Determinants of Trust in Banks’ Payment Services During COVID: An Exploration Using Daily Data

Michiel Bijlsma, Carin Cruijsen and Jester Koldijk
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Michiel Bijlsma: SEO Amsterdam Economics
Jester Koldijk: Tilburg University

De Economist, 2022, vol. 170, issue 2, No 2, 256 pages

Abstract: Abstract Trust in banks is key, especially in turbulent times. Using unique daily data for a representative panel of Dutch consumers, we examine to what extent the COVID-crisis has affected trust in banks’ payment services. We have the following main findings. First, COVID-19 measures have affected trust in banks’ payment services. The first lockdown increased narrow-scope trust (trust in consumers’ own bank payment services) and broad-scope trust (trust in banks’ payment services in general). The second lockdown decreased both notions of trust. The crisis measures impacted the trust of the elderly the strongest. Second, personal characteristics are significantly related to trust in banks’ payment services. For example, we find that both types of trust are increasing with digital literacy and the ease of getting by with income. Third, narrow-scope trust is higher than broad-scope trust. The gap between trust in the own bank and trust in banks in general is highest for customers of small banks.

Keywords: Trust in banks; COVID-19; Crises measures; Payments; Payment diary data (search for similar items in EconPapers)
JEL-codes: D12 E42 G21 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s10645-022-09405-9

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