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Bangor Business School Working Paper

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BBSWP/19/08

When the bank is closed, the cash is king; ... not! A qualitative longitudinal study in

the payment media used in Greece during and after the three-week period of

governmentally-imposed Bank-holiday and respective capital controls1

(Bold,) By

Konstantia Litsioua & Konstantinos Nikolopoulosb, 2

a Department of Marketing, Retail and Tourism, Manchester Metropolitan University Business

School, Manchester, M15 6BH b forLAB, Bangor Business School, Prifysgol Bangor, Bangor, LL57 2DG, Wales, U.K.

May, 2019

Bangor Business School Bangor University Hen Goleg College Road Bangor Gwynedd LL57 2DG United Kingdom Tel: +44 (0) 1248 382277 E-mail: business@bangor.ac.uk

1KonstantiathanksProfessorsBernardoBatiz-Lazo,SantiagoCarbo-Valverde&JohnK.Ashtonfortheirguidance,advice,andcriticalfeedbackduringthisresearchpresentedinthisworkingpaper2 Correspondingauthor:kostas@bangor.ac.uk

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When the bank is closed, the cash is king; ... not! A qualitative longitudinal study in

the payment media used in Greece during and after the three-week period of

governmentally-imposed Bank-holiday and respective capital controls

Abstract

Inthisresearchpaperweinvestigatechangesinpaymentmediausedfromconsumersasa

resultofextremefinancialrestrictions.Themotivationcomesfromthesummerof2015in

Greecewhereafter failureforanagreementbetweenGreeceandtheTroika(EU, IMFand

ECB)foranextensionoflendingsupportfromthelatter,theGreekgovernmentdecidedto

closethebanksforthreeweeks;andapplycapitalcontrolsstillinplacetenmonthsafterthe

event - however gradually relaxed. Methodologically we adopted grounded theory and

throughthisafullyqualitativeandlongitudinalstudycomprisedofthreeseries(everysix

months)ofin-depthinterviewswithindividualcitizens(onbehalfoftheirhouseholds)over

aperiodofone calendaryear.Weaim to investigate research changes inpaymentmedia

usedduringandaftertheperiodwhenthebankswereclosed,aswellaspermanentchanges

in consumer and social behavior. Acknowledging thatwith thismethodological approach

reachingstatisticalsignificantresults isverydifficult tobeachieved,wedohoweverseek

andtoagreatextendprovideinsightinwhatreallyhappenedduringandaftertheevents,

andonethingcameoutagainandagain:peopleturnedmoreintotheuseofdebitcards,and

secondarytoonlinebankingandtoa lesserextenttocreditcards; the latercamewithan

inevitable raise of household debt. Cash use was only temporarily increased and more

evidentlyduringthethree-weekevent,whileallthepreviousaforementionedresultshadof

amorepermanentnature,asillustratedfromthelongitudinalanalysis.

Keywords:FinancialCrisis;Banks;CapitalControls;Households;Paymentmedia;

JELClassifications:G0,G21,G28,H12,H31

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1.Introduction

Financialandeconomiccriseshavehitmankindmoreoftenthannot.Fromthetulip

pricebubble(WangandYi2012)tothegreatDepression(Romer1992)andmore

recentlytheAsiacrisis(BartelsandMirza1999)andtheLehmanbrotherscollapse

(DeHaasandVanHoren2012)andtheaftermathofthatwiththefollowupofthe

currentEurozonecrisis(KitromilidesY.2013).

Thereadercanexpecttosomeextendthatduringfinancialcrises-wheremarkets

andbankscollapse...cashbecomesking!inotherwordstheuseofcashasamedium

ofpaymentdoes increase(Fosteretal.2011)even if that isa temporaryreaction.

However there is a lack of research on extreme phenomena like the one most

recentlyappearinginthenewsforGreece,withthegovernmentally-imposedBank-

holidayandtherespectivecapitalcontrols.

With thebanks shut, access to credit is restricted.However access to cash is also

constrained unless if citizens knew about the forthcoming closure and hadmade

substantialwithdrawalson theanticipationof theevent.Also it isof fundamental

importanceifwhenthebanksareclosedtheaccountsareaccessibleornot-likein

thecaseofCyprusin2013whereahaircutwasimposedonaccountswithbalance

morethan100,000Eurosandaccountswerenotaccessibleatall(Michaelidesetal.

2014).

With this being the main motivation for the study, the main focus inevitably

becomes:what medium of payment do people use during a governmentally-

imposedBank-holiday?

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For the sake of getting some insight towards that research objective, grounded

theorywasemployedasthemainmethodologicalparadigmandthroughthisafully

qualitativeandlongitudinalapproachwasfollowedcomprisedof threeseries one

everysixmonths,ofin-depthinterviewswithindividualcitizensspeakingonbehalf

oftheirhouseholds,andallthisoveraperiodofonecalendaryear.Thefirstsetof

interviews was taken during the six weeks following the three weeks of the

aforementioned imposed Bank-holiday; andwhile the exact same capital controls

were still inplace.The secondand thirdwaveof paired interviews (exactly same

sample)wastakensixandtwelvemonthslaterrespectivelysoasto identifymore

permanenteffectsoftheextremephenomenon.

