanked into the mainstream financial system.”

Averch said most trends toward digital payments will likely continue beyond the current health crisis, “but probably not all of them.”

“What’s most likely is that the pandemic simply sped up customers’ transition to and comfort with electronic banking functions,” she said. “What we expected to take place over the next five or six years has happened all at once.