Pandemic-era surge in online payments and the post-pandemic shift in offline consumption trends (2020–2024)

Since 2020, the COVID-19 pandemic has fundamentally reshaped consumer spending patterns worldwide. Lockdowns and fears of infection triggered an unprecedented surge in online shopping and electronic payments, while offline spending on retail, travel, and dining plummeted. This shift can be observed through the case of Baemin (Baedal Minjok), one of Korea’s leading food delivery platforms. In 2022, Baemin recorded roughly KRW 400 billion in operating profit, escaping a deficit cycle for the first time in three years. This is often interpreted as the result of booming delivery demand: as fewer customers visited restaurants in person, the number of restaurants offering delivery through the platform more than doubled, and the total number of orders in 2022 nearly tripled compared to 2019. By around 2024, as economies reopened, many of these trends appeared to change or partially normalize. This paper analyzes the explosive rise of online payments during the pandemic as well as the transformation and recovery of offline consumption trends. It also examines the growth of mobile payments and digital wallets alongside the rebound of offline stores, and discusses today’s landscape in which both online and offline markets are becoming active in parallel.

Online payments and electronic payments refer not merely to “sending money over the internet,” but to a payment ecosystem in which multiple financial institutions and technological infrastructures interact. When a consumer taps the payment button on an online store or delivery application, encrypted payment information is exchanged among the card issuer, banks, and the merchant’s servers, and an authorization process is carried out. In this process, sensitive account data or card numbers are not directly exposed; instead, transaction security is ensured through tokenized data or one-time authentication values. In other words, electronic payment is the product of the combination of network infrastructure and encryption technology, and this structure enables fast payments anywhere in the world without physical cash.

In particular, mobile payments and digital wallets—emerging alongside the spread of smartphones—are often seen as technologies that significantly lowered the barrier to online payment. A digital wallet stores a user’s accounts and loyalty/benefit information within an application and allows the user to complete payments conveniently through biometric authentication such as fingerprint or facial recognition, without manually entering passwords. Rather than repeatedly typing complicated card numbers, users can select a pre-registered payment method and finish a transaction with one or two taps. This experience has encouraged the perception that “payment is not difficult,” thereby accelerating the everyday normalization of electronic payment.

During the pandemic, the use of e-commerce and digital payments expanded explosively around the world. As a result, by 2024, the share of online transactions in global retail sales reached 20.1%, exceeding 20% for the first time—up sharply from 16% in 2019, before the pandemic. (Global e-commerce sales in 2024 are estimated at roughly USD 6.4 trillion.) Crossing the 20% threshold in online retail share can reasonably be regarded as a major milestone in the global retail environment.

The total volume of electronic (digital) payments also expanded significantly. In 2024, global consumers spent roughly USD 50 trillion via digital payment methods, and excluding mature markets such as China, annual growth approached nearly 20%. The number of non-cash transactions has increased more than tenfold over the past two decades, reflecting a rapid global decline in cash usage. Indeed, during the pandemic, cash usage fell sharply: in 2022 alone, cash’s share of global transactions decreased by about 4 percentage points, and there have been few signs of a rebound since.

The pandemic also brought major changes to people’s lifestyles and purchasing behavior. As fear of infection made people avoid face-to-face contact, cash usage dropped rapidly, and a clear preference emerged for contactless digital payment methods. Globally, the reduction in cash usage during the pandemic has not returned to pre-pandemic levels and has continued to remain low.

That said, consumers did not remain exclusively online. In the early phase of the pandemic in 2020, extreme phenomena such as stockpiling toilet paper and daily necessities occurred, but over time consumers grew accustomed to purchasing nearly every category of goods online. Yet the desire for offline experiences persisted, and as public health conditions improved, consumers returned to stores, restaurants, and travel destinations. As pent-up demand for shopping and travel was released, so-called “revenge shopping” and “revenge travel” emerged, drawing crowds back to offline spaces in 2022–2023. Even after offline stores reopened, many consumers adopted hybrid shopping behaviors: for example, searching for product information online and then purchasing after trying it in-store, or viewing a product offline and then ordering online at the lowest price. In this way, “omnichannel consumption” became more firmly established.

