COVID-19’s biggest effect on the Irish financial world

There is no doubt that the covid-19 pandemic has changed the financial landscape as we know it.

The pandemic has increased online shopping by great amounts, has changed the way individuals invest in the stock market, and has lead to many central banks around the world printing large sums of money in order to pay unemployment benefits and provide essential aid to businesses both small and large. Investors have began to hedge against growing inflation of currencies around the world by investing in Bitcoin and other cryptocurrencies, sending them to sky-high prices.

But perhaps covid-19’s biggest – and surely its most noticeable –  effect has been a massive increase in contactless payments. Use of cash was already on the decline, but business closures and other covid restrictions, as well as new development in the fintech sector, have seen card and mobile payments soar to record highs.

Contactless payments such as Apple Pay and Google Pay, as well as the new chip and tap-to-pay features included on most debit cards, are fast, easy and sanitary. And let’s face it, it’s much more convenient to carry just your phone and a few cards around than wads of cash.

With restrictions easing in Ireland and across the world, May 2021 saw more and more businesses reopening their doors as covid eases its grip on society. This has caused the biggest surge in contactless payments yet, according to Banking and Payments Federation Ireland (BPFI).

Figures recently published by BPFI show that over €1 billion in contactless payments were made during the month of May. With a total of 67.2 million contactless payments made during May, the average contactless payment comes out to €16.04, only the second time the average payment has been above €16 since BPFI began tracking the data.

At a level of 2.2 million payments per day, the daily rate of contactless payments was at its highest recorded level since BPFI started recording this data back in 2016. This is due in part to many retailers in Ireland switching to products like Apple Pay or Google Pay during the pandemic.

The volume of payments is also up 73 percent since May of 2020, which is to be expected because one year ago, many non-essential retailers were forced to close their doors due to lockdowns.

“The increase we have seen in contactless spending during the course of May likely reflects the easing of Covid-related restrictions on many businesses, including retail and personal services, during this period,” said Mr. Brian Hayes, chief executive of BPFI.

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