The convenience sample of 20 individuals was drawn from a larger sample of a

recently surveyed Greek population (on the same research topic of payment

mediumconsumerchoice),justafewmonthsbeforetheeventasreportedinLitsiou

&Nikolopoulos,2019,forwhichsomebasicdemographicsareprovidedaswell.

The remainingof thepaper is as follows: section twodescribes the contextwhile

section three is looking into the respective academic literature. Section four

describesourmethodological approachand thedemographicsof the sample from

whichourrespondentswereselected.Sectionsfivegivesthedescriptivestatistical

analysis. Section six discusses how the grounded theorywas applied through the

phasesofcodingthemoststrikingqualitative findings fromour interviews, theme

extraction, saturation,memoingand theorybuilding.The lastsectionprovides the

mainconclusionsandaroadmapforfutureresearch.

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2.Thecontext:thesummerofGreeceandthegovernmentallyimposedBank-

holidayandcapitalcontrols

SincetherisetopowerofthefirsteverleftGovernmentofSyrizainGreecein25Jan

2015,theprospectofadefaultforthecountrybecamemoreandmoreapparentas

thedayswerepassingby,andtherewasnoagreementinthehorizonbetweenthe

government and the troika (EU-IMF-ECB). The Lending support programme from

the troika was expiring, and a without a follow up programme not having been

agreed and without the country been able to get out to the markets for the

necessary lending to support the national debt, bankruptcy grexit and greccident

becameeverydaywordsinthelipsofmostEuropeanandGreekcitizens.

Theprogrammeendedinthe30thofJunewithoutanyagreement,theECBblocked

the ELA mechanism for providing extra liquidity to the Greek banks (as a

prerequisitewasthecountrytobeinlendingsupportbythetroika)andinevitably

theGreekGovernment decided on the 29th of June 2015 to imposeBank-holiday

and capital controls; eachGreek citizen could onlywithdraw60Euros fromATM

machines per day and after a week most ATMs could only hold 50Euro notes,

practicallyreducingthemaximumdailywithdrawalto50Euros;

Thebanksremainedclosedfor3workingweeksandoneworkingdayafterwhich

gradually theyopened tooffer someservices to thepublic -once theaggreekment

took place in the Euro summit (Eurogroup,2015); As of today (29/08/2015) the

capital controls for individual citizens are still in place and these are gradually

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relaxingforcompanies.Thesedidnotapplyfortouriststhatholddebitcardsfrom

foreignbanksandassuchthereshouldnotbeadirecthittothehospitalitysector.

After the third day of the imposed Bank holiday 280 bank branches opened for

pensionersnothavingaccesstoATMs(Imerisia,2015)-itisverycommoninGreece

for elderly people not using or not having at all debit cards and accessing their

current accounts (where their pension is paid) thorough the till in the respective

branches;aweeklater1000bankbranchesopenedforthisverypurpose.

One key point is that despite the banks been closed, and capital controls been

imposed in cash withdrawals, the citizens did have access to their accounts via

online banking so as to transfer monies from account to account; and most

importantlysoastopayinshopswiththeirdebitcards-thusbeingabletousetheir

debitcardsforbigpayments(morethan60Eurosperdayandaccordinglytotheir

banksregulardailyallowance)toshopsacceptingsuchmeansofpayment.Actually

the government forced all shops to accept debit cards as some refused to do

so...(LawChamberofChania,2015).

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3.BackgroundLiterature:Don'tcryformeArgentinaetal...

Banksisanintegralpartofcapitalismandtheworldasweknowit-atleastinmost

oftheWesternEconomies.Havingthatsaidtheeconomyhastokeepongongevenif

the banks are closed, despite conceptualizing that been extremely difficulty given

thepaymentsandtransactionsystemsinplaceinmostoftheworld.

Therearehoweversomeveryrecenteventsthatarequitesimilarinnaturewiththe

oneweresearch inthecurrentpaper:capitalisticcountrieswherethebankswere

closedforashortperiodoftimeasaresultof governmentalfiscalinstabilitywith

thetwomorevividonesbeing:Argentinain2001andCyprus2013.

In2001Argentinawithitseconomyatthebrink, inanattempttostopabank-run

drivenbycitizenswithdrawingmoneyandconvertingthemtoUSDollarsinorderto

senttoforeignaccounts,thegovernmentinDecemberhasfrozenallbankaccounts

atthestartfor90days(knownastheCorralito)witha maximumamountofcash

allowed for withdrawal per week at 250 Argentinean pesos; and with no

withdrawals allowed from US Dollar bank accounts unless these were first

converted to pesos (Clifford, 2001). So citizens could only withdraw the rapidly

devaluatingpesos.Theycouldhoweverusetheircreditcards,debitcards,cheques

and othermeans of payment but most of the citizