IDEAS home Printed from https://ideas.repec.org/a/bla/finmgt/v54y2025i4p839-862.html

Pandemics and Household Cash Withdrawals: Evidence From Transaction Data on Hundreds of Millions of Bank Cards

Author

Listed:
  • Haohan Ren
  • Kemin Wang
  • Bohui Zhang
  • Fan Zhang

Abstract

Relying on data from 165 million bank cards in China, we find that people use less cash for transactions after the outbreak of COVID‐19. The effect is more pronounced in cities with a larger elderly population, lower education levels, more advanced digital infrastructure, and greater COVID‐19 exposure. Cash usage remains low even after COVID‐19 is no longer a public concern. Further analysis suggests that policies promoting noncash payment methods only partially explain this trend. Overall, our study suggests that COVID‐19 has a long‐term impact on household payment habits.

Suggested Citation

  • Haohan Ren & Kemin Wang & Bohui Zhang & Fan Zhang, 2025. "Pandemics and Household Cash Withdrawals: Evidence From Transaction Data on Hundreds of Millions of Bank Cards," Financial Management, Financial Management Association International, vol. 54(4), pages 839-862, December.
    • Handle: RePEc:bla:finmgt:v:54:y:2025:i:4:p:839-862
    DOI: 10.1111/fima.12500
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/fima.12500
    Download Restriction: no
    File URL: https://libkey.io/10.1111/fima.12500?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Manoj Thomas & Kalpesh Kaushik Desai & Satheeshkumar Seenivasan, 2011. "How Credit Card Payments Increase Unhealthy Food Purchases: Visceral Regulation of Vices," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 38(1), pages 126-139.
    2. Bauer, Thomas K. & Haisken-DeNew, John P., 2001. "Employer learning and the returns to schooling," Labour Economics, Elsevier, vol. 8(2), pages 161-180, May.
    3. Azi Ben-Rephael & Zhi Da & Ryan D. Israelsen, 2017. "It Depends on Where You Search: Institutional Investor Attention and Underreaction to News," The Review of Financial Studies, Society for Financial Studies, vol. 30(9), pages 3009-3047.
    4. O'Hara, Maureen & Zhou, Xing (Alex), 2021. "Anatomy of a liquidity crisis: Corporate bonds in the COVID-19 crisis," Journal of Financial Economics, Elsevier, vol. 142(1), pages 46-68.
    5. Gabriel Chodorow-Reich & Gita Gopinath & Prachi Mishra & Abhinav Narayanan, 2020. "Cash and the Economy: Evidence from India’s Demonetization," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 135(1), pages 57-103.
    6. Fang, Hanming & Wang, Long & Yang, Yang, 2020. "Human mobility restrictions and the spread of the Novel Coronavirus (2019-nCoV) in China," Journal of Public Economics, Elsevier, vol. 191(C).
    7. Barrios, John M. & Hochberg, Yael V., 2021. "Risk perceptions and politics: Evidence from the COVID-19 pandemic," Journal of Financial Economics, Elsevier, vol. 142(2), pages 862-879.
    8. Richard Wright & Erdal Tekin & Volkan Topalli & Chandler McClellan & Timothy Dickinson & Richard Rosenfeld, 2017. "Less Cash, Less Crime: Evidence from the Electronic Benefit Transfer Program," Journal of Law and Economics, University of Chicago Press, vol. 60(2), pages 361-383.
