A few months ago Aussies were rushing to withdraw cash from ASX banks like crazy.

In the second half of March 2020 people were withdrawing large amounts of cash, sometimes millions of dollars at a time. COVID-19 was causing investors and the general public to freak out.

It was reported that banks, such as Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group (ASX: ANZ) and National Australia Bank Ltd (ASX: NAB) had to use more security vans to deliver funds to branches so that people could withdraw cash.

What’s the situation now with Australians withdrawing cash?

The Reserve Bank of Australia (RBA) releases a monthly update about the total value of ATM cash withdrawals in the country.

According to the stats, ATM cash withdrawals dropped from $9.24 billion in March 2020 to $6.41 billion in April 2020. A drop of just over 30%.

I think the fall can probably attributed to several different things. Some people had already withdrawn the cash they needed. People just weren’t spending as much money in April. Aussies were being encouraged to use their card to pay for things rather than cash, particularly with the contactless function.

Paying by card is usually more convenient for consumers. Physical cash is fairly easy to lose. I’d much rather have cash in the bank earning (a little bit of) interest rather than have physical cash these days.

Tyro Payments Ltd (ASX: TYR) is one of the ASX businesses trying to help change the retail environment to become more digital.

It’s clear that Australian confidence is returning. Time will tell whether that confidence is well placed.

Since 23 March 2020 the CBA share price has risen by 33%, the Westpac share price has gone up by 41%, the ANZ share price has jumped 49% and the NAB share price has risen by 47.5%. ASX banks could rise even further from here. They’re still down significantly from their previous prices. But I think there could be even better opportunities out there. 

More reading

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Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Tyro Payments. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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ASX shares can provide exposure for investors to the big shift to contactless payments.

Mastercard recently did a survey which showed that consumers are making a shift to contactless payments for regular purchases as people look for safer ways to pay for things.

According to Mastercard, around 80% of people now use contactless payments. In the Asia Pacific region, tap and go transactions in the region grew 2.5 times faster than non-contactless transactions in grocery and drug store categories between February and March.

Perhaps of most interest, Mastercard revealed that 75% of us said that we’ll continue to use contactless payments after the coronavirus pandemic is over. That doesn’t mean cash is totally dead yet. There are certain groups of society that will probably prefer to keep using cash like the elderly.

ASX shares that could benefit from the shift to contactless payments

Afterpay Ltd (ASX: APT)

The buy now, pay later (BNPL) ASX share is revolutionising how we pay for products. Obviously the instalments method is the main difference. But the Afterpay system provides a contactless way to pay for products too.

Afterpay continues to generate excellent growth year after year. The Afterpay share price is up another 5% today and it has grown by 108% over the past year. It’s one to watch but I really don’t know if it’s good value to buy today.

Pushpay Holdings Ltd (ASX: PPH)

Pushpay is an electronic donation business. The ASX share enables people to digitally donate, so they don’t have to be there in person to give their cash. That’s helpful in today’s climate. 

At the moment Pushpay’s focus is on US churches. Americans are very generous with their tithing. There is a large market for Pushpay to target. Management think the revenue opportunity there for the longer-term amounts to $1 billion.

Pushpay can grow into other donation sectors too. US churches aren’t the only opportunities out there. I’m excited by how much Pushpay can grow its profit margins over the next few years.

MFF Capital Investments Ltd (ASX: MFF)

A listed investment company (LIC) wouldn’t strike you as one of the best ways to get exposure to the growth of contactless payments. But I think the ASX share could be a very good way to get that exposure.

Why would MFF Capital be so good? At the end of May 2020, Visa made up 18.5% of MFF’s portfolio and Mastercard made up 16.2% of the portfolio. That means more than a third of the LIC is exposed to contactless payment businesses. I believe Chris Mackay will continue to lead MFF Capital to strong long-term returns. 

Foolish takeaway

I think each of these ASX shares have exciting growth potential thanks to their link with contactless payments. At the current share prices I’d be happy to buy shares of Pushpay and MFF Capital.

More reading

• 3 top ASX shares to buy now to get rich later
• Afterpay share price overbought says analyst
• The Sezzle and Pointsbet share prices have hit new, all time highs. Time to invest?
• How to become a millionaire before your parents with ASX shares
• Why I would buy Afterpay and these exciting ASX tech shares

Tristan Harrison owns shares of Magellan Flagship Fund Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO and PUSHPAY FPO NZX. The Motley Fool Australia has recommended PUSHPAY FPO NZX. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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