IDEAS home Printed from https://ideas.repec.org/a/eee/beexfi/v40y2023ics2214635023000643.html
   My bibliography  Save this article

Mobility restrictions and payment choices: The case of the Covid-19 pandemic

Author

Listed:
  • Carbó-Valverde, Santiago
  • Cuadros-Solas, Pedro J.
  • Rodríguez-Fernández, Francisco
  • Sánchez-Béjar, José Juan

Abstract

This paper examines the impact of the Covid-19 mobility restrictions on the payment choices at brick-and-mortar establishments. The asymmetries in the implementation of the Covid-19 mobility restrictions across the Spanish provinces serves as a quasi-natural experiment. The findings show that the severity of the mobility restrictions had an impact on payment choices. Individuals in areas with more stringent restrictions were less likely to use cash. The effect of the mobility restrictions on cash usage was larger among those with lower financial education. However, the severity of the mobility restrictions did not significantly affect the adoption of the most sophisticated digital payment methods like digital wallets. Consumer concerns about Covid-19 transmission through cash did not drive these results. Using a recent survey conducted in a post-pandemic context, where mobility restrictions have been lifted, the impact of mobility restrictions on cash usage has persisted. The main results hold after several robustness tests.

Suggested Citation

  • Carbó-Valverde, Santiago & Cuadros-Solas, Pedro J. & Rodríguez-Fernández, Francisco & Sánchez-Béjar, José Juan, 2023. "Mobility restrictions and payment choices: The case of the Covid-19 pandemic," Journal of Behavioral and Experimental Finance, Elsevier, vol. 40(C).
    • Handle: RePEc:eee:beexfi:v:40:y:2023:i:c:s2214635023000643
    DOI: 10.1016/j.jbef.2023.100850
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S2214635023000643
    Download Restriction: no
    File URL: https://libkey.io/10.1016/j.jbef.2023.100850?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. 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. Kotkowski, Radoslaw & Polasik, Michal, 2021. "COVID-19 pandemic increases the divide between cash and cashless payment users in Europe," Economics Letters, Elsevier, vol. 209(C).
    3. Klee, Elizabeth, 2008. "How people pay: Evidence from grocery store data," Journal of Monetary Economics, Elsevier, vol. 55(3), pages 526-541, April.
    4. Scott R Baker & Robert A Farrokhnia & Steffen Meyer & Michaela Pagel & Constantine Yannelis & Jeffrey Pontiff, 0. "How Does Household Spending Respond to an Epidemic? Consumption during the 2020 COVID-19 Pandemic," The Review of Asset Pricing Studies, Society for Financial Studies, vol. 10(4), pages 834-862.
    5. 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.
    6. Laato, Samuli & Islam, A.K.M. Najmul & Farooq, Ali & Dhir, Amandeep, 2020. "Unusual purchasing behavior during the early stages of the COVID-19 pandemic: The stimulus-organism-response approach," Journal of Retailing and Consumer Services, Elsevier, vol. 57(C).
    7. 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.
    8. Andrew D. Foster & Mark R. Rosenzweig, 2010. "Microeconomics of Technology Adoption," Annual Review of Economics, Annual Reviews, vol. 2(1), pages 395-424, September.
    9. Gene Amromin & Sujit Chakravorti, 2009. "Whither Loose Change? The Diminishing Demand for Small-Denomination Currency," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 41(2-3), pages 315-335, March.
    10. Josep Maria Raya & Claudia Vargas, 2022. "How to become a cashless economy and what are the determinants of eliminating cash," Journal of Applied Economics, Taylor & Francis Journals, vol. 25(1), pages 543-562, December.
    11. Heng Chen & Walter Engert & Marie-Hélène Felt & Kim P. Huynh & Gradon Nicholls & Daneal O'Habib & Julia Zhu, 2021. "Cash and COVID-19: The impact of the second wave in Canada," Discussion Papers 2021-12, Bank of Canada.
    12. Scott Schuh & Joanna Stavins, 2013. "How Consumers Pay: Adoption and Use of Payments," Accounting and Finance Research, Sciedu Press, vol. 2(2), pages 1-1, May.
    13. Scott Schuh & Joanna Stavins, 2016. "How Do Speed And Security Influence Consumers' Payment Behavior?," Contemporary Economic Policy, Western Economic Association International, vol. 34(4), pages 595-613, October.
