Changes in Payment Patterns in Hungary During the Pandemic

FANNI FARKAS

Department of Digitalization Policy and Regulatory

Central Bank of Hungary

1013 Budapest, Krisztina körút 55.

HUNGARY

CSERNE PANKA PÓTA

Faculty of Economics and Business, Institute of Accounting and Finance

University of Debrecen

138. Böszörményi Sreet, 4032 Debrecen

HUNGARY

PATRÍCIA BECSKY-NAGY

Faculty of Economics and Business, Institute of Accounting and Finance

University of Debrecen

138. Böszörményi Sreet, 4032 Debrecen

HUNGARY

Abstract: In the field of digital payments, the pandemic has brought digitalisation to layers of society that

would not have been reached for years or even decades. In our study, after defining the different electronic

payment options, we compare four market surveys in Hungary to investigate the extent to which the

respondents' knowledge of electronic payments has changed, and how the use of cash substitutes and payment

habits have changed due to the forced digitalisation caused by the pandemic. The results of our survey show

that significantly more Hungarian residents are familiar with electronic payment solutions than in 2019, but a

significantly higher proportion of respondents still do not manage their finances online. Most people are used to

paying with cash and therefore do not turn to modern payment solutions. The pandemic as a forcing factor and

the response of central and state measures have led society to make a significant step towards greater use of

digital payment systems in 2020, and in 2021, this trend is expected to stagnate, not to fall back to the pre-virus

situation. We found that government interventions and campaigns to support the positive processes that have

been set in motion could help digital solutions to spread.

Keywords: FinTech, pandemic, digital payment, mobile payment, financial awareness, financial culture.

Received: July 22, 2021. Revised: February 26, 2022. Accepted: April 2, 2022. Published: April 29, 2022.

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1 Introduction

Digitalisation has become a cornerstone of the 21st

century, permeating every aspect of our lives. It

affects our daily lives, our habits, and almost no

one can avoid being connected to the digital world

in some way. One of the most innovative and

emerging sectors of the economy is the availability

of electronic payment, offering many positive

benefits beyond replacing cash. It can make

shopping more convenient, the payment of utility

bills faster, and it can also make our spending

easier to track. The latter can also have an

economy-whitening effect.

However, in 2020 these electronic payment options

became more important than ever. This year was a

year of upheaval for all of us, as the Covid-19

pandemic - its outbreak our country was in March

2020 - required unprecedented measures to be put

in place in countries around the world. The

pandemic forced tens of thousands of people to stay

at home, workplaces and schools had to close.

Domestic businesses moved their operations to the

online space if they could, but even so, 47% had to

survive the period with significantly reduced

revenues [11]. Nevertheless, these events have

given an unprecedented boost to the development

and rapid spread of digitalisation. The need to work

and study at home and the collective defence have

brought the digital revolution to segments of

society that might not have been informed even

after many years or decades.

The present study seeks to explore whether the

recent measures have had a significant impact on

the payment habits of the Hungarian population and

whether the use of cash substitutes has increased

compared to the pre-pandemic period. By

comparing four market surveys in Hungary, the

study investigates the extent to which respondents'

knowledge of electronic payments has changed and

whether they prefer to do their financial

transactions online. The period under review is

from May 2019 to May 2021, which means that the

most up-to-date research data is included and

processed.

In our literature review, we will briefly describe the

different categories and functions of electronic

payment options and the conditions of their use so

that the concepts used in our research are clear to

all readers. Through the work of well-known and

respected researchers in the field, our paper will

describe the capabilities and functioning of digital

payment solutions. We will focus on the different

types of d cards, followed by online payment

methods, and finally, we will look at the various

definitions of mobile payments.

Our research examines the results of the surveys

already mentioned. These market surveys were

made available to us by the Electronic Payment

Service Providers Association.

2 Literature Review

The literature review of our study categorises and

lists the different electronic payment options. It

starts with the more traditional debit cards

emerging previously, followed by more modern

online payment solutions, and finally mobile

payment options.

Enhanced digitalization processes on the financial

solutions market have been accelerated by the

pandemic [14]. The global digitalisation process

has also forced incumbents to innovate, as they

have had to compete or even collaborate with

emerging FinTech players to maintain their

position in the market. Due to this pressure,

traditional channels are also becoming increasingly

digitised, and digital payment and banking options

are becoming more widely available to consumers

[13].

