A study from Bank of Canada by Heng Chen, Walter Engert, Kim P. Huynh, Gradon Nicholls, Mitchell Nicholson and Julia Zhu.
Consumer spending declined significantly during the recent COVID-19 pandemic. This negative shock likely reduced spending across all methods of payment (cash, debit, credit, etc.). As well, the mix of payment methods that consumers use could also be affected. This paper is a first step in analyzing the effects of the pandemic on the demand for cash and on the methods of payment in Canada. We present insights drawn from the Bank Note Distribution System and from a recent survey conducted by the Bank of Canada in collaboration with our survey provider, Ipsos, and technical advice from Statistics Canada. We also plan to conduct follow-up surveys and analyses later in 2020 and in the first half of 2021. This work will help us assess whether any effects on demand for cash or the mix of payment methods used by consumers are transitory or persistent.