Abstract
Definitive and uncontroversial evidence is yet to emerge that the Covid-19
pandemic brought about a structural shift to a cashless economy in the retail payments
sector. In the short term, consumers increased their volume of digital and contactless
payments in response to lockdowns and beliefs that cash could spread the virus. However,
this has not resulted in a permanent reduction in the usage or elimination of banknotes
and coins. Moreover, there was a “cash paradox” in many countries, i.e., a decrease in the
demand of banknotes as means of payment and, simultaneously, a rise in its precautionary
demand of cash given consumers’ heightened uncertainty and the deterioration of
economic expectations.
pandemic brought about a structural shift to a cashless economy in the retail payments
sector. In the short term, consumers increased their volume of digital and contactless
payments in response to lockdowns and beliefs that cash could spread the virus. However,
this has not resulted in a permanent reduction in the usage or elimination of banknotes
and coins. Moreover, there was a “cash paradox” in many countries, i.e., a decrease in the
demand of banknotes as means of payment and, simultaneously, a rise in its precautionary
demand of cash given consumers’ heightened uncertainty and the deterioration of
economic expectations.
| Translated title of the contribution | The transformation in the use of cash and digital payments during the Covid-19 pandemic |
|---|---|
| Original language | Spanish |
| Article number | 1 |
| Pages (from-to) | 2-19 |
| Number of pages | 18 |
| Journal | Papeles de Economía Española |
| Volume | 170 |
| Publication status | Published - Dec 2021 |