However, the rapid growth of electronic payments, delivery services, and online platform industries did not produce only positive outcomes. Above all, as delivery apps and easy-pay systems became widespread, criticism increased that small business owners faced heavier burdens from platform intermediation fees and advertising costs. As payments and orders concentrate on a small number of platforms, merchants may become unable to operate without them, which could raise long-term risks related to market dominance and fee increases.

Moreover, as payment processes become too frictionless, consumers may strengthen tendencies toward impulse buying or overspending because they do not “feel” the scale of their spending. The “digital divide”—in which older adults or vulnerable groups who are unfamiliar with digital payment systems can be excluded from financial services—also deserves attention. Finally, as payment and purchase-history data become concentrated in platforms and financial institutions, concerns about privacy protection and a surveillance society are growing and cannot be overlooked.

Looking ahead, the share of digital payments is likely to continue rising globally. In many countries, mobile wallets and easy-pay systems already substitute for transportation fares, utility bills, online shopping, and even small-value transactions, while some nations are experimenting with central bank digital currencies (CBDCs) to prepare for a digital transition of the monetary system. The boundary between online and offline is also increasingly blurred: consumers explore product information online, test items in offline stores, and then complete purchases online again—moving freely across multiple channels. If this trend continues, the economy may not converge on a fully “cashless society,” but rather on a layered payment environment in which cash, cards, and digital wallets coexist and are combined depending on context.

At the same time, the normalization of digital payment may intensify new social problems. If markets and data become excessively concentrated in a small number of platforms and payment providers, small businesses and consumers may be placed at a disadvantage in terms of fees and conditions, as noted earlier. Delivery riders and other platform workers are often exposed to high-intensity labor and safety risks driven by order-dispatch algorithms, while remaining in a “gray zone” with insufficient legal protection. In addition, security risks such as data breaches can undermine trust in the payment system as a whole, and groups unfamiliar with digital devices may face increasing exclusion from financial services. Therefore, future discussions should move beyond the question of “how convenient electronic payment is” and focus more on how to manage and mitigate these side effects.

Addressing these challenges requires a multilayered approach in which governments, firms, and consumers each share responsibilities. Governments should design appropriate regulatory frameworks for fee structures and platform market dominance to ensure fair competition, while also providing digital financial education for digitally vulnerable groups and maintaining offline options to secure financial accessibility across different segments of society. Firms should improve contract structures that operate unfavorably for small merchants and workers, and take responsible action in privacy protection and security investment. Consumers, too, should avoid relying solely on the convenience of digital payments; they should review their spending patterns and, if needed, use tools such as spending-limit alerts and budgeting features to strengthen self-control. When technological development is accompanied by regulation and user education, digital payments can become established in ways that enhance overall efficiency and convenience while minimizing negative externalities.

The COVID-19 pandemic rapidly diffused new consumption patterns centered on online payments, digital wallets, and delivery platforms, bringing structural shifts such as declining cash usage and the institutionalization of omnichannel consumption. At the same time, various social issues have become visible, including fee burdens, platform concentration, privacy protection, and the digital divide. In my own daily life, I frequently use delivery applications and easy-pay services; on the one hand, I find myself dependent on their convenience, but on the other, I have also experienced overspending because the scale of expenditures is less directly “felt.” This experience suggests that technological advancement does not automatically equate to social progress. Electronic payments will surely continue to become more sophisticated and convenient, but institutions, education, and consumer awareness must mature together so that the benefits do not concentrate only in certain groups. Ultimately, what matters is not the technology itself, but the social consensus about the rules and values under which that technology should be used—and this, I believe, is the most fundamental task in how we understand and govern digital payments in the post-pandemic era.