2.1 Debit Cards

The debit card is an umbrella term used to describe

a variety of different types and functions of

electronic payment cards. A summary of their types

is shown in Figure 1.

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Fig. 1: Classification of bank card types (Authors’ development; based on [12])

As shown in the figure, there are several ways to

group debit cards. Among these, debit cards, credit

cards and prepaid cards are mentioned in our

research.

The debit card, the most widely used and best-

known cash substitute in the world –in everyday

language known as a bank card – already existed in

the 1960s. A plastic card with a magnetic stripe -

nowadays more commonly with a chip - can be used

to carry out payment transactions related to a bank

account according to international standards [15;

16].

The classic credit card is backed by a credit limit

provided by the bank, based on a pre-contractual

agreement. With credit card purchases, the time of

purchase and the actual payment is separated, which

is why many people prefer this type of payment

method, as it can be used even if they do not have

enough money on hand at the time. Under the terms

of a credit card contract with a bank, the user does

not have to pay interest if he repays the required

amount by a specified date under predetermined

conditions [15].

Pre-paid cards are not very common these days. In

this case, the cardholder top-ups the card with a sum

of money, which then can be used freely later, just

like an electronic purse [15]. Who and under what

conditions can apply for this type of card can vary

from provider to provider, but it is usually limited.

2.2 Online Payment Solutions

Online payment solutions have overtaken mobile

payment systems in time. Online payments occur

when we use any digital device that can access the

internet to manage our finances through our

browser, the World Wide Web. This may include

the use of internet banking, online transfers and

other online payments [4].

In the case of an internet bank, the user does not

need any special software, just access to the internet

and a web browser to access their bank's website

from anywhere in the world. You can access a large

proportion of the services offered by the bank,

usually more than in the case of a mobile bank on

this interface, by entering the necessary identifiers

[1]. When logging in to a NetBank, banks may ask

you to enter at least three, but up to several

identifiers, such as an account number, ID and

password. There is a possibility that the customer

has to participate in multi-factor authentication, i.e.,

they have to verify that they want to log in to the

account via another device. It can be done via a

mobile phone with a code received in an SMS, a

mobile bank with a QR code, or even with a token

issued for this purpose [15]. Another security

feature is the time limit, which automatically logs

you out of the site after a certain period of

inactivity, so you cannot accidentally stay logged in.

In addition, several features are built into internet

banks to enhance security, such as regular password

changes or blocking after multiple failed logins [1].

Online transfers most often occur when using e-

commerce. After confirming the purchase on the

trader's website, you will be redirected to the bank's

website, where you can make the transfer after

entering the necessary information. From a security

point of view, this payment method is more popular

than, for example, online card payments, as the full

authorisation is done via the bank's website. The

introduction of online payments is also an attractive

option for traders, as it is cost-effective - they do not

Debit cards

By the user

Retail or

private

Business or

corporate

Usability

level

Pre-paid

Debit

card

Credit

card

Charge

card

Multifunctional

Special

issuance

Dual-

branded

Sponsor

appearance

Embossed

Electronic

By data storage

method

Magnetic

striped

Equipped

with chip

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need an online POS system and do not have to pay

transaction fees [10].

A similar payment solution is online card payment,

where the POS terminal in physical shops is

replaced by a digital version. This option was a less

popular payment solution in Hungary in the early

2000s, as providing debit card details made

shoppers distrustful, and they preferred to avoid

online card payments. Our study shows that

consumers' views have changed at present.

2.3 Mobile Payment Options

Mobile payment (also known as m-payment), like

debit cards, is an umbrella term, and not everyone

agrees on its exact definition. Some consider mobile

payment to be any transaction that is carried out

using a mobile device [9; 3]. In contrast, others

consider mobile payments when making a payment

on our mobile phone using an application or

software [2; 4].

The literature groups these options in several ways.

Some categorise the process according to the service

provider (manufacturer, bank, telecom, and card

service provider) or even whether the payment

requires presence (Near Field Communication) or

not (phone bill debit or mobile wallet) [15; 2].

