Cash is still king in times of Covid-19 – ECB `s Panetta
Cash is still king in times of Covid-19 – ECB's Panetta
Covid-19 may have sped up the digitisation of Europe's economy, but this does not spell the end for cash, according to ECB executive board member Fabio Panetta, who says that the Eurosystem will safeguard physical money, even if a digital euro is launched.
Why Cash is No Longer King
Remember when everyone used to carry cash? Well, times have certainly changed! Studies show we use plastic more often than not. But even plastic may be on the way out. Zelle is a new peer-to-peer mobile banking system.
Best and worst money moves during the coronavirus pandemic
Since the COVID-19 pandemic has left so many cash strapped, 7 On Your Side asked CreditCards.com industry analyst Ted Rossman to break down the best and worst options when it comes to making ends meet.
The worst money crisis move? Getting a credit card cash advance. It’s easy, but it’s too easy.
“The problem is they come with really high fees, interest accrues immediately, and there’s no grace period,” Rossman said. “Average interest is about 25%, and they hit you with another fee 3-5% of the amount being transferred.”
Worst money crisis move #2: Borrowing from your 401(k) plan.
It’s tempting since it is YOUR money. But you will lose time in the market, and withdrawing early can come at a price.
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Cash and payments – COVID-19
Keep yourself safe whichever way you pay. Watch the video to find out how we’re managing cash and payments in response to COVID-19.
Cash or card – will COVID-19 kill cash? | DW Documentary
More and more people are paying with cards or apps these days. Could COVID-19 spell the end of cash? Many people have switched to contactless payment because of fears that the coronavirus might be transmitted by bills and coins. They even use debit cards for small sums at the bakery or newsagent’s. Electronic payment systems are on the rise.
Germany is torn. Up to now, Germans have been known for their love of cash. The country has been famously reluctant to embrace payment by card or app. But since the beginning of the coronavirus crisis more and more people have switched to paying electronically. For many months, it was unclear whether the virus could spread on paper currency and coins. It’s now believed that the risk of COVID-19 transmission on money is low. But the pandemic has amped up the trend toward cash-free payments in Germany. According to a survey by the Association of German Banks, almost 60 percent of people in Germany now pay by debit or credit card, or with smartphone apps. Marion Labouré, a strategist at Deutsche Bank and Harvard lecturer, has carried out research in this field. She says South Korea and China have even put bank notes into quarantine and destroyed bills. ‘The US Central Bank is another example,’ she adds. ‘Cash is definitely being used by fewer and fewer people. Last December, one third of Germans paid with cards or apps, now it’s about 50 percent.’
Credit card companies, which charge fees to retailers, are profiting from this development. But data protection advocates warn that information is gathered, stored and often passed on with each electronic transaction. Sarah Spiekermann, a professor at the University of Economics and Business in Vienna, has warned of the serious consequences of this kind of surveillance capitalism: ‘Ordinary people, people who are quite similar to one another, will find themselves paying different prices for flights and hotel bookings, for instance, or they might be refused insurance or be passed over for job offers.’
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