    9. Guerino Ardizzi & Andrea Nobili & Giorgia Rocco, 2020. "A game changer in payment habits: evidence from daily data during a pandemic," Questioni di Economia e Finanza (Occasional Papers) 591, Bank of Italy, Economic Research and International Relations Area.
    10. Pierre Bachas & Paul Gertler & Sean Higgins & Enrique Seira, 2021. "How Debit Cards Enable the Poor to Save More," Journal of Finance, American Finance Association, vol. 76(4), pages 1913-1957, August.
    11. Nicolas Crouzet & Apoorv Gupta & Filippo Mezzanotti, 2023. "Shocks and Technology Adoption: Evidence from Electronic Payment Systems," Journal of Political Economy, University of Chicago Press, vol. 131(11), pages 3003-3065.
    12. V. Kumar & Nandini Nim & Amit Agarwal, 2021. "Platform-based mobile payments adoption in emerging and developed countries: Role of country-level heterogeneity and network effects," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 52(8), pages 1529-1558, October.
    13. 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.
    14. Loewenstein, George & Price, Joseph & Volpp, Kevin, 2016. "Habit formation in children: Evidence from incentives for healthy eating," Journal of Health Economics, Elsevier, vol. 45(C), pages 47-54.
    15. Fernando Alvarez & Francesco Lippi, 2009. "Financial Innovation and the Transactions Demand for Cash," Econometrica, Econometric Society, vol. 77(2), pages 363-402, March.
    16. Lippi, Francesco & Secchi, Alessandro, 2009. "Technological change and the households' demand for currency," Journal of Monetary Economics, Elsevier, vol. 56(2), pages 222-230, March.
    17. Chodorow-Reich, Gabriel & Coglianese, John, 2021. "Projecting unemployment durations: A factor-flows simulation approach with application to the COVID-19 recession," Journal of Public Economics, Elsevier, vol. 197(C).
    18. Thomas Fujiwara & Kyle Meng & Tom Vogl, 2016. "Habit Formation in Voting: Evidence from Rainy Elections," American Economic Journal: Applied Economics, American Economic Association, vol. 8(4), pages 160-188, October.
    19. Alessandro Zattoni & Amedeo Pugliese, 2021. "Corporate Governance Research in the Wake of a Systemic Crisis: Lessons and Opportunities from the COVID‐19 Pandemic," Journal of Management Studies, Wiley Blackwell, vol. 58(5), pages 1405-1410, July.
    20. Bao, Zhengyang & Huang, Difang, 2021. "Shadow Banking in a Crisis: Evidence from Fintech During COVID-19," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 56(7), pages 2320-2355, November.
    21. Sumit Agarwal & Pulak Ghosh & Tianyue Ruan & Yunqi Zhang, 2024. "Transient Customer Response to Data Breaches of Their Information," Management Science, INFORMS, vol. 70(6), pages 4105-4114, June.
    22. Jiafeng Chen & Jonathan Roth, 2024. "Logs with Zeros? Some Problems and Solutions," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 139(2), pages 891-936.
    Full references (including those not matched with items on IDEAS)