Table 1. summarises the features and conditions of

the different electronic payment options.

Table 1. Summary of characteristics of electronic payment solutions (Authors' development based on literature

research)

Are we

using

our

own

money?

Is a bank

account

required?

Internet

access

acquired

to use it?

Is an ID

required

to use it?

Is a special

application/software

acquired?

When is

the actual

payment

made?

Deposit

card

Yes

Not in

every

case

Immediately

Debit card

Not

necessarily

Not in

every

case

Later

Pre-paid

card

Yes

Not in

every

case

Before use

Internet

bank

Yes

Mobile

bank

Yes

Transfer

Yes

Not necessarily

Immediately

Online

debit card

Yes

Immediately

SMS-based

payment

Yes

Later

Mobile

application

Yes

Not in

every

case

Yes

Immediately

Virtual

wallet

Not in

every

case

Yes

Not in

every

case

Yes

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Literature sources reveal that most payment options

use our own money rather than the resources of

financial service providers, and they usually require

a bank account. A small proportion of electronic

payments require access to the internet, but you

almost always need to provide an ID. In most cases,

you do not need to install a separate application or

software.

3 Methodology and Data

The present study is based on the results of the

market surveys mentioned above. So far, the so

called EFISZ (Electronic Payment Service

Providers) Association has conducted four large-

scale, representative surveys: in September 2019

[5], in May 2020 [6], September 2020 [7] and in

June 2021 [8] to find out the opinions and

knowledge of the Hungarian population about

electronic payment solutions and services.

The aim of our study was to compare the results of

the four surveys and draw conclusions about the

changes that occurred during the pandemic. Our

innovative approach is what makes this paper

unique – we not only show our readers the latest

state, but comparing the data of the examined years

we also investigate the changes in the digital

payment habits since the wake of the pandemic as

an added value to the original research. At the end

of the article, we look at the potential for the further

expansion of digital payment solutions and seek to

make some suggestions.

The background and methodology of the research

are illustrated in Table 2.

Table 2. Background and methodology of the EFISZ research (Authors’ development based on [5; 6; 7; 8])

First survey

Second survey

Third survey

Fourth survey

Method of

data

collection

by asking 2000

people

personally,

15-minute

questionnaire,

by Telephony

Application

Programming

Interface (TAPI)

method

by asking 1000

people

personally, and

using a 20-

minute

questionnaire,

by Computer-

Assisted

Telephone

Interviewing

(CATI) method

by asking 1000

people personally,

and using a 25-

minute

questionnaire,

by Computer-

Assisted Telephone

Interviewing

(CATI) method

by asking

altogether 1600

people

personally, and

using a 25-

minute

questionnaire, by

Computer-

Assisted

Telephone

Interviewing

(CATI) method

Target

group

Hungarian

population aged

and over

Hungarian

population aged

18 and over

Hungarian

population aged 18

and over

Hungarian

population aged

18 and over

living outside the

capital and the

county capitals,

with 1000

respondents

("rural sample"),

and in six

selected towns

(Balassagyarmat,

Balatonfüred,

Sátoraljaújhely,

Sopron,

Szentendre,

Szentes) and

Hungarian

population aged

18 and over with

600 respondents

("rural town

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sample")

Time of

data

collection

May 2019

May - June 2020

September -

October 2020

May 2021

As shown in the table, the data used in our study

was collected by EFISZ using simple random

sampling methodology. The sample used in the

surveys is representative of the population aged 18

and over by gender, age, educational attainment,

type of settlement, region, according to the 2011

census, and it is representative in terms of the

sample size used. Among the residents of the

households randomly selected for sampling, the so-

called birthday method was used – an adult member

of the household whose day of birth the closest was,

was asked to respond.

The fourth, 2021 survey was carried out on 1600

people, of whom 1000 represent the "rural sample"

and 600 the "rural-urban sample". In the former

case, the survey was carried out among people

living in the capital and outside the county capitals,

and in the latter case, in six selected cities

(Balassagyarmat, Balatonfüred, Sátoraljaújhely,

Sopron, Szentendre, Szentes). For this reason, the

fourth survey was treated in a unique way, as it does

not measure Budapest and the county capitals

compared to the first three. In some cases, the

results of these two survey samples were presented

separately, and in other cases, the weighted

arithmetic average was used to calculate the data for

a sample of 1600 people – we inform the reader

about that each time in our study. Although the

results of the rural survey are only comparable to a

limited extent with the results of the first three

surveys, it is useful to highlight the difference

between the digital financial skills and habits of

more developed and less developed areas of the

country.

