Jonathan Hack (JH): You selected an interesting and provocative image. What motivated you to select that image, and what commentary does it offer on society’s experience with Covid-19?

Bill Maurer (BM): The image is a “How would you like to pay?” sign. Something like what you’d see in a store or restaurant or online, and it gives you the options of Visa, Mastercard, or toilet paper. When the pandemic and shelter-in-place started, there was a rush to the stores to hoard toilet paper. People thought they’d be stuck at home with nothing to use to wipe their butts. This led to a broader commentary online and elsewhere about the nature of “value.” Toilet paper was suddenly worth its weight in gold. That’s what is interesting to me about the image. It captures more than just the pandemic. 

There was a big debate going on in the policy community and in the payments industry about people’s changing payment behavior, and a few really weird things were going on. Everybody knows that digital and mobile payment is getting bigger. But at the same time, central banks around the world have been seeing—even before the pandemic—an increase in demands for cash. We’re going more digital, but people are also taking more cash out of the ATM. What’s up with that? 

It was happening before the pandemic. Some of that can be attributed to interest rates being at historic lows, and, in parts of Europe and Japan, interest rates are even negative. Folks were starting to hoard cash as a means of savings, as a means of protecting their assets. When the pandemic hit and when people started hoarding toilet paper, they also upped their hoarding of cash, which is really curious. So cash demand has spiked, more than before, even though the places where folks are using cash have declined dramatically. Ultimately, it’s a kind of “flight to safety”: people presume that it’s safer to hold cash than to have it in the bank.

In the current crisis, that doesn’t make too much sense. If you were thinking about a hurricane or some big infrastructure failure, then it does make sense to go to the ATM and get out some cash before everything gets shut down. But in this case, it’s weird. The image then led me to start looking more broadly at shifts in payment behavior and discourses about money and payment that have been popping up all over the place since the shelter-in-place orders were announced.

For instance, in the early days, there were reports that China was quarantining banknotes and fumigated them over concerns that the coronavirus could live on on paper money. That doesn’t seem to be true. Reports suggest that the coronavirus does much better on metal and plastic, so all of the technologies associated with digital payment probably pose more of a threat to us than cash, right now. But still, cash carries this notion of being “dirty” because it passes through so many hands. 

Recognizing this, digital payment companies and related interests have really gone to town with this crisis, heralding, “The death of cash is upon us”; “Now is the time to go digital”; and “Now’s the time to use mobile and online wallets.” There is a huge industry push. That was happening before this crisis, but I think we’re going to see it getting amped up. 

There was a lot of concern among policymakers about retail establishments going cashless. Retail establishments that started refusing to accept cash were basically excluding poor and unbanked people from going to stores and restaurants. Right before Covid-19 hit, a number of municipalities and states banned cashless retail. But now I think we’re going to see that struggle on again. That big game between private payment providers who want us all to stop using cash, primarily because they can charge fees for digital and mobile payments and can gather a rich trove of data about us that then can be leveraged for other purposes.

JH: Do you think cash will still be king, or do you see these peer-to-peer mobile money platforms coming out ahead?

BM: People will still turn to cash, but maybe not to pay with. They’ll probably be using cash to hold on to as a kind of savings, and we saw those behavior shifts before the pandemic. I think it’s going to continue. There’s certainly going to be concern from Congress and other authorities about the extent to which cashless payment is going to exclude the poor.

You’re still seeing really specific kinds of cash payments go on. Somewhat illicit, like people tipping store clerks in cash as a gesture of, “Thank you for being there,” tipping nurses in hospitals in cash, and I think we’ll continue to see that go on as well. 

There is pressure on central banks to offer their own digital currency, to do a kind of state-issued digital denomination that’s free to use and that’s accessible to anybody. As policymakers start thinking about other forms of getting relief out to people to deal with the economic consequences of the pandemic, if everybody has an account at the central bank, it’s really easy for them to do what they call a “helicopter drop” of money into people’s accounts.

JH: One of the last things that I’m curious to get your take on is, when society ultimately gets a handle on Covid-19, what do you see as some of the lasting effects on society—both American society and society, broadly? And with that, how do you see posterity reading, talking about, and studying this moment?

BM: I definitely hope that the people of the future will realize that during this period everything wasn’t all digital and mobile and online or ambient payment. That there was a lot of friction. Everything was kind of lumpy. People are still using cash, maybe not to pay, but to hoard, but also to tip and to express social connections.

But I think this will be the moment we will begin to see the use of ambient payment, more broadly. The sort of payment that takes place in a Lyft or an Uber, where it happens in the background and nobody has to touch anything. When things reopen up, people are going to be thinking twice about touching those keypads or handing the credit card to the person or being in a restaurant with a handheld point-of-sale device that goes from table to table and customer to customer.

People are going to get more savvy about the fact that all technologies of payment carry some risk of pathogenic transmission, cash probably less than any of the others. But we can’t assume that just because there’s some fancy device being passed around that it’s not also passing around the virus.

This conversation was conducted on May 1, 2020. It has been edited for length and clarity.