Switching from Cash to Cashless Payments during the COVID-19 Pandemic and Beyond

Tp, Wisniewski; Polasik, Michał; Kotkowski, Radosław; Moro, Andrea

doi:10.2139/ssrn.3794790

Cited by 61 publications

(48 citation statements)

References 6 publications

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“…The literature review shows that the 'risk' factor has recently started to be analyzed in terms of health rather than finance [49]. The fear of contagion-according to latest studiesplay a prominent role in the decision to abandon cash for transactional purposes [50] and was a catalyst for contactless payment technology usage [51]. Recent studies also show that the outbreak of COVID-19 played a key role in changing the acceptance and development of branchless banking [52].…”

Section: Literature Review-payment Behavior During the Covid-19 Pandemicmentioning

confidence: 99%

Fear of the COVID-19 Pandemic and Social Distancing as Factors Determining the Change in Consumer Payment Behavior at Retail and Service Outlets

2021

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The aim of this study was to identify the factors inducing customers to choose cashless payments made with payment cards at retail and service outlets during the COVID-19 pandemic. We identified factors that are crucial for consumers’ functioning under pandemic conditions, but which have so far been neglected in research. The estimated logit model indicates that the variables significantly influencing the more frequent choice of payment cards at retail outlets are related to the fear of infection and perception of the advantages of new technological solutions in connection with social distancing. Our study shows that, in addition to sociodemographic characteristics such as age and level of education, emotionally motivated factors induced by the pandemic have begun to play an important role in the transition to cashless payment.

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Section: Literature Review-payment Behavior During the Covid-19 Pandemicmentioning

confidence: 99%

Fear of the COVID-19 Pandemic and Social Distancing as Factors Determining the Change in Consumer Payment Behavior at Retail and Service Outlets

2021

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“…Most of the existing studies analyze changes in cash use, although a few address broader changes in payment method use. The latter include , , Coyle et al (2021), Chen et al (2020), Auer et al (2020), Wisniewski et al (2021). Cevik (2020) shows that the risk of infection reduced the demand for cash.…”

Section: Literature Reviewmentioning

confidence: 99%

Untitled

2022

rdr

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The COVID-19 pandemic has caused large changes in consumer spending, including how people make their payments. We use data from a nationally representative survey of US consumers collected before the pandemic in 2018 and 2019 and in 2020 to analyze changes in consumer payment behavior during the pandemic. We find that compared with their payment behavior in 2019, consumers had shifted some of their purchases from in person to online by fall 2020, significantly lowered their use of cash for purchases, and shifted their person-to-person (P2P) payments away from paper (cash and checks). Those changes are consistent with what we might expect, as many people were less able or willing to shop in person. The adoption of electronic P2P increased, especially the use of payment apps such as PayPal, Venmo, and Zelle. Consumers who worked exclusively from home during COVID made significantly higher shares of their payments online or through mobile devices and were less likely to use cash at all compared with those who worked at least partly in person, even after we control for income and education levels. In contrast, payment-behavior changes that took place from 2018 to 2019 were smaller in magnitude and largely insignificant, suggesting that COVID likely accelerated any longer-term trends. Although it is too soon to determine whether these changes will persist for the longer term, we observed them several months after the onset of the pandemic, so they certainly were not just temporary shifts.

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“…The scale of payments made by households with the use of electronic payment instruments has increased significantly. This was due to both concerns about health safety (information about the possibility of virus transmission via banknotes) and changes in consumer behavior, including the increase in online shopping (Ardizzi et al 2020;Jonker et al 2020;Kotkowski and Polasik 2021;Wisniewski et al 2021). At the same time, however, cash maintenance has increased significantly.…”

Section: Literature Reviewmentioning

confidence: 99%

“…The phenomenon of the simultaneous increase of the cash/GDP ratio and the increase in the number of non-cash transactions is often referred to as the "cash paradox" (Jiang and Shao 2020;Zamora-Pérez 2021). Current data indicate that the period of the COVID-19 pandemic contributed to the further popularization of electronic payments, for sanitary reasons (Auer et al 2020;Wisniewski et al 2021) and a parallel increase in the share of cash in GDP (Ashworth and Goodhart 2020a).…”

Section: Introductionmentioning

confidence: 99%

Drivers of the Cash Paradox

Pietrucha

2021

Risks

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An upward trend in the share of cash in GDP has been observed since the beginning of the 21st century and has not yet been fully explained in the literature. In fact, the interest rate is the only variable that has been well researched and well confirmed as a determinant of the cash/GDP ratio. The novelty of this study is primarily considering new determinants of the share of cash in GDP (including in particular monetization and financial development), as well as testing the significance of uncertainty and institutions. The data cover the period 2001–2020 for 82 countries. The most important conclusions include: the share of cash in GDP is primarily dependent on its lagged values (payment habits) and the ultra-loose monetary policy of central banks. However, some other variables also contribute to this process—such as monetization and crises in the real economy.

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Switching from Cash to Cashless Payments during the COVID-19 Pandemic and Beyond

Cited by 61 publications

References 6 publications

Fear of the COVID-19 Pandemic and Social Distancing as Factors Determining the Change in Consumer Payment Behavior at Retail and Service Outlets

Fear of the COVID-19 Pandemic and Social Distancing as Factors Determining the Change in Consumer Payment Behavior at Retail and Service Outlets

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Drivers of the Cash Paradox

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