IDEAS home Printed from https://ideas.repec.org/p/dnb/dnbwpp/701.html
   My bibliography  Save this paper

Pandemic payment patterns

Author

Listed:
  • Nicole Jonker
  • Carin van der Cruijsen
  • Michiel Bijlsma
  • Wilko Bolt

Abstract

COVID-19 has temporarily changed the relative cost 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. For some, this may speed up the adoption of electronic payment methods, resulting in a permanent change in payment behaviour. Others will return to their preferred payment method once the influence of COVID-19 on our health and daily lives has faded away. Based on unique payment diary survey data collected among a representative panel of Dutch consumers, we study the shift in payment behaviour and payment preferences during the first phase of the COVID-19 pandemic. Since the start of the lockdown in the Netherlands the likelihood of debit card usage at the expense of cash has increased by 13 percentage points. About 60 percent of this shift has persisted seven months after the start of the pandemic in the Netherlands and appears to be longlived. Also, the pandemic has resulted in a shift in payment preferences towards more contactless payments. Both effects are largest for elderly people.

Suggested Citation

  • Nicole Jonker & Carin van der Cruijsen & Michiel Bijlsma & Wilko Bolt, 2020. "Pandemic payment patterns," DNB Working Papers 701, Netherlands Central Bank, Research Department.
  • Handle: RePEc:dnb:dnbwpp:701
    as

    Download full text from publisher

    File URL: https://www.dnb.nl/en/binaries/Working%20paper%20No.%20701_tcm47-391367.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. 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.
    2. 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.
    3. John Bagnall & David Bounie & Kim P. Huynh & Anneke Kosse & Tobias Schmidt & Scott Schuh, 2016. "Consumer Cash Usage: A Cross-Country Comparison with Payment Diary Survey Data," International Journal of Central Banking, International Journal of Central Banking, vol. 12(4), pages 1-61, December.
    4. Lola Hernandez & Nicole Jonker & Anneke Kosse, 2017. "Cash versus Debit Card: The Role of Budget Control," Journal of Consumer Affairs, Wiley Blackwell, vol. 51(1), pages 91-112, March.
    5. Simon, John & Smith, Kylie & West, Tim, 2010. "Price incentives and consumer payment behaviour," Journal of Banking & Finance, Elsevier, vol. 34(8), pages 1759-1772, August.
    6. Sébastien Kraenzlin & Christoph Meyer & Thomas Nellen, 2020. "COVID-19 and regional shifts in Swiss retail payments," Swiss Journal of Economics and Statistics, Springer;Swiss Society of Economics and Statistics, vol. 156(1), pages 1-20, December.
    7. Solnick, Sara J., 2007. "Cash and alternate methods of accounting in an experimental game," Journal of Economic Behavior & Organization, Elsevier, vol. 62(2), pages 316-321, February.
    8. Bolt, Wilko & Jonker, Nicole & van Renselaar, Corry, 2010. "Incentives at the counter: An empirical analysis of surcharging card payments and payment behaviour in the Netherlands," Journal of Banking & Finance, Elsevier, vol. 34(8), pages 1738-1744, August.
    9. Kosse, Anneke, 2013. "Do newspaper articles on card fraud affect debit card usage?," Journal of Banking & Finance, Elsevier, vol. 37(12), pages 5382-5391.
    10. A. Colin Cameron & Pravin K. Trivedi, 2010. "Microeconometrics Using Stata, Revised Edition," Stata Press books, StataCorp LP, number musr, March.
    11. Frank van der Horst & Ester Matthijsen, 2013. "The irrationality of payment behaviour," DNB Occasional Studies 1104, Netherlands Central Bank, Research Department.
    12. Heng Chen & Walter Engert & Kim Huynh & Gradon Nicholls & Mitchell Nicholson & Julia Zhu, 2020. "Cash and COVID-19: The impact of the pandemic on demand for and use of cash," Discussion Papers 2020-6, Bank of Canada.
    13. Khan, Jashim & Belk, Russell W. & Craig-Lees, Margaret, 2015. "Measuring consumer perceptions of payment mode," Journal of Economic Psychology, Elsevier, vol. 47(C), pages 34-49.
    14. Nicole Jonker, 2007. "Payment Instruments as Perceived by Consumers – Results from a Household Survey," De Economist, Springer, vol. 155(3), pages 271-303, September.
    15. Stavins, Joanna, 2018. "Consumer preferences for payment methods: Role of discounts and surcharges," Journal of Banking & Finance, Elsevier, vol. 94(C), pages 35-53.
    16. José González Mínguez & Alberto Urtasun & Miguel Pérez García de Mirasierra, 2020. "Consumption in Spain during the state of alert: an analysis based on payment card spending," Economic Bulletin, Banco de España, issue 3/2020, pages 1-14.
    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. 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).

