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Merchants shun cash as coronavirus infection fears widen

Global health crisis speeds up cashless payments in Asia

While avoiding using cash may reduce personal contact, there is no evidence that banknotes or coins carry disease.   © Reuters

HONG KONG -- Retail traders across Australia and parts of Asia are increasingly refusing to handle cash amid fears that bank notes and coins could transmit the coronavirus.

At a FoodWorks supermarket in the Melbourne suburb of East Ivanhoe on Tuesday, no cash payments were being accepted.

"I tried to pay cash for a jar of spaghetti sauce but they wouldn't allow it," Melbourne lawyer Lisa Scott told Nikkei Asian Review.

"I was told that they were only accepting card transactions to minimize the transmission of the deadly virus, and that the store was just trying to do what's in everyone's best interests."

With the Reserve Bank of Australia, like many other countries including the U.S., noting that "refusal to accept payment in legal tender bank notes and coins is not unlawful," more signs are appearing in shop windows across Melbourne and Sydney warning that only cards or other forms of electronic payment are welcome.

Sales assistant Siva Kumar, who works three shifts a week at a fuel station near Melbourne's busy Tullarmarine Freeway, said customers were also embracing the idea of giving up paying with bills and coins.

"Over the last two weeks, the cash component has dropped to about 15% of collections," said Kumar, whose fuel station takes in about A$9,000 ($5,300) during an average six hour period.

"Customers now rarely talk. They seldom use paper money and refuse to touch coins," Kumar added. "The quantum of those using touch payments, Google Pay and Apply Pay has surged."

The National Bank of Cambodia last week urged consumers to use e-payment services instead of cash to "help prevent and contain the spread of COVID-19," and ABA, one of the country largest banks, encouraged people to pay bills and transfer funds via mobile services.

David Hui, a professor of respiratory medicine at the Chinese University of Hong Kong, said it's not clear if the virus can be transmitted via paper notes as there is no specific data showing any correlation.

Hui said that while avoiding using cash "may reduce personal contact to some extent," he is still using it to purchase meals in the hospital canteen while paying with cards for more expensive items.

And while there may be no medical evidence proving bank notes can carry disease, Chinese authorities are withdrawing bank notes passed in hospitals and fresh food markets and disinfecting them with ultraviolet light and heat treatments just in case.

There are even reports of people in South Korea and the U.K. using microwave ovens to try and disinfect bank notes, leaving them handfuls of charred paper.

While cash still dominates many Asian economies including India, Japan, Singapore, Thailand, the Philippines, Indonesia and Hong Kong, a 2019 study by global consultancy McKinsey found that electronic payments in Asia are growing at around 15% a year, which is more than 2.5 times the average rate of economic growth.

The coronavirus outbreak could accelerate that ongoing switch away from cash if recent trends reported by payment service providers continues.

Hong Kong's Octopus Cards, which issues the plastic that doubles as public transport passes and e-wallets, said transaction volumes had risen by up to 30% through January and February compared to the same period last year.

Transaction amounts for Octopus's O! ePay Mastercard, meanwhile, had also jumped by around 60% during the same period, the company said in an email.

Octopus's O! ePay Mastercard transactions at personal health stores were up by 40% alone in February, the company said, while the number of smaller shops joining the Octopus payment system had doubled.

Rival e-wallet operator TNG FinTech Group, meanwhile, said transaction volumes in Hong Kong rose by more than 50% in February.

TNG founder Alex Kong said he expects transaction volumes to grow by a further 35% in March as more people in the city "follow suit in limiting their contact with bank notes to reduce the chances of transmission."

Ngo Trung Linh, CEO of VietUnion Online Services Corporation, which runs Payoo, a prominent digital payment provider in Vietnam, said the company has seen transaction volumes increase by 10% since the coronavirus outbreak.

"Online transactions have been increasing faster than offline transactions as people limit traffic as preventive measures," he told Nikkei in an email, adding that Payoo is trying to facilitate more convenient solutions such as by QR Code through mobile applications and mobile banking apps to encourage less contact.

Indonesian mobile wallet company Dana, which has over 35 million users in the Southeast Asian country and is backed by Ant Financial, reports a significant 11% increase in online transactions.

"Payments of bills and phone credit purchase are becoming the most frequently used services," said Dana CEO Vincent Iswara.

In China, which has been hardest hit by the coronavirus outbreak, WeChat Pay said it had seen a sharp drop in transactions in January and February, with volumes rebounding only in March as authorities eased restrictions on people's movement.

Additional reporting by Nikki Sun and Coco Liu in Hong Kong, Erwida Maulia in Indonesia and Shaun Turton in Cambodia.

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