This is the web version of The Ledger, Fortune’s weekly newsletter covering financial technology and cryptocurrency. Sign up here to receive future editions.
About two weeks ago, as we at Fortune and many others elsewhere prepared to work from home indefinitely, I noticed something unsettling on my last commute back from the office. It wasn’t just the grocery stores with lines out the door, but also the ATMs, with queues of people filling small vestibules, waiting to withdraw cash.
Of course, cash—as in paper money—has been one of the least useful commodities stockpiled at a time when most of us are confined to our homes. Indeed, McKinsey & Co., the consultancy, is tracking huge spikes in digital payments, with e-commerce transactions up an estimated 81% in hard-hit Italy so far in March, according to The Wall Street Journal.
But one place I thought cash might come in handy was at New York’s Greenmarket, an open-air farmers’ market I visited last week as a (seemingly safer, and small-business-friendly) alternative to my crowded local grocery store. To my surprise, it was much the opposite: Several vendors are requesting card payments to avoid handling cash and reduce their potential exposure to COVID-19.
“Do you have a contactless card you can just tap?” a seller asked me. “The less contact, the better.”
While tap-to-pay cards have been used for several years around the world, they’ve been slower to catch on in the U.S. Now, as the coronavirus pandemic makes us all reconsider how we interact with each other as well as with public and communal surfaces such as checkout counters, contact-free and mobile forms of payment may enjoy greater popularity.
Jack Dorsey, the co-founder and CEO of Square (as well as Twitter), updated his investors Tuesday on how the pandemic was affecting the payments technology company. Besides cash flow, which has dried up amid stay-at-home orders and forced business closures, Dorsey said, “The biggest problem sellers are facing right now are around shifting to non-contact commerce.”
Over the past 10 days, the total volume of payments via Square have slowed 25% compared to last year, and 45% in more restricted cities like New York and San Francisco. Yet volume in card-not-present transactions, such as Square’s newly launched curbside delivery feature, has surged three-fold. Dorsey suggested that habits shifted by the coronavirus crisis might persist once life goes back to normal. “Over the long-term, I do imagine that we’ll see a lot more demand for online and purely digital services,” he said.
To be clear, there’s no strong evidence suggesting that COVID-19 is spreading through the exchange of physical money, even though the Fed was reportedly “quarantining” U.S. dollars . The World Health Organization recently clarified that it “did NOT say that cash was transmitting coronavirus,\" contradicting earlier reports that it had encouraged switching to digital payment forms.
But contactless cards and mobile payment apps like Apple Pay, once touted for their security features , may now offer a different sort of safety. “I expect the coronavirus outbreak will drive higher rates of adoption and utilization of contactless payment methods as consumers begin to eschew cash for more sanitary options,” says Jordan McKee, Research Director at 451 Research, a part of S&P Global Market Intelligence.
In Europe and Asia, some nations have recently raised contactless payment limits so people can make bigger purchases without entering their PIN on a potentially infected device. Outside of the U.S., about a third of Visa card transactions are “tapped”—as in contact-free—and America is “beginning to mirror these global trends,” according to a Visa spokesperson.
And if you, like me, have recently paid with your phone or a tap of your card, only to be asked to sign your receipt with a possibly germ-contaminated stylus, know that you can avoid this panic-inducing dilemma: Major credit card companies stopped requiring signatures in 2018, but retailers and other vendors have been slow to catch on. Mastercard, for one, recently reminded merchants that signatures are optional, and discouraged, in order to reduce the spread of COVID-19. If asked to sign at checkout, just (politely) ask the clerk to override the signature feature, a Mastercard spokesperson explains.
Meanwhile, Apple and PayPal declined to comment on whether they’ve seen any changes in consumers’ use of digital payments amid the pandemic, but a spokesperson for Apple notes that “many food delivery apps that people and businesses are relying on” accept Apple Pay. And PayPal, as well as Square, confirmed that they are working with the U.S. Treasury and government officials to offer their support to help speed the delivery of the $1,200 stimulus checks the Trump administration has pledged to send Americans.
Stay safe out there.
Finally, it is with great disappointment that we are cancelling this year’s Fortune Brainstorm Finance conference in Mon...