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COVID-19 and the Search for Digital Alternatives to Cash

Author

Listed:
  • Rod Garratt
  • Michael Junho Lee

Abstract

Today, the majority of retail payments in the United States are digital. Practically all digital payments are tracked, collected, and aggregated by financial institutions, payment providers, and vendors. This trend has accelerated during the COVID-19 pandemic as payments that require physical contact, such as cash, have been discouraged. As cash gradually becomes obsolete, consumers are left with fewer alternatives for making private transactions. In this post, we outline some evidence on the impact of COVID-19 on consumer payment behavior and follow up in the second post in this Liberty Street Economics series with a look at the implications of cash obsolescence for privacy.

Suggested Citation

  • Rod Garratt & Michael Junho Lee, 2020. "COVID-19 and the Search for Digital Alternatives to Cash," Liberty Street Economics 20200928a, Federal Reserve Bank of New York.
  • Handle: RePEc:fip:fednls:88792
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    More about this item

    Keywords

    COVID-19; digital payments; cash; privacy;

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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