Payment behavior in Austria during the COVID-19 pandemic

The COVID-19 pandemic has significantly impacted consumers’ payment behavior and has influenced how they choose their preferred payment instrument. Using representative data from the Austrian payment diary survey, we examine payment preferences and behavior at the point of sale (POS) between September 2020 and April 2021. In a linear regression framework, we analyze more specifically whether the alleged risk of infection with the coronavirus via banknotes and coins, as perceived by survey respondents, impacted consumers’ use of cash and whether the effect is likely to persist after the end of the pandemic. The survey data indicate that cash remains the preferred means of payment in Austria, accounting for 66% of all POS transactions despite an accelerated downward trend toward cashless alternatives. While recent research results conclude that the actual risk of infection from handling cash is extremely low, our data show that many respondents vastly overestimate this risk. Estimation results suggest that those more concerned about contagion via banknotes and coins tended to perform a smaller share of their transactions with cash and intend to continue doing so in the future. As it is, consumers might have reduced their use of cash somewhat less strongly if they had not overestimated the true, negligible risk of infection.