COVID-19 Pandemic Increases the Divide Between Cash and Cashless Payment Users in Europe

6 Pages Posted: 8 Jul 2021 Last revised: 12 May 2022

See all articles by Radoslaw Kotkowski

Radoslaw Kotkowski

Nicolaus Copernicus University in Toruń

Michal Polasik

Nicolaus Copernicus University

Date Written: November 2, 2021

Abstract

This paper investigates how the COVID-19 pandemic has changed an important aspect of everyday life, viz. how people make payments. The empirical study is based on a survey of over 5000 respondents from 22 European countries. It shows that consumers who had been making cashless payments prior to the outbreak of the pandemic have been even more likely to do so since it broke out. On the other hand, the consumers who had mostly been paying in cash have often continued to do so. The divide between those who pay in cash and those who do not, therefore, seems to have widened during the pandemic. It may suggest financial inclusion issues. Additionally, we found that the probability of more frequent cashless payments as a result of the pandemic differs considerably between countries and therefore indicate the role of country-specific factors.

Keywords: COVID-19 pandemic, Cash, Cashless payments, Change in payment behaviour

JEL Classification: E41, E42, I12, I18

Suggested Citation

Kotkowski, Radosław and Polasik, Michal, COVID-19 Pandemic Increases the Divide Between Cash and Cashless Payment Users in Europe (November 2, 2021). Economics Letters, Vol. 209, December 2021, p. 110139, Available at SSRN: https://ssrn.com/abstract=3881062 or http://dx.doi.org/10.2139/ssrn.3881062

Radosław Kotkowski (Contact Author)

Nicolaus Copernicus University in Toruń ( email )

11 Gagarina Street
Torun, 87-100
Poland

Michal Polasik

Nicolaus Copernicus University ( email )

Gagarina 13A
Torun, 87-100
Poland
(0048) 56 611 4634 (Phone)

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