Just about everyone who has visited a shop, cafe or other consumer business in the last year will have seen signs along the lines of "please pay by card if possible."

By and large, we complied – even when making purchases as small as $1, especially (though anecdotally) if the business did not surcharge card transactions.

A new report from Square provides the data to back observations that the COVID-19 pandemic led to a spurt in the use of cashless transactions.

Where one in 12 Australian businesses were cashless (defined as accepting cards for more than 95% of transactions) at the start of the pandemic, the figure is now one in four.

And the proportion of all in-person transactions paid in cash has approximately halved, with little sign yet of a return to pre-pandemic habits.

Square's report Payments and the Pandemic was based on data from millions of transactions at thousands of Square businesses across the country over the past 12 months.

"As the COVID-19 pandemic swept across Australia last year, we saw a sharp decline in cash use as businesses and consumers became more reluctant to physically handle money at a time when health, and mitigating the spread of germs, was their top priority," said Square Australia head of industry and payments Samina Hussain-Letch.

"And while some regions and industries are starting to see cash pick up in circulation again, we are yet to see it return to pre-pandemic levels."

Not surprisingly, Square's data shows that Victoria saw the most significant rise in the number of cashless businesses, from just 5% in February 2020 to peaks of 40% in April and August 2020, coinciding with the state's two lockdown periods.

While the number of cashless businesses in the Northern Territory still doubled over the course of 2020, this region saw the least dramatic shift in businesses turning away from cash.

National retail chain Pretzel owner and managing director Brittany Garbutt said "Over the past year, our east coast stores have been more impacted by COVID-19 restrictions than our west coast stores, but the shift away from cash use is definitely felt everywhere

"Even in our stores that remained open to in-store customers throughout 2020, like Perth, there was still a huge shift in consumers opting to pay contactless. With health concerns top of mind, people just don't want to handle cash that others have touched — and honestly neither do we."

Swinburne University Business School's Professor Steve Worthington concurs. "A preference to minimise contact with physical currency is likely to be top of mind for consumers for quite some time.

"What's more, with bank branch closures and fewer ATMs available, it has become more difficult to access cash and then to find places to spend it," said Professor Worthington. "Combining that with the fact that many businesses favour digital payments for ease of use, speed and security, there's less incentive for any of us to carry cash now."

Square has also benefited from the trend towards online ordering for delivery or collection. The company said the share of Australian businesses accepting online payments on the platform increased more than 1.5 times over the past year.

The ease and convenience of such transactions means that at least some of the people who tried them for the first time during lockdown periods will continue to use click-and-collect and delivery services as life progressively returns to normal.