IDEAS home Printed from https://ideas.repec.org/p/dnb/dnbwpp/720.html
   My bibliography  Save this paper

Determinants of trust in banks' payment services during COVID: an exploration using daily data

Author

Listed:
  • Michiel Bijlsma
  • Carin van der Cruijsen
  • Jester Koldijk

Abstract

Trust in banks is key, especially in turbulent times. Using unique daily payment diary data for a representative panel of Dutch consumers, which has been enriched with questions on trust in banks' payment services, we examine the determinants of trust as well as to what extent the COVID-crisis has affected trust. We have the following main findings. First, narrow-scope trust (trust in consumers' own bank payment services) is in general higher than broad-scope trust (trust in banks' payment services in general). Second, COVID-19 measures have affected trust in banks' payment services. The first lockdown and measures taken by banks - such as increasing contactless payment limits - increased narrow-scope trust and broad-scope trust. The second lockdown decreased both notions of trust. The crisis measures impacted the trust of the elderly the strongest. Third, personal characteristics are significantly related to trust in banks' payment services. We find that both types of trust are increasing with digital literacy and the ease of getting by with income. Also, people who hold an account with a large bank have higher broad-scope trust, while customers of small banks have higher narrow-scope trust. Men have lower broad-scope trust, while there is no difference between men and women for narrow-scope trust. People with high income have higher broad-scope trust, while there is no effect on narrow-scope trust.

Suggested Citation

  • Michiel Bijlsma & Carin van der Cruijsen & Jester Koldijk, 2021. "Determinants of trust in banks' payment services during COVID: an exploration using daily data," Working Papers 720, DNB.
    • Handle: RePEc:dnb:dnbwpp:720
    as