4 Research Results

During the period under review, there has been a

significant increase in the number of digital

payment devices in households, which has a positive

impact on the uptake of electronic payment

solutions, increasing the availability of platforms.

All surveys have clearly shown that the vast

majority of households have a bank card, reaching

85% by September 2020, 10% more than in 2019.

The availability of smartphones has also been on the

rise, with 84% of respondents having at least one in

2020. In both cases, the change is around 10%, and

in 2021 we see a minimal decrease (below 5%)

compared to the previous period. A similar pattern

can be observed for laptops - the number of

households with a laptop increased by 14% between

May 2019 and September 2020. These data listed

here confirm that from spring 2020, the pandemic

has led to a sharp increase in the need for

digitisation, with most jobs that have been able to do

so switching to working from home, often with a

laptop or even a smartphone. Education has also

continued in digital form, creating a need to make

up for the lack of smart devices in households with

students and teachers.

For bank savings, the difference is significant: while

in 2019, only 21% of respondents had some savings,

in autumn 2020, 52% had some savings. The

proportion of people with life insurance has doubled

between 2019 and 2021: from only 27% in the first

survey, half of the people can now say they have life

insurance. Given the impact of the pandemic and the

uncertainty, people have therefore adopted a more

cautious financial approach than before and have

tried to prepare for the unexpected with both savings

and insurance.

The research shows that the vast majority of

respondents - more than 80% - have a fixed or

satellite internet subscription at home. This figure

was 68% in the first survey, so real and rapid

growth can be observed in this area. However, it is a

surprising fact that in 2021 in Hungary,

approximately 20% of the survey respondents still

do not have internet access at home. In the future,

government involvement is essential to ensure

internet access for the population.

Respondents prefer to use their mobile phone for

internet access in all four surveys. It is clear that

most people connect to the internet every single day,

for an average of 3-4 hours, generally for browsing

social media and various news portals. All adults

now have a mobile phone for personal use, but a

quarter of phones are not suitable, and a further 10%

of owners do not use the internet with them. This

raises the question of whether, even if 20-30% of

Hungarians do not have any internet access in 2021,

there is still a chance to integrate them into the

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digital ecosystem, and if so, by what means (this

will be examined later in the study).

Of those who use the internet with some frequency,

the majority use it to keep in touch (e.g., social

media) and read the news, and merely a few people

use it to deal with a service provider. In this issue,

special emphasis should be placed on the

management of banking and finance (Figure 2).

Fig. 2: Frequency of internet usage for banking and financial management (Authors’ development based on [6;

7; 8])

Note: No 2019 data were available for this question. Weighted average calculated for 2021 data based on the

"rural sample" and the "rural-urban" sample.

The comparison of the three periods reveals that the

proportion of people who never use the internet for

banking or managing their finances fell significantly

from 45% at first to 31% in September 2020. In

2021, however, we can again see figures above

40%, showing that the pandemic was able to

temporarily shift some people's banking to digital

channels, but this has not proven to be a lasting

shift.

In contrast, significantly more people were aware of

different payment options during the pandemic than

before (Figure 3).

Fig. 3: Knowledge of the different payment methods (Authors’ development based on [5; 6; 7; 8])

1,5%

12,5%

10%

12%

17%

13%

10,5%

15%

12%

17%

14%

2,5%

42%

31%

45%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2021

Autumn 2020

Spring 2020

several times a day daily several times a week weekly several times a month monthly rarely never DK/DA

16%

26%

42%

48%

60%

67%

81%

82%

98%

23%

34%

55%

58%

70%

74%

83%

87%

99%

12%

24%

44%

52%

65%

72%

78%

80%

98%

10%

15%

27%

25%

35%

51%

67%

58%

98%

0% 20% 40% 60% 80% 100%

other

prepaid card

virtual wallet

mobile parking

mobile payment

online debit card payment

transfer

credit card payment at a terminal by swipe

credit card payment by touch

cash

2019 Spring 2020 Autumn 2020 2021

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Note: weighted average calculated for 2021 data

based on the "rural sample" and the "rural-urban"

sample

The best-known payment method is clearly cash.

