The central bank has assessed the impact of the coronavirus epidemic last year on cash flow and payment habits. The experience is new a study Reported by Magyar Nemzeti Bank (MNB). The study is based on data from central bank data services, transaction data from local payment systems, Central Bank of Malaysia cash flow data, online cash register database containing NAV receipt information, and a retail survey questionnaire conducted in the fall of 2020.
People did not buy as much as they used to
As a result of the Covid-19 epidemic, the first (March-June) and second (August-December) emergencies were also characterized by measures with different structures to address the epidemic and support the sectors most affected by the virus. During these periods, the turnover of most payment methods decreased, low-value cash payments were the strongest, while the use of electronic payment methods became more common in many payment situations.
Due to general caution with travel and restrictions in place, there has also been a significant drop in payments made in person abroad. On the other hand, from a cash flow point of view, the clear winner for the protracted coronavirus epidemic has been online card payments, and the value of online purchases has increased dramatically, particularly in the local context, greatly outpacing the already significant expansion. In terms of card types, domestic credit card transactions declined to a much greater extent than moderately increased debit card payments.
|First quarter 2019||2019. II. quarter||2019. III. quarter||2019. IV. quarter||First Quarter 2020||2020. II. quarter||2020 III. quarter||2020. IV. quarter|
|Prepaid home purchases||21%||17%||19%||17%||13%||-4%||13%||6%|
|At actual dealers locally||21%||16%||17%||15th%||11%||-8%||11%||4%|
|Prepaid purchases abroad||27%||32%||31%||30%||22%||3%||-1%||6%|
|In actual dealers abroad||19%||21%||25%||22%||-15th%||-70%||-54%||-65%|
|Prepaid cash withdrawals at home||0%||-2%||-1%||0%||-6%||-24%||-8%||-14%|
|Withdrawal of cash cards abroad||6%||5%||2%||-5%||-15th%||-47%||-42%||-40%|
The coronavirus pandemic has also had a major impact on remittance flows. While the number of individual transfers used by households and businesses alike increased by 3 percent in 2020, group transfers (mainly wage payments and other regular transfers), and direct deductions used by residents (loan repayments, account payments) and the state treasury. The number of transactions sent (mainly corporate tax payments) decreased by 3-9 percent.
In the spot and spot systems, the number of small-value transfers (between 0-50 thousand HUF) has been much higher each spring since spring, 5-10 percent, compared to the same period in 2019. Based on this, it is believed that, given the epidemiological situation, Some of the previous low-value cash transactions may have been permanently redirected to the instant payment system that was launched in early March 2020, providing an ongoing payment service available to all customers from all banks.
The demand for electronic payment has increased in stores
Some purchases, including card payments, have been diverted from range under 5,000 HUF to higher-value domains, possibly due to changing shopping habits due to the virus. As a result of the coronavirus pandemic, residents are buying less, but spending more value afterward. Due to the increase in the limit for contactless payments without a PIN code to 15,000 HUF initiated by MNB, as well as consumer habits have changed and still persist as a result of the first wave of the epidemic, 91% of card transactions can be paid without a physical contact, which means about 30 points more coverage. Celsius as it would have been in the case of the 5000 HUF limit. This could also support the long-term use of electronic payments.
As a result of a larger decrease in cash payments and a more modest decline in card purchases, the share and value of electronic transactions also rose significantly within online cash register payments, with particularly strong increases in April, May and then December. Thus, 40 percent of the value of purchases on an annual basis was made electronically in 2020, and the percentage of card payments increased by 5 percentage points to 22 percent, which corresponds to the largest measurable annual growth since the existence of the online cash register database.
The percentage of card payments within Hungary has increased to varying degrees. In the first quarter, a growth of between 1 and 5 percentage points was observed in each region, and in the second quarter, which showed the highest growth, the annual change was between 5 and 8 percentage points. While the largest increase occurred in the first quarter in Budapest, in the other quarters it was usually observed in Pest County and Veszprim County. The ratio of cash payments changed to reverse the ratio of card payments.
More Lake Balaton, less than Adria: the SZÉP card is stored
With the lifting of government restrictions in the summer, the turnover of SZÉP cards used in the cafeteria system exceeded the values of the previous year each month, and the turnover of SZÉP cards increased by 100 percent in July and by 50 percent in August compared to the same period of the previous year.
According to a population survey conducted in the fall of 2020, more and more people are choosing electronic payments as a result of the Coronavirus pandemic, which is in line with our findings from various transaction databases. Nearly 40 percent of respondents indicated that they would often pay online in the future as a result of the coronavirus pandemic.
The coronavirus pandemic has had a two-way effect on cash demand over the past year. The demand for cash increased dramatically, particularly during the first wave of the epidemic in Hungary, while the cash use of transactions, that is, cash payments, fell sharply. This phenomenon was not unique to Hungary, but it was a feature of nearly all countries with developed economies in 2020.
At first, the Hungarians amassed money
In March 2020 – regarding the state of emergency ordered by the Hungarian government due to the first wave of the coronavirus pandemic – there was an exceptionally large cash flow from Magyar Nemzeti Bank for 8 business days, amounting to 250 billion Swiss francs, and a 5. 7 month increase Ordinary based on past trends. Answered. The initial severe period of the epidemic was followed by a major correction, with a significant drop in demand in April and May, and in the summer months most of the cash flow indicators reached or approached their previous values, and finally in the last third of another wave of 19 epidemics causing a further decline in the demand for cash. , Especially in December.
As a result of this volatility in demand, money in circulation increased from 6530 billion HUF to 7164 billion HUF in 2020 last year, which corresponds to an increase of 634 billion HUF, or 9.7 percent. At the same time, as we explained in the previous sections of our article, the number of cash payments has decreased dramatically during 2020 due to the decline in personal purchases and consumption due to epidemic restrictions and the popularity of electronic payments.
Thus, the intensive cash demand is not mainly created through the use of transactions during the epidemiological situation, but rather reflects the response of the population’s reserves due to the uncertain situation. International experience, as well as related research, confirms that in the event of social and economic crises, residents usually begin to accumulate more cash than usual, and treat cash as a kind of contingency reserve. This phenomenon has been present in most advanced economies, such as the Eurozone countries, the United States of America, Israel, the United Kingdom, Australia, Canada and the countries of our region in their own currency (the Czech Republic and Poland) since 2020. By assessing the above-mentioned processes, it can be said that the dynamic growth of electronic payments and the simultaneous expansion of holdings Cash are not two contradictory processes.
It is hoped that the online payment rate will continue to grow
In general, the demand for electronic payments has increased due to the epidemiological situation, in parallel with the dynamic expansion of monetary assets, but it will only be possible to quantify the growth observed in the long term. However, several factors are likely to increase the share of electronic payments.
On the other hand, from January 1, 2021, electronic payments should be available to all online cash registrars, which will allow customers to choose electronic payment methods instead of paying cash in tens of thousands of new stores.
On the other hand, in a way that is unique in the world, mandatory for all payment actors and thus available to all customers of all banks, instant payment since its launch in March 2020 can be a real alternative to cash payments in most payment situations.
In the last quarter of 2020, some banks have already introduced a pay-as-you-go service. During 2021, more and more banks and other payment service providers are expected to emerge with new payment services that will provide convenient, fast and low-cost electronic payment solutions for both individuals, businesses and merchants on a pay as you go basis. This is the case with the merchant side QR code generation app, which can be a new alternative to accepting electronic payment in addition to accepting cards.