25 May 2020
The COVID-19 pandemic has transformed industries and consumer preferences – none more so than industries like hospitality which are hugely reliant on human interaction.
But one interaction is increasingly unnecessary: exchanging cash. According to Trevor Simmons, the owner of Melbourne-based café and roastery Industry Beans, this is a trend which was already evident but has now taken off.
"I certainly think that hand-to-hand transaction is a thing of the past for a lot of businesses now.” - Simmons
“That move was driven by customers a couple of years ago Simmons says. “When we started our first cafe, I remember the takings were really heavily cash dominated. At the end of the day there would be this big wad of cash and this tiny little bank transaction. It was about 80/20 when we started - now, it's probably the opposite.”
Trevor and his brother Steve set up Industry Beans in 2011 as a hospitality-focused business with a really strong wholesale and e-commerce element. This diverse business structure allowed the brothers to rely more heavily on business-to-business and business-to-consumer retail sales of their coffee beans when COVID restrictions hit their cafes.
“We're a bit protected from the dramatics of the downfall in the economy and what we've seen (because of that diversification,” Simmons explains.
The decision to go cashless at Industry Beans a few years ago meant the business was already ahead of the curve as consumers avoided physically handling money for hygiene purposes.
Simmons thinks the pandemic is going to catalyse the move to cashless for a lot of businesses: “I think the hygiene factor… will be one of the main driving forces. But then I think people will see the other benefits… the ease of running a business and day-to-day operations.”
“I certainly think that hand-to-hand transaction is a thing of the past for a lot of businesses now.”
Tap and go
Unsurprisingly, consumers have shown a greater preference for contactless payments during the COVID-19 pandemic.
Since restrictions began in March, cash withdrawals from ANZ ATMs dropped 40 per cent compared with the same period in 2019. In the same period, ANZ registered 13 million more “taps” from cards, phones and watches than it did in 2019.
From January to April 2020, mobile payments saw a significant increase of 59 per cent in transaction volumes and 66 per cent in transaction value from an average spend per transaction of $A31.43 to $A35.44 compared with the same period last year.
Karly Dwyer is contributor for bluenotes
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
25 May 2020
22 Apr 2020