The paper investigates the changes in consumers' payment habits in Italy caused by the COVID-19 pandemic. We analyse indicators of payment card usage in place of cash and measures of the pandemic's intensity that capture the fear of infection and its impact on demand for payment instruments. We also evaluate the effect of the pandemic on the circulation of banknotes.
The pandemic has led to a greater use of cashless payment instruments, notably via e-commerce purchases and contact-less cards. In addition, we find an increase in the demand for cash for precautionary motives. Looking forward, digital payments would make the economy more resilient to adverse shocks. At the same time, ensuring the adequate and efficient availability of cash remains essential for the proper functioning of the economy and for social inclusion purposes.