This is followed by a bank card (debit or credit card)

payment by terminal tap or swipe. The knowledge

of contactless payment among respondents

increased significantly over the studied period,

almost by 30%. The number of people who knew

how to pay by bank transfer also increased

significantly, by 20% by autumn 2020, after which a

slight decline is seen in 2021. The biggest change

took place in online payment by debit card, which

increased from 34% to 70%, i.e., the percentage of

people who know this method doubled between the

first and third surveys and then fell again. The

knowledge of mobile payments also changed

significantly, with 33% more people with

knowledge of mobile payments in autumn 2020 than

in spring 2019. The prepaid card is the least known

payment option among the respondents, but it did

not play a major role during the pandemic, as it can

be used for venues, for example.

In addition to the mass adoption of payment

solutions, many more people are using them than

before the pandemic. Table 3. summarises the

proportions of users of each payment method (the

base is the number of people who are already

familiar with the payment method).

Table 3. Use of different payment methods among those who know them (Authors’ development based on [5;

6; 7; 8])

First survey

Second

survey

Third survey

Fourth

survey

cash

(N1=1960, N2=985, N3=986,

N4=1573)

96%

98%

90%

92%

debit card payment by

terminal-touch

(N1=1166, N2=804, N3=866,

N4=1310)

62%

79%

82%

77%

debit card payment by

terminal swipe

(N1=1332, N2=779, N3=826,

N4=1291)

57%

66%

62%

63%

online bank card payment

(N1=688, N2=645, N3=701,

N4=958)

36%

58%

62%

61%

transfer

(N1=1018, N2=719, N3=743,

N4=1075)

41%

71%

72%

68.5%

mobile parking

(N1=540, N2=437, N3=554,

N4=667)

29%

46%

47%

43%

mobile payment

(N1=491, N2=518, N3=579,

N4=763)

19%

40%

36%

37%

virtual wallet

(N1=294, N2=238, N3=337,

N4=417)

13%

34%

29%

28%

pre-paid card

(N1=204, N2=232, N3=204,

N4=257)

14%

25%

21%

22%

other (N2=8, N3=23, N4=20)

28%

22%

NA (N1=2000, N2=1000,

N3=1000)

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Since mid-April 2020 in Hungary, you only need to

enter your PIN code for amounts over HUF 15.000

(before that it was HUF 5.000) when paying by

touch at a POS terminal. This made shopping even

faster, safer, and more convenient from an

epidemiological point of view. Around the same

time the government announced that all online cash

registers had to be accompanied by an electronic

payment solution from 2021 – this announcement

has added to the range of digital payment options

available at most shops in the country. These central

actions made the use of the digital payment methods

more convenient and attractive.

The results can confirm it: 82% of respondents use

their debit card by touch in everyday life with a

significant increase of 20% over the survey period.

The number of people using a debit card for online

payments increased by 26%, with almost two thirds

of respondents using it in autumn 2020. The most

significant change can be seen in the case of

transfers, with 31% more people using them in the

third survey than in the first. One reason for this

significant increase is the introduction of the Instant

Payment System on 2 March 2020 – which was

introduced at a particularly fortunate date, before the

epidemic - which, due to its speed and new options,

has become an attractive form of payment for more

people, replacing the immediate cash payment

solution at one of its most significant previous

advantages.

Mobile parking, mobile payments and virtual

wallets are used by less than half of the respondents;

for the latter two with a presumable decrease

between the second and third surveys, as is the case

for prepaid cards. In the case of mobile parking, it is

worth mentioning that from April 2020 to May

2021, the government decree did not require

payment for parking in Hungary, so this also

affected the use of the applications created for this

purpose. With the end of the epidemic, the

possibility of mobile parking has re-emerged, but no

longer in the form of state involvement but through

solutions from FinTech players. In all cases, there

was no significant change in spring 2021 compared

to autumn 2020, but rather a stagnation of the

previous rates.