    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. Matheus C Sampaio & Jose Renato H Ornelas, 2024. "Payment technology complementarities and their consequences on the banking sector: evidence from Brazil's Pix," BIS Papers chapters, in: Bank for International Settlements (ed.), Faster digital payments: global and regional perspectives, volume 127, pages 17-43, Bank for International Settlements.
    2. Barros, Fernando & Delalibera, Bruno R. & Neto, Valdemar Pinho & Rangel, Victor, 2025. "Natural disasters and financial technology adoption," Economics Letters, Elsevier, vol. 247(C).
    3. Bernardo Ricca & José Renato H. Ornelas & Lucas A. Mariani, 2023. "Banks’ Physical Footprint and Financial Technology Adoption," ERSA Working Paper Series 888, Economic Research Southern Africa.
    4. Alvarez, Fernando & Argente, David & Jimenez, Rafael & Lippi, Francesco, 2022. "Cash: A Blessing or a curse?," Journal of Monetary Economics, Elsevier, vol. 125(C), pages 85-128.
    5. Fu, Hongqiao & Cheng, Terence C. & Zhan, Jiajia & Xu, Duo & Yip, Winnie, 2024. "Dynamic effects of the COVID-19 pandemic on the demand for telemedicine services: Evidence from China," Journal of Economic Behavior & Organization, Elsevier, vol. 220(C), pages 531-557.
    6. Francesco Flaviano Russo, 2022. "Cash thresholds, cash expenditure and tax evasion," Fiscal Studies, John Wiley & Sons, vol. 43(4), pages 387-403, December.
    7. Luca Baldo & Elisa Bonifacio & Marco Brandi & Michelina Lo Russo & Gianluca Maddaloni & Andrea Nobili & Giorgia Rocco & Gabriele Sene & Massimo Valentini, 2021. "Inside the black box: tools for understanding cash circulation," Mercati, infrastrutture, sistemi di pagamento (Markets, Infrastructures, Payment Systems) 7, Bank of Italy, Directorate General for Markets and Payment System.
    8. Lucas A. Mariani & Jose Renato Haas Ornelas & Bernardo Ricca, 2023. "Banks’ Physical Footprint and Financial Technology Adoption," Working Papers Series 576, Central Bank of Brazil, Research Department.
    9. Ueda, Kozo, 2024. "Effects of bank branch/ATM consolidations on cash demand: Evidence from bank account transaction data in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 71(C).
    10. Ma, Qingguo & He, Yijin & Tan, Yulin & Cheng, Lu & Wang, Manlin, 2024. "Unveiling the Impact of Payment Methods on Consumer Behavior: Insights and Future Directions," OSF Preprints 3fphk, Center for Open Science.
    11. Difang Huang & Ying Liang & Boyao Wu & Yanyi Ye, 2025. "Estimating the impact of social distance policy in mitigating COVID-19 spread with factor-based imputation approach," Empirical Economics, Springer, vol. 68(2), pages 585-601, February.
    12. Ulf Von Kalckreuth & Tobias Schmidt & Helmut Stix, 2014. "Using Cash to Monitor Liquidity: Implications for Payments, Currency Demand, and Withdrawal Behavior," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 46(8), pages 1753-1786, December.
    13. Nan Li & Muzi Chen & Difang Huang, 2022. "How Do Logistics Disruptions Affect Rural Households? Evidence from COVID-19 in China," Sustainability, MDPI, vol. 15(1), pages 1-17, December.
    14. Payam MOHAMMAD ALIHA & Tamat SARMIDI & Fathin FAIZAH SAID, 2018. "Investigating The Impact Of Financial Innovation On The Volatility Of The Demand For Money In The United Stated In The Context Of An Arch/Garch Model," Regional Science Inquiry, Hellenic Association of Regional Scientists, vol. 0(1), pages 19-26, June.
    15. Schmidt-Dengler, Philipp & Stix, Helmut & Huynh, Kim P., 2014. "The Role of Card Acceptance in the Transaction Demand for Money," CEPR Discussion Papers 10183, Centre for Economic Policy Research.
    16. Andrea Mercatanti & Fan Li, 2017. "Do debit cards decrease cash demand?: causal inference and sensitivity analysis using principal stratification," Journal of the Royal Statistical Society Series C, Royal Statistical Society, vol. 66(4), pages 759-776, August.
    17. Agur, Itai & Ari, Anil & Dell’Ariccia, Giovanni, 2022. "Designing central bank digital currencies," Journal of Monetary Economics, Elsevier, vol. 125(C), pages 62-79.
    18. David Argente & Paula Gonzalez Alvarez & Esteban Méndez & Diana Van Patten, 2025. "Drivers of Digital Payment Adoption: Lessons from Brazil, Costa Rica, and Mexico," NBER Working Papers 34280, National Bureau of Economic Research, Inc.
    19. Tatjana Dahlhaus & Angelika Welte, 2024. "Payment habits during Covid-19: Evidence from high-frequency transaction data," IFC Bulletins chapters, in: Bank for International Settlements (ed.), Granular data: new horizons and challenges, volume 61, Bank for International Settlements.
    20. Brown, Martin & Hentschel, Nicole & Mettler, Hannes & Stix, Helmut, 2022. "The convenience of electronic payments and consumer cash demand," Journal of Monetary Economics, Elsevier, vol. 130(C), pages 86-102.

    More about this item

    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:bla:finmgt:v:54:y:2025:i:4:p:839-862. 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: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/fmaaaea.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.