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Pandemic payment patterns

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  • Jonker, Nicole
  • van der Cruijsen, Carin
  • Bijlsma, Michiel
  • Bolt, Wilko

Abstract

COVID-19 has temporarily changed the relative costs and benefits of different payment methods: cash has become more costly in terms of health risks, ease of use and likelihood of acceptance, whereas debit card usage has become less costly. As a result, consumers have shifted away from cash. Based on unique daily payment diary survey data collected between January 2018 and December 2021 amongst a representative panel of Dutch consumers, we study the shift in payment behaviour and payment preferences during two lockdown periods in the Netherlands in 2020 and 2021. Since the start of the first lockdown the likelihood of debit card usage at the expense of cash has increased by 12 percentage points compared to its trend level. About 60 percent of this shift on top of the autonomous trend persisted several months after the end of the first lockdown and part of it has persisted several months after the end of the second lockdown. The results indicate that the pandemic accelerated the increased usage of debit card at the POS, especially during the first pandemic year. Also, the pandemic has resulted in a shift in payment preferences towards more contactless payments. Both effects are largest for elderly people.

Suggested Citation

  • Jonker, Nicole & van der Cruijsen, Carin & Bijlsma, Michiel & Bolt, Wilko, 2022. "Pandemic payment patterns," Journal of Banking & Finance, Elsevier, vol. 143(C).
    • Handle: RePEc:eee:jbfina:v:143:y:2022:i:c:s0378426622001893
    DOI: 10.1016/j.jbankfin.2022.106593
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    Cited by:

    1. Jan Krzysztof Solarz & Krzysztof Waliszewski, 2022. "Pandemia COVID‑19 z perspektywy finansów – przenikanie się świata realnego i wirtualnego," Ekonomista, Polskie Towarzystwo Ekonomiczne, issue 2, pages 213-234.
    2. Marie-Claire Broekhoff & Carin van der Cruijsen, 2022. "Paying in a blink of an eye: it hurts less, but you spend more," Working Papers 760, DNB.
    3. Justus Meyer & Federica Teppa, 2023. "Euro area consumers' payment behaviour and banking digitalisation," Working Papers 772, DNB.
    4. Santiago Carbó‐Valverde & Pedro J. Cuadros‐Solas & Francisco Rodríguez‐Fernández & José Juan Sánchez‐Béjar, 2024. "Digital innovation and de‐branching in the banking industry: Customer perception and satisfaction," Global Policy, London School of Economics and Political Science, vol. 15(S1), pages 8-20, March.
    5. Broekhoff, Marie-Claire & van der Cruijsen, Carin & de Haan, Jakob, 2024. "Towards financial inclusion: Trust in banks’ payment services among groups at risk," Economic Analysis and Policy, Elsevier, vol. 82(C), pages 104-123.
    6. Michiel Bijlsma & Carin van der Cruijsen & Nicole Jonker & Jelmer Reijerink, 2021. "What triggers consumer adoption of CBDC?," Working Papers 709, DNB.
    7. Vivien Deak & Kristof Takacs, 2023. "A New Vision for Electronic Payments in Hungary - the Payments 2030 Strategy," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 22(3), pages 152-165.
    8. Vivien Deak & Istvan Nemecsko & Tamas Vegso, 2022. "Payment Habits of the Hungarian Households in 2020," MNB Occasional Papers 2022/143, Magyar Nemzeti Bank (Central Bank of Hungary).
    9. Marie-Claire Broekhoff & Carin van der Cruijsen & Jakob de Haan, 2023. "Towards financial inclusion: trust in banks’ payment services among groups at risk," Working Papers 795, DNB.
    10. Camara,Youssouf, 2021. "Digital Payments and Business Resilience : Evidence in the Time of COVID-19," Policy Research Working Paper Series 9665, The World Bank.
    11. Anna Iwańczuk-Kaliska & Mirosława Kaczmarek & Grzegorz Kotliński, 2023. "Non-cash retail payments in selected banks during the COVID-19 pandemic – the case of Poland," Bank i Kredyt, Narodowy Bank Polski, vol. 54(3), pages 309-334.
    12. van der Cruijsen, Carin & de Haan, Jakob & Jonker, Nicole, 2022. "Has the COVID-19 pandemic affected public trust? Evidence for the US and the Netherlands," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 1010-1024.
    13. Kotkowski, Radoslaw & Polasik, Michal, 2021. "COVID-19 pandemic increases the divide between cash and cashless payment users in Europe," Economics Letters, Elsevier, vol. 209(C).
    14. Dominik Höpperger & Codruta Rusu, 2022. "Payment behavior in Austria during the COVID-19 pandemic," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue Q4/21, pages 85-104.
    15. Kotkowski, Radoslaw, 2023. "National culture and the demand for physical money during the first year of the COVID-19 pandemic," Finance Research Letters, Elsevier, vol. 51(C).
    16. Rajas Saroy & Sakshi Awasthy & Naveen K. Singh & Sonali M. Adki & Sarat Dhal, 2022. "The Impact Of Covid-19 On Digital Payment Habits Of Indian Households," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 25(Special I), pages 19-42, March.
    17. Semerikova, E., 2024. "Cashless payments beyond access: What influences the intensity of use?," Journal of the New Economic Association, New Economic Association, vol. 64(3), pages 171-188.
    18. Rösl, Gerhard & Seitz, Franz, 2021. "Cash and crises: No surprises by the virus," IMFS Working Paper Series 150, Goethe University Frankfurt, Institute for Monetary and Financial Stability (IMFS).
    19. Carin van der Cruijsen & Marie-Claire Broekhoff, 2024. "Gender gaps in the world of payments," Working Papers 805, DNB.
    20. Claire Greene & Ellen A. Merry & Joanna Stavins, 2021. "Has COVID Changed Consumer Payment Behavior?," Working Papers 21-12, Federal Reserve Bank of Boston.
    21. Raphael Auer & Giulio Cornelli & Jon Frost, 2022. "The pandemic, cash and retail payment behaviour: insights from the future of payments database," BIS Working Papers 1055, Bank for International Settlements.
    22. Broekhoff, Marie-Claire & van der Cruijsen, Carin, 2024. "Paying in a blink of an eye: it hurts less, but you spend more," Journal of Economic Behavior & Organization, Elsevier, vol. 221(C), pages 110-133.
    23. Jacek Pietrucha, 2021. "Drivers of the Cash Paradox," Risks, MDPI, vol. 9(12), pages 1-17, December.
    24. Carbó-Valverde, Santiago & Cuadros-Solas, Pedro J. & Rodríguez-Fernández, Francisco & Sánchez-Béjar, José Juan, 2023. "Mobility restrictions and payment choices: The case of the Covid-19 pandemic," Journal of Behavioral and Experimental Finance, Elsevier, vol. 40(C).
    25. Michiel Bijlsma & Carin Cruijsen & Nicole Jonker & Jelmer Reijerink, 2024. "What Triggers Consumer Adoption of Central Bank Digital Currency?," Journal of Financial Services Research, Springer;Western Finance Association, vol. 65(1), pages 1-40, February.

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    More about this item

    Keywords

    COVID-19; Consumer payment behaviour; Consumption; Payment diary data;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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