One cannot overlook the fact that almost every

Hungarian uses cash in everyday life since it is the

one payment method that is accepted everywhere

nationwide. We will further examine the reasons of

cash-usage in a later point of the study.

When asking about online payments we found that

most people prefer to use the electronic payment

service provided by their bank. In general, more of

the population trusts the services provided by

incumbents rather than FinTech companies. To

enable customers to bank conveniently from

anywhere using their smart devices, banks are

offering internet banking and mobile banking

services. However, the study of these options shows

that there is a significant number of people who do

not have these solutions: although the trend is

decreasing, a third of people do not have the digital

solution for net banking and a half for mobile

banking. But for those who do use them, the

solutions are mostly used to transfer money and

check their balance, based on the results of all

surveys.

In addition to the use of different payment methods,

the present study also looked at the reasons why

people do not use digital payment options.

According to the survey, the largest proportion of

respondents - two-thirds of people in the second

survey - pay cash out of habit. This rate has fallen to

58% in the "rural" as well as "rural-urban" samples

by spring 2021, but it is still by far the most

common reason. The biggest change is in the case of

complex use, with the number of people who do not

use electronic payment solutions for this reason

falling by almost 20% (from 30% to 11%) by 2020.

In 2021, in the "rural sample", the proportion is

higher at 18%, so even more people in rural areas

will find digital payments difficult. There was also a

significant reduction in the number of people who

choose not to do so because of a lack of information

or high costs. The number of people who did not

consider electronic payments to be secure also fell

sharply.

It raises the question of what measures would make

respondents start to use or make more use of

electronic payment solutions. There was no change

in the opinion among respondents that they would

prefer to use modern payment solutions if more

secure systems were introduced, and that more

extensive information and simplification of systems

could also influence users' payment habits.

However, 15% in the third survey said that no

matter what changes were introduced to payment

solutions, they would not switch to them. In 2021,

the same figure for the "rural sample" was 27% -

i.e., more than a quarter of rural residents do not feel

that any measure could influence them to change

their payment behaviour.

The pandemic has had a major impact on all aspects

of our lives, and the state decisions that have been

taken have affected our daily lives. Thus, the study

also examined separately the extent to which the

population changed their payment habits,

specifically after the outbreak of Covid-19 in

Hungary (Figure 4).

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DOI: 10.37394/23207.2022.19.93

Fanni Farkas, Cserne Panka Póta,

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Fig. 4: Preference of electronic payments during the pandemic (Authors’ development based on [6; 7; 8])

Note: weighted average was calculated for 2021

Since the outbreak of the epidemic, the number of

people trying to pay electronically whenever they

can, has been growing. By 2021, almost 40% of

those affected by the pandemic-induced forced

digitalisation has been paying more digitally than

before. The proportion of those who have not

changed their habits has decreased, with the same

frequency of digital payments as before the

pandemic outbreak. In general, a quarter of people

said they would not pay electronically at all, even

in this unprecedented situation. Here in 2021, the

"rural sample" was 31%, slightly higher than the

"rural-urban sample" (21%).

In all three surveys, 18-29-year-olds are the age

group most likely to try to use a cash substitute in

the majority of cases, whenever possible. Almost a

half of the over-60s (49%) do not use electronic

payment methods at all or use them even less often

since the pandemic began than before, but this

figure fell by 10% by autumn 2020.

In terms of education level, both in spring and

autumn, respondents with higher education tend to

avoid using cash as much as possible.

In order to further spread awareness of electronic

payment options, it is important to know how

people learn about these solutions and where they

get their information. The answers to this question

are shown in Figure 5.

