When Corona hit the financial world...

When Corona hit the financial world....

For more than 6 months now, we have been hearing everywhere how much the current situation is hurting the economy. It only becomes really tangible when your favourite coffee shop around the corner closes down.

But how much is the virus hitting the financial world and how far has the pandemic already affected us in this area?

Financial crisis 2020?

The 2008 global financial crisis was the result of a full barrel, where the last drop - the collapse of the real estate sector and the loss of confidence in the financial world - triggered a whole flood of crises. 

In the current situation, however, things look somewhat different. According to the Ifo Institute, there is a so-called simultaneous supply and demand shock.

This means that many goods could not be produced for a long time for medical reasons, but at the same time they could not be bought due to the limited purchasing possibilities. Accordingly, consumption in many areas does not stop, but merely shifts in time. Economists expect a faster economic recovery as a result. Of course, only as long as the virus can be contained quickly and there is no wave of insolvencies or major layoffs.

Another extraordinary effect of the pandemic can currently be observed in shops at the checkout.

“With card, please."

And this from Germans who prefer card payments instead of their beloved cash.

In 2018, over 76 percent of all retail purchases were still paid for in cash. In general, there seems to be an unspoken rule of thumb "small amounts in cash, large amounts by card", because the largest sums of money flow digitally.

The German banking industry had already announced in mid-April that it would increase contactless card payments from the previous limit of €25 to €50 in order to support hygienic and contactless payment methods. The figures of the survey conducted by the Association of German Banks show that this was definitely a correct measure. 26% of respondents deliberately refrained from paying in cash during the Corona crisis. As one can imagine, the number of cash payments increases with age. Nevertheless, 24% of those over 60 years of age changed their payment behaviour towards card payments here as well.



So if there is anything positive to take away from the current situation, it is that change is possible in society. Even if cash will not disappear overnight, contactless payment has many advantages, especially at the moment.

Besides the high costs of printing, storing and transporting cash, the fear of contagion is great. This adds another point to the advantages of card payment. The trend towards cashless payment methods is thus steadily developing into an integral part of our everyday lives.