    Download full text from publisher

    File URL: https://www.dnb.nl/media/ubzh4gjk/working_paper_no-_720.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Carin van der Cruijsen & Lola Hernandez & Nicole Jonker, 2017. "In love with the debit card but still married to cash," Applied Economics, Taylor & Francis Journals, vol. 49(30), pages 2989-3004, June.
    2. Shim, Soyeon & Serido, Joyce & Tang, Chuanyi, 2013. "After the global financial crash: Individual factors differentiating young adult consumers’ trust in banks and financial institutions," Journal of Retailing and Consumer Services, Elsevier, vol. 20(1), pages 26-33.
    3. Markus Knell & Helmut Stix, 2015. "Trust in Banks during Normal and Crisis Times—Evidence from Survey Data," Economica, London School of Economics and Political Science, vol. 82, pages 995-1020, December.
    4. Thomas Hale & Noam Angrist & Rafael Goldszmidt & Beatriz Kira & Anna Petherick & Toby Phillips & Samuel Webster & Emily Cameron-Blake & Laura Hallas & Saptarshi Majumdar & Helen Tatlow, 2021. "A global panel database of pandemic policies (Oxford COVID-19 Government Response Tracker)," Nature Human Behaviour, Nature, vol. 5(4), pages 529-538, April.
    5. Betsey Stevenson & Justin Wolfers, 2011. "Trust in Public Institutions over the Business Cycle," American Economic Review, American Economic Association, vol. 101(3), pages 281-287, May.
    6. Carin van der Cruijsen & Jakob de Haan & Ria Roerink, 2023. "Trust in financial institutions: A survey," Journal of Economic Surveys, Wiley Blackwell, vol. 37(4), pages 1214-1254, September.
    7. Renée Birgit Adams & Paola Sapienza & Luigi Zingales, 2012. "A Trust Crisis," International Review of Finance, International Review of Finance Ltd., vol. 12(2), pages 123-131, June.
    8. repec:zbw:bofitp:2019_002 is not listed on IDEAS
    9. Friehe, Tim & Marcus, Jan, 2021. "Lost job, lost trust? On the effect of involuntary job loss on trust," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 84, pages 1-1.
    10. Carin Cruijsen & Jakob Haan & David-Jan Jansen, 2016. "Trust and Financial Crisis Experiences," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 127(2), pages 577-600, June.
    11. Park, Na Young, 2020. "Trust and trusting behavior in financial institutions: Evidence from South Korea," International Review of Economics & Finance, Elsevier, vol. 67(C), pages 408-419.
    12. Ampudia, Miguel & Palligkinis, Spyros, 2018. "Trust and the household-bank relationship," Working Paper Series 2184, European Central Bank.
    13. Carin van der Cruijsen & Jakob de Haan & Ria Roerink, 2021. "Financial knowledge and trust in financial institutions," Journal of Consumer Affairs, Wiley Blackwell, vol. 55(2), pages 680-714, June.
    14. Richard Blundell & Monica Costa Dias & Robert Joyce & Xiaowei Xu, 2020. "COVID‐19 and Inequalities," Fiscal Studies, John Wiley & Sons, vol. 41(2), pages 291-319, June.
    15. Arango-Arango, Carlos A. & Bouhdaoui, Yassine & Bounie, David & Eschelbach, Martina & Hernandez, Lola, 2018. "Cash remains top-of-wallet! International evidence from payment diaries," Economic Modelling, Elsevier, vol. 69(C), pages 38-48.
    16. Nicole Jonker & Anneke Kosse, 2013. "Estimating Cash Usage: The Impact of Survey Design on Research Outcomes," De Economist, Springer, vol. 161(1), pages 19-44, March.
    17. Barbara Baarsma & Jesse Groenewegen, 2021. "COVID-19 and the Demand for Online Grocery Shopping: Empirical Evidence from the Netherlands," De Economist, Springer, vol. 169(4), pages 407-421, November.
    18. Chase Foster & Jeffry Frieden, 2017. "Crisis of trust: Socio-economic determinants of Europeans’ confidence in government," European Union Politics, , vol. 18(4), pages 511-535, December.
    19. Carin Cruijsen & Joris Knoben, 2021. "Ctrl+C Ctrl+Pay: Do People Mirror Electronic Payment Behavior of their Peers?," Journal of Financial Services Research, Springer;Western Finance Association, vol. 59(1), pages 69-96, April.
    20. repec:bla:pacecr:v:23:y:2018:i:2:p:131-149 is not listed on IDEAS
    21. Jansen, David-Jan & Jonker, Nicole, 2018. "Fuel tourism in Dutch border regions: Are only salient price differentials relevant?," Energy Economics, Elsevier, vol. 74(C), pages 143-153.
    22. Elvin Afandi and Nazim Habibov, 2017. "Pre- and Post-Crisis Trust in Banks: Lessons from Transitional Countries," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 42(1), pages 73-94, March.
    23. S M A Moin & James F. Devlin & Sally McKechnie, 2017. "Trust in financial services: the influence of demographics and dispositional characteristics," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 22(2), pages 64-76, June.