27%

33%

11%

25%

19%

43%

13%

22%

25%

33%

12%

23%

0% 10% 20% 30% 40% 50%

DK/DA

I do not pay electronically at all

No, since then I have paid less often by electronic means

No, before that I paid electronically with the same

frequency

Yes, in most cases, I pay electronically

Yes, I have been paying electronically whenever possible

Spring 2020 Autumn 2020 Spring 2021

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Fig. 5: Way of gaining knowledge on electronic payment methods (Authors’ development based on [5; 6; 7; 8])

It is clear that people are becoming more and more

familiar with digital payment options through their

family and friends at all times, this is how the new

information is spreading the most. Compared to

2019, there has been a significant drop in the

proportion of people who receive information via

TV: for the total population, it was 28% in 2019,

before falling sharply to 9% in 2020. In rural areas,

the rate was also low in 2021, at 8%. One fifth of

Hungarians living in rural areas will not be aware of

digital payment opportunities in 2021, while for the

total population this figure decreased by 10% after

2019 and was only 14% in autumn 2020. The results

show that digital channels (online, social media) are

less used to inform people on this topic, so it would

be worth improving them. More people could be

reached with different campaigns, useful and

attention-grabbing advertising, since most people

spend their time online, as we saw earlier in the

study, browsing social media and news portals. So,

these channels should also be used more for

information purposes.

The population’s views on the areas where they

need to improve their financial literacy are

summarised in Figure 6.

20%

18%

17%

43%

14%

10%

20%

19%

48%

18%

14%

20%

43%

24%

10%

12%

18%

20%

28%

33%

0% 10% 20% 30% 40% 50%

DK/DA

in no way

other

from the radio

from the printed press

from social media

online

by the help of financial experts

from the television

through family and friends

2019 Spring 2020 Autumn 2020 2021

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Fig. 6: Need to develop financial knowledge (Authors’ development based on [7; 8])

Respondents in the third national survey feel that

they need to improve their financial literacy in the

area of investments (27%), while in rural areas, a

third of the population would like to improve their

savings in 2021. Many people also want more

information about digital financial services, but

fewer in rural areas than in Hungary in general. In

both surveys, the proportion of people who do not

want to improve their skills in any area is

particularly high - 36% and 42% respectively.

Including this section of society in the digital

ecosystem is a particular challenge. It makes sense

to reach them through the media, as mentioned

earlier, and to inform and educate them indirectly

through advertising, publicity and campaigns.

Young people need to be informed about finance

from a very young age, so that this kind of

knowledge and awareness will be a natural part of

their lives.

It is also clear from the data presented that the first

wave of the pandemic introduced and encouraged a

vast number of people to use digital payments,

giving a massive boost to the industry. However, it

is essential to see that there are still disparities in the

population of rural towns and smaller settlements

compared to the central part of the country, so

government intervention to gain the trust and inform

the rural population is particularly important.

5 Discussion

Digitalisation is now an integral part of today's

world: it is the basis for technological innovation

and is present in all areas of life. The development

of the internet and finance have become closely

intertwined, becoming an integral part of each other.

The unprecedented growth of the internet has

opened up new opportunities for development,

opening the way for the development of tools that

have changed our lives. New market entrants have

brought a number of innovations that have made

financial products and services more widely

available and made money management more

straightforward and more efficient.

Among these innovations, this article examined the

situation of electronic payment solutions in Hungary

and sought to answer the question of how the

knowledge and use of these digital options changed

among respondents since the beginning of the

pandemic and what the reasons for the changes

might be. During the period under review, there

were a number of pandemic events and measures

that had a significant impact on payment patterns in

Hungary.

Comparing the four surveys, we conclude that

overall, more people have more digital payment

devices than before the pandemic, and a higher

proportion of people have internet access. However,

in 2021, a relatively high proportion of rural

respondents, 20%, still do not have internet access at

home, and a third of people will not have the

internet on their phones. During the pandemic, the

number of people using the internet to manage their

finances increased, but the rural population still lags

behind. Moreover, even during the pandemic, more

than 40% of those surveyed were reluctant to deal

with these issues online, even though they had the

tools to do so.

A specifically positive conclusion is that, overall,

far more people are familiar with all electronic

payment solutions than at the beginning of 2019, so

in two years, they have managed to broaden their

knowledge of these options.

The government has tripled the limit for entering a

PIN for contactless payments since April 2020 in a

bid to curb the spread of the virus, in the hope that

people will touch POS terminals less often. The

respondents have taken advantage of this change,

with more than 20% more people using their debit

card by touch. The difference is significant among

those paying by debit transfer, with 31% more

people using it in autumn 2020 than in spring 2019,

27% 23% 20% 18%

36%

23% 30%

15% 17%

42%

10%

20%

30%

40%

50%

investments savings new digital

financial

services

comparison of

bank offers

other none of them

Autumn 2020 2021

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Fanni Farkas, Cserne Panka Póta,

Patrícia Becsky-Νagy

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probably due to introducing the Instant Payment

System.

