COVID-19 and regional shifts in Swiss retail payments
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(2020) 156:14
Swiss Journal of Economics and Statistics
ORIGINAL ARTICLE
Open Access
COVID-19 and regional shifts in Swiss retail payments Sébastien Kraenzlin1, Christoph Meyer1* and Thomas Nellen2
Abstract This paper analyzes card payments to the retail sector in Switzerland during the COVID-19 crisis. We provide evidence on aggregate effects and regional shifts. Pronounced shifts—which persisted post-lockdown—can be observed from urban to suburban and rural areas and among cantons. Data allow us to identify directly two sources of shifts: “tourists and business travelers” and “e-commerce.” We indirectly identify additional sources: infection risk, lockdown measures, working from home, shopping tourism, and cash substitution. The COVID-19 crisis seems to have reinforced preexisting trends that may have faster than anticipated effects on the economy. Our analysis underscores the usefulness of real-time card payment data to inform policymakers. Keywords: COVID-19, Lockdown, Card payment data, Regional sale shifts JEL classification: E210, E420, E650, E710, R100
1 Introduction This paper documents the effects of the COVID-19 crisis on card payments to the retail sector in Switzerland. COVID-19 and related lockdown measures contributed to a substantial drop in such “retail payments.” Even before major lockdown, measures were lifted, retail payments started to rebound quickly, and soon rose far above pre-lockdown levels. We further provide evidence that regional shifts occurred in retail card payments across areas with different levels of urbanization and across the 26 Swiss cantons. Regional shifts exceed aggregate effects and have remained elevated despite two rounds of lockdown easing and the subsequent general increase in retail card payments. While aggregate effects are noteworthy and in need of explanation, documented regional shifts hint at structural changes that were accelerated by the outbreak of COVID19. If regional shifts are here to stay, the economy may face multifaceted effects long after COVID-19 restrictions * Correspondence: [email protected] The views expressed in this paper are those of the authors and do not necessarily represent those of the Swiss National Bank. 1 Swiss National Bank, Banking Operations, Börsenstrasse 15, CH-8022 Zurich, Switzerland Full list of author information is available at the end of the article
have ended. To mention just one potential impact, regional shifts may affect the rent and real estate value of retail locations. This raises two questions. First, which sources have contributed to the documented effects, and in particular to the regional shifts? Secondly, are these sources likely to be associated with permanent shifts in retail payments, or will they instead be temporary? We find direct evidence of shifts being associated with a canton’s dependence on “tourism and business travel” (as measured by payments made with cards issued by foreign financial intermediaries) and with its economy’s “e-commerce” intensity (as measured by cantonal cardnot-present paym
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