    14. Ulf Kalckreuth & Tobias Schmidt & Helmut Stix, 2014. "Choosing and using payment instruments: evidence from German microdata," Empirical Economics, Springer, vol. 46(3), pages 1019-1055, May.
    15. Coibion, Olivier & Gorodnichenko, Yuriy & Weber, Michael, 2020. "The Cost of the COVID-19 Crisis: Lockdowns, Macroeconomic Expectations, and Consumer Spending," Department of Economics, Working Paper Series qt4jn1x65h, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    16. Sheth, Jagdish, 2020. "Impact of Covid-19 on consumer behavior: Will the old habits return or die?," Journal of Business Research, Elsevier, vol. 117(C), pages 280-283.
    17. Tamele, Barbora & Zamora-Pérez, Alejandro & Litardi, Chiara & Howes, John & Steinmann, Eike & Todt, Daniel, 2021. "Catch me (if you can): assessing the risk of SARS-CoV-2 transmission via euro cash," Occasional Paper Series 259, European Central Bank.
    18. Orkun Saka & Barry Eichengreen & Cevat Giray Aksoy, 2022. "Epidemic Exposure, Financial Technology, and the Digital Divide," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 54(7), pages 1913-1940, October.
    19. Sergei Koulayev & Marc Rysman & Scott Schuh & Joanna Stavins, 2016. "Explaining adoption and use of payment instruments by US consumers," RAND Journal of Economics, RAND Corporation, vol. 47(2), pages 293-325, May.
    20. 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.
    21. Aromi, Daniel & Bonel, María Paula & Cristia, Julian P. & Llada, Martín & Palomino, Luis, 2021. "Socioeconomic Status and Mobility during the COVID-19 Pandemic: An Analysis of Eight Large Latin American Cities," IDB Publications (Working Papers) 11312, Inter-American Development Bank.
    22. Tsai, I-Chun, 2022. "Changes in social behavior and impacts of the COVID-19 pandemic on regional housing markets: Independence and risk," Journal of Behavioral and Experimental Finance, Elsevier, vol. 35(C).
    23. M. M. Naeser Seldal & Ellen K. Nyhus, 2022. "Financial Vulnerability, Financial Literacy, and the Use of Digital Payment Technologies," Journal of Consumer Policy, Springer, vol. 45(2), pages 281-306, June.
    24. Jonker, Nicole & van der Cruijsen, Carin & Bijlsma, Michiel & Bolt, Wilko, 2022. "Pandemic payment patterns," Journal of Banking & Finance, Elsevier, vol. 143(C).
    25. Cohen, Michael & Rysman, Marc, 2012. "Payment Choice with Consumer Panel Data," Working Paper series 148348, University of Connecticut, Charles J. Zwick Center for Food and Resource Policy.
    26. 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.
    27. Francesca Caselli & Francesco Grigoli & Damiano Sandri & Antonio Spilimbergo, 2022. "Mobility Under the COVID-19 Pandemic: Asymmetric Effects Across Gender and Age," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 70(1), pages 105-138, March.
    28. David Bounie & Youssouf Camara & John Galbraith, 2022. "Consumer mobility and expenditure during the COVID-19 containments: Evidence from French transaction data," Post-Print hal-03861962, HAL.
    29. Liñares-Zegarra, José M. & Willesson, Magnus, 2021. "The effects of negative interest rates on cash usage: Evidence for EU countries," Economics Letters, Elsevier, vol. 198(C).
    30. Stavins, Joanna, 2018. "Consumer preferences for payment methods: Role of discounts and surcharges," Journal of Banking & Finance, Elsevier, vol. 94(C), pages 35-53.
    31. Tomasz Piotr Wisniewski & Michal Polasik & Radoslaw Kotkowski & Andrea Moro, 2021. "Switching from cash to cashless payments during the COVID-19 pandemic and beyond," NBP Working Papers 337, Narodowy Bank Polski.
    32. Taixing Liu & Beixiao Pan & Zhichao Yin, 2020. "Pandemic, Mobile Payment, and Household Consumption: Micro-Evidence from China," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 56(10), pages 2378-2389, August.
    33. Hakan Yilmazkuday, 2020. "COVID‐19 and unequal social distancing across demographic groups," Regional Science Policy & Practice, Wiley Blackwell, vol. 12(6), pages 1235-1248, December.
    34. 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.
    35. Raphael Auer & Giulio Cornelli & Jon Frost, 2020. "Covid-19, cash, and the future of payments," BIS Bulletins 3, Bank for International Settlements.
    36. Arango, Carlos & Huynh, Kim P. & Sabetti, Leonard, 2015. "Consumer payment choice: Merchant card acceptance versus pricing incentives," Journal of Banking & Finance, Elsevier, vol. 55(C), pages 130-141.