    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. Nicole Jonker & Mirjam Plooij & Johan Verburg, 2015. "Does a public campaign influence debit card usage? Evidence from the Netherlands," DNB Working Papers 470, Netherlands Central Bank, Research Department.
    2. Nicole Jonker & Mirjam Plooij & Johan Verburg, 2017. "Did a Public Campaign Influence Debit Card Usage? Evidence from the Netherlands," Journal of Financial Services Research, Springer;Western Finance Association, vol. 52(1), pages 89-121, October.
    3. Carin Cruijsen & Frank Horst, 2019. "Cash or Card? Unravelling the Role of Socio-Psychological Factors," De Economist, Springer, vol. 167(2), pages 145-175, June.
    4. Bruno Karoubi & Régis Chenavaz & Corina Paraschiv, 2016. "Consumers’ perceived risk and hold and use of payment instruments," Applied Economics, Taylor & Francis Journals, vol. 48(14), pages 1317-1329, March.
    5. 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.
    6. 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.
    7. 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.
    8. Lola Hernandez & Nicole Jonker & Anneke Kosse, 2017. "Cash versus Debit Card: The Role of Budget Control," Journal of Consumer Affairs, Wiley Blackwell, vol. 51(1), pages 91-112, March.
    9. Tobias Trütsch, 2016. "The impact of mobile payment on payment choice," Financial Markets and Portfolio Management, Springer;Swiss Society for Financial Market Research, vol. 30(3), pages 299-336, August.
    10. John Bagnall & David Bounie & Kim P. Huynh & Anneke Kosse & Tobias Schmidt & Scott Schuh, 2016. "Consumer Cash Usage: A Cross-Country Comparison with Payment Diary Survey Data," International Journal of Central Banking, International Journal of Central Banking, vol. 12(4), pages 1-61, December.
    11. Carin van der Cruijsen & Mirjam Plooij, 2015. "Changing payment patterns at point-of-sale: their drivers," DNB Working Papers 471, Netherlands Central Bank, Research Department.
    12. Agnieszka Huterska & Anna Iwona Piotrowska & Joanna Szalacha-Jarmużek, 2021. "Fear of the COVID-19 Pandemic and Social Distancing as Factors Determining the Change in Consumer Payment Behavior at Retail and Service Outlets," Energies, MDPI, Open Access Journal, vol. 14(14), pages 1-18, July.
    13. Naoki Wakamori & Angelika Welte, 2017. "Why Do Shoppers Use Cash? Evidence from Shopping Diary Data," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 49(1), pages 115-169, February.
    14. 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.
    15. Carin van der Cruijsen & Mirjam Plooij, 2018. "Drivers Of Payment Patterns At The Point Of Sale: Stable Or Not?," Contemporary Economic Policy, Western Economic Association International, vol. 36(2), pages 363-380, April.
    16. Jacek Pietrucha & Grzegorz Maciejewski, 2020. "Precautionary Demand for Cash and Perceived Risk of Electronic Payments," Sustainability, MDPI, Open Access Journal, vol. 12(19), pages 1-25, September.
    17. Yulia Titova & Delia Cornea & Sébastien Lemeunier, 2021. "What Factors Keep Cash Alive in the European Union?," De Economist, Springer, vol. 169(3), pages 291-317, August.
    18. Esselink, Henk & Gijsel, Lola Hernandez-van, 2017. "The use of cash by households in the euro area," Occasional Paper Series 201, European Central Bank.
    19. Carlos Arango & Yassine Bouhdaoui & David Bounie & Martina Eschelbach & Lola Hernández, 2013. "Cash Management and Payment Choices: A Simulation Model with International Comparisons," Staff Working Papers 13-53, Bank of Canada.
    20. Michiel Bijlsma & Carin van der Cruijsen & Nicole Jonker, 2020. "Consumer propensity to adopt PSD2 services: trust for sale?," DNB Working Papers 671, Netherlands Central Bank, Research Department.

    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

    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:701. See general information about how to correct material in RePEc.

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

    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: Richard Heuver (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 hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.