    24. Jonker, Nicole & Hernandez, Lola & de Vree, Renate & Zwaan, Patricia, 2017. "From cash to cards: how debit card payments overtook cash in the Netherlands," International Cash Conference 2017 – War on Cash: Is there a Future for Cash? 168371, Deutsche Bundesbank.
    25. Oude Groeniger, Joost & Noordzij, Kjell & van der Waal, Jeroen & de Koster, Willem, 2021. "Dutch COVID-19 lockdown measures increased trust in government and trust in science: A difference-in-differences analysis," Social Science & Medicine, Elsevier, vol. 275(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. 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.
    2. 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.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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.
    2. Carin van der Cruijsen & Jakob de Haan & Ria Roerink, 2021. "Financial knowledge and trust in financial institutions," Journal of Consumer Affairs, Wiley Blackwell, vol. 55(2), pages 680-714, June.
    3. Carin van der Cruijsen & Jakob de Haan & Ria Roerink, 2023. "Trust in financial institutions: A survey," Journal of Economic Surveys, Wiley Blackwell, vol. 37(4), pages 1214-1254, September.
    4. 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.
    5. Jonker, Nicole & van der Cruijsen, Carin & Bijlsma, Michiel & Bolt, Wilko, 2022. "Pandemic payment patterns," Journal of Banking & Finance, Elsevier, vol. 143(C).
    6. Chernykh, Lucy & Davydov, Denis & Sihvonen, Jukka, 2019. "Financial stability and public confidence in banks," BOFIT Discussion Papers 2/2019, Bank of Finland Institute for Emerging Economies (BOFIT).
    7. Chernykh, Lucy & Davydov, Denis & Sihvonen, Jukka, 2023. "Financial Stability and Public Confidence in Banks," Journal of Financial Stability, Elsevier, vol. 69(C).
    8. Justus Meyer & Federica Teppa, 2023. "Euro area consumers' payment behaviour and banking digitalisation," Working Papers 772, DNB.
    9. Carin van der Cruijsen & Jakob de Haan & Ria Roerink, 2021. "Financial knowledge and trust in financial institutions," Journal of Consumer Affairs, Wiley Blackwell, vol. 55(2), pages 680-714, June.
    10. Carin van der Cruijsen & Joris Knoben, 2018. "Ctrl+C Ctrl+pay: Do people mirror payment behaviour of their peers?," DNB Working Papers 611, Netherlands Central Bank, Research Department.
    11. Chernykh, Lucy & Davydov, Denis & Sihvonen, Jukka, 2019. "Financial stability and public confidence in banks," BOFIT Discussion Papers 2/2019, Bank of Finland, Institute for Economies in Transition.
    12. Carin van der Cruijsen, 2017. "Payments data: do consumers want to keep them in a safe or turn them into gold?," DNB Working Papers 563, Netherlands Central Bank, Research Department.
    13. repec:zbw:bofitp:2019_002 is not listed on IDEAS
    14. Michiel Bijlsma & Carin van der Cruijsen & Nicole Jonker & Jelmer Reijerink, 2021. "What triggers consumer adoption of CBDC?," Working Papers 709, DNB.
    15. Güner, Z. Nuray & Önder, Zeynep, 2022. "Bank affiliation and discounts on closed-end funds," International Review of Financial Analysis, Elsevier, vol. 83(C).
    16. Carin Cruijsen & Joris Knoben, 2021. "Ctrl+C Ctrl+Pay: Do People Mirror Electronic Payment Behavior of their Peers?," Journal of Financial Services Research, Springer;Western Finance Association, vol. 59(1), pages 69-96, April.
    17. Fungáčová, Zuzana & Hasan, Iftekhar & Weill, Laurent, 2019. "Trust in banks," Journal of Economic Behavior & Organization, Elsevier, vol. 157(C), pages 452-476.
    18. Donato Masciandaro, 2023. "Politicians, Trust and Financial Literacy: When Do Politicians Care?," BAFFI CAREFIN Working Papers 23206, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    19. Alamsyah, Halim & Ariefianto, Moch. Doddy & Saheruddin, Herman & Wardono, Seto & Trinugroho, Irwan, 2020. "Depositors’ trust: Some empirical evidence from Indonesia," Research in International Business and Finance, Elsevier, vol. 54(C).
    20. Zuzana Fungáčová & Eeva Kerola & Laurent Weill, 2022. "Does Experience of Banking Crises Affect Trust in Banks?," Journal of Financial Services Research, Springer;Western Finance Association, vol. 62(1), pages 61-90, October.
    21. Fotios Pasiouras & Elie Bouri & David Roubaud & Emilios Galariotis, 2021. "Culture and Multiple Firm–Bank Relationships: A Matter of Secrecy and Trust?," Journal of Business Ethics, Springer, vol. 174(1), pages 221-249, November.

    More about this item

    Keywords

    trust in banks; COVID-19; crises measures; payments; payment diary data;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:dnb:dnbwpp:720. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: DNB (email available below). General contact details of provider: https://edirc.repec.org/data/dnbgvnl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.