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Cash and Digital Payments After the Covid-19 Pandemic

Categories : Cash and Crises, Cash is the most widely used payment instrument, Costs of cash versus costs of electronic payment instruments
January 10, 2023
Tags : Card payments, Cash, CBDC, Covid-19, Digital payments
A new BIS working paper examines the impact of the Covid-19 pandemic on cash and digital payments. The data suggest some effects reversed once lockdowns eased and mobility rebounded.
Manuel A. Bautista-González

Ph.D. in U.S. History, Columbia University in the City of New York

Post-Doctoral Researcher in Global Correspondent Banking, 1870-2000 – Mexico and South America, University of Oxford

This post is also available in: Spanish

The Pandemic, Cash and Retail Payment Behaviour,” a new working paper by Raphael Auer, Giulio Cornelli, and Jon Frost, economists at the Bank for International Settlements (BIS), examines the impact of the Covid-19 pandemic on retail payments with a new “Future of Payments” database.

Database Construction

The database includes weekly or monthly data on cash, credit card payments, initiatives to develop central bank digital currencies (CBDCs), relevant internet searches, and digital payment apps’ use for up to 95 countries from September 2019 to June 2022.

Main Findings

The authors found that the Covid-19 pandemic led to an increase in internet searches for “cash and virus” in countries worldwide (Graph 1, left), most markedly in countries with more stringent lockdowns (Graph 1, right). These results update previous work from the BIS Bulletin 3 (2020).

Graph 1. Search Intensity of Relevant Terms and Lockdowns’ Stringency, 2019-2022

Notes: Shaded areas in the left panel indicate months since the outbreak of Covid-19 (December 2019). Source: Auer, Cornelli, Frost (2022: 3).

The volume of cash in circulation (Graph 2, left), contactless transactions (Graph 2, center), card-not-present payments (Graph 2, right), and payment app downloads increased with stringent lockdowns, albeit with significant heterogeneity across countries.

Graph 2. Cash in Circulation, Contactless Payments, and Card-Not-Present Payments, September 2019-June 2022

Notes: AEs: Advanced Economies. EMEs: Emerging Market Economies. Black vertical lines indicate March 11, 2020, when the World Health Organization (WHO) declared the Covid-19 outbreak a “public health emergency of international concern.” Source: Auer, Cornelli, Frost (2022: 3).


“Within countries, a key issue is disparity in access to payment instruments, with gaps in access to digital payments for unbanked and elderly customers. Any shift away from cash might have distributional ramifications. If cash is not widely accepted as a form of payment, it may create a ‘payments divide’ between those who have access to digital payments and those who do not. This, in turn, might have a particularly negative impact on unbanked and elderly clients.” – Auer, Cornelli, Frost (2022: 17).

Cash in circulation surged across 95 countries, with an average 10% year-on-year growth rate by 2020Q2 (Graph 3, left). By the end of 2021, the median ratio of cash in circulation to GDP reached 8% across the sample. Still, it fell slightly in 2022 (Graph 3, center). Internet searches for “ATM near me” dropped but rebounded by the end of the period (Graph 3, right).

Graph 3. Cash in Circulation and Searches for ATMs, September 2019-June 2022

Source: Auer, Cornelli, Frost (2022: 8).

Cash use at the point of sale (POS) has declined in advanced economies (see Graph 4). However, cash remains dominant as a payment instrument in most emerging markets, and the precautionary demand for cash increased worldwide during the pandemic.

Graph 4. Cash Use in Emerging Markets and Advanced Economies, 2010 and 2020

Source: Auer, Cornelli, Frost (2022: 10).

Digital Payments

“Uniform access to payment services is crucial in promoting equitable and sustainable development, and a precondition for international convergence of living standards. Despite significant progress on the financial inclusion objective, large portions of the population continue to be excluded from digital payments.” – Auer, Cornelli, Frost (2022: 17).

The share of card-present payments in card payments fell 20% from March 11 to April 13 before rebounding (Graph 5, left panel). The percentage of card-not-present payments rose by 18% in the acute phase of the pandemic. Still, it fell again as lockdowns ended (Graph 5, center panel). The share of contactless transactions rose in many countries but varied widely across countries (Graph 5, right panel).

Graph 5. Card Payments, September 2019-June 2022

Source: Auer, Cornelli, Frost (2022: 9).

Payment app downloads surged globally, particularly in January-March 2020 and 2021 (Graph 6, left). Weekly active use surged in India in November 2021, with a noticeable impact on the total. Within countries, downloads increased in the first months of the pandemic and early and late 2021 (Graph 6, center). Weekly active users grew more steadily (Graph 6, right).

Graph 6. Payment App Downloads and Use, September 2019-June 2022 

Source: Auer, Cornelli, Frost (2022: 10).


Access to [cash] alternatives is far from ubiquitous in many emerging market and developing nations where authorities have recently asked for more usage of digital payments. This might be a major argument in the future, calling for a stronger role for physical currency, and potentially calling for a digital complement for online transactions, i.e. a retail CBDC.” – Auer, Cornelli, Frost (2022: 17).

Work on central bank digital currencies (CBDCs) accelerated during the Covid-19 pandemic. Central bank speeches on CBDCs have increased and are more favorable (Graph 7, left). There were over 60 publicly announced CBDC projects by March 2021 (Graph 7, right).

Graph 7. CBDCs: Central Banks’ Speeches and Projects, September 2019-June 2022

Source: Auer, Cornelli, Frost (2022: 11).

Many central banks announced they were launching CBDC projects very close to March 2020, when the pandemic started (Graph 8, left). Based on internet searches, public interest in CBDCs has increased (Graph 8, right).

Graph 8. CBDCs: Retail Projects and Search Interest, September 2019-June 2022

Source: Auer, Cornelli, Frost (2022: 12).

This post is also available in: Spanish