    37. Corinna Ghirelli & María Gil & Samuel Hurtado & Alberto Urtasun, 2021. "The relationship between pandemic containment measures, mobility and economic activity," Occasional Papers 2109, Banco de España.
    38. Eger, Ludvík & Komárková, Lenka & Egerová, Dana & MiÄ Ã­k, Michal, 2021. "The effect of COVID-19 on consumer shopping behaviour: Generational cohort perspective," Journal of Retailing and Consumer Services, Elsevier, vol. 61(C).
    39. Zhang, Yanying & Zhang, Gaiyan & Liu, Liuling & De Renzis, Tania & Schmiedel, Heiko, 2019. "Retail payments and the real economy," Journal of Financial Stability, Elsevier, vol. 44(C).
    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. Jonker, Nicole & van der Cruijsen, Carin & Bijlsma, Michiel & Bolt, Wilko, 2022. "Pandemic payment patterns," Journal of Banking & Finance, Elsevier, vol. 143(C).
    2. Justus Meyer & Federica Teppa, 2023. "Euro area consumers' payment behaviour and banking digitalisation," Working Papers 772, DNB.
    3. Kotkowski, Radoslaw & Polasik, Michal, 2021. "COVID-19 pandemic increases the divide between cash and cashless payment users in Europe," Economics Letters, Elsevier, vol. 209(C).
    4. 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.
    5. 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.
    6. 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, vol. 14(14), pages 1-18, July.
    7. 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.
    8. Carin van der Cruijsen & Marie-Claire Broekhoff, 2024. "Gender gaps in the world of payments," Working Papers 805, DNB.
    9. Arango, Carlos & Huynh, Kim P. & Sabetti, Leonard, 2015. "Consumer payment choice: Merchant card acceptance versus pricing incentives," Journal of Banking & Finance, Elsevier, vol. 55(C), pages 130-141.
    10. Tamás Briglevics & Scott Schuh, 2020. "This Is What's in Your Wallet...and Here's How You Use It," Working Papers 20-04, Department of Economics, West Virginia University.
    11. Michiel Bijlsma & Carin van der Cruijsen & Nicole Jonker & Jelmer Reijerink, 2021. "What triggers consumer adoption of CBDC?," Working Papers 709, DNB.
    12. Rajas Saroy & Sakshi Awasthy & Naveen K. Singh & Sonali M. Adki & Sarat Dhal, 2022. "The Impact Of Covid-19 On Digital Payment Habits Of Indian Households," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 25(Special I), pages 19-42, March.
    13. Santiago Carbó‐Valverde & Pedro J. Cuadros‐Solas & Francisco Rodríguez‐Fernández & José Juan Sánchez‐Béjar, 2024. "Digital innovation and de‐branching in the banking industry: Customer perception and satisfaction," Global Policy, London School of Economics and Political Science, vol. 15(S1), pages 8-20, March.
    14. Joanna Stavins, 2017. "How do consumers make their payment choices?," Research Data Report 17-1, Federal Reserve Bank of Boston.
    15. 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.
    16. Michiel Bijlsma & Carin Cruijsen & Nicole Jonker & Jelmer Reijerink, 2024. "What Triggers Consumer Adoption of Central Bank Digital Currency?," Journal of Financial Services Research, Springer;Western Finance Association, vol. 65(1), pages 1-40, February.
    17. Hartmann, Monika & Gijsel, Lola Hernandez-van & Plooij, Mirjam & Vandeweyer, Quentin, 2019. "Are instant payments becoming the new normal? A comparative study," Occasional Paper Series 229, European Central Bank.
    18. David Hao Zhang, 2016. "How do people pay rent?," Research Data Report 16-2, Federal Reserve Bank of Boston.
    19. Fujiki, Hiroshi & Tanaka, Migiwa, 2018. "How do we choose to pay using evolving retail payment technologies? Evidence from Japan," Journal of the Japanese and International Economies, Elsevier, vol. 49(C), pages 85-99.
    20. Jasmina Arifovic & John Duffy & Janet Jiang, 2017. "Adoption of a New Payment System: Theory and Experimental Evidence," Working Papers 171801, University of California-Irvine, Department of Economics.

    More about this item

    Keywords

    Covid-19; Payments; Mobility restrictions; Cash;
    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

    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:eee:beexfi:v:40:y:2023:i:c:s2214635023000643. 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: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/journal-of-behavioral-and-experimental-finance .

    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.