In general, in spring 2021, there was no significant

change in people's payment habits compared to

2020, but the rates did not fall back to pre-pandemic

levels.

When asked about their reasons for not using these

electronic payment options, most respondents said

that they were used to paying in cash. On the

positive side, however, there has been a 20%

reduction in the proportion of people who are

deterred from going digital by the complexity of

use, and a reduction in the number of people who

refer to lack of information and high costs. Most

respondents said they would switch to electronic

payments if these were safer, simpler, and if they

would be better informed. People in rural areas find

it rather difficult than in the rest of the country, so

they seem to be less informed.

The analysis on the impact of the pandemic has

found that for a third of people, the pandemic did

not change their payment habits. Among the

youngest age group and those with tertiary

education, around one in two people now pay more

often by cashless means.

The surveys also showed that most people learned

about electronic payments from information

provided by their family and friends. It was also

found that the news about digital payments does not

reach people through the various digital channels, so

it would be worth informing them first-hand with

advertisements and campaigns. This may offer the

most effective solution for the future, as the

majority of the population uses online channels,

including social media in general, for 3-4 hours

every day. It would be particularly important to

educate the public about investments and ways of

saving.

6 Summary

6.1 Conclusion and Suggestions

Summing up the experience gathered, there are

significantly more people aware of and using

electronic payment options than in 2019. However,

there is still a large number of people who are not

willing to manage their finances online.

Based on the differences amongs the findings of the

four surveys presented in the article, it is clear that

people's payment habits can undergo significant

changes in response to a pandemic-like situation and

state measures. As a result, the overall trend in the

use of electronic payment services is increasing. On

this basis, it is vital that people's financial

knowledge and awareness is further enhanced from

as young age as possible through new methods and

channels to support the uptake of financial

digitalisation, so that more people would be aware

of the principles and functioning of these solutions.

In the future, government support will be essential

for the further uptake of digital payment solutions

and a more balanced spread of digitalisation among

rural populations. The government's primary role is

to improve information available on the security of

digital payment solutions, build public confidence in

the new features, and develop and implement

programmes to improve the financial and digital

skills of the population. Improving the public's

perception of security would significantly enhance

their willingness to use digital payment services.

Moreover, the expansion of education must be part

of a more complex, long-term strategy. We need an

up-to-date structured plan made and used by the

government, which implements financial study

material into the central school system. It should be

built up from the basics for the younger generations

(e.g., how is money earned) throughout the

schoolyears for the older ones (e.g., the basics of

taxing and the economy).

One must also not forget the generations already out

of the central school system: by creating short, easy-

to-use videos we can transfer knowledge among the

population. The key is to make a platform well-

known and available for everyone.

The population of the rural areas in Hungary proved

to be less educated in digital finance. Simple

advertisements on the internet, but more importantly

in television could reach them as well. Everyone

should feel safe and educated enough to use and

benefit from the new ways of payments.

6.2 Future work

This paper studies the period between 2019 and

2021. If further research made by EFISZ will be

available, this study should be continued. An aspect

of the future work could be the impact of new waves

of the pandemic and also the economical regression

caused – among others – by the war in our

neighbouring country, Ukraine.

This paper studies the changes in Hungary only.

Therefore, in a future work one should compare

these results to the V4 countries or the European

Union as well.

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Contribution of Individual Authors to the

Creation of a Scientific Article (Ghostwriting

Policy)

Fanni Farkas: Was responsible for Conducting a

research and investigation process, specifically

performing the experiments, or data/evidence

collection.

Cserne Panka Póta: Preparation, creation and/or

presentation of the published work, specifically

visualization/data presentation.

Patrícia Becsky-Nagy: Oversight and leadership

responsibility for the research activity planning and

execution, including mentorship external to the core

team.

Creative Commons Attribution License 4.0

(Attribution 4.0 International, CC BY 4.0)

This article is published under the terms of the

Creative Commons Attribution License 4.0

https://creativecommons.org/licenses/by/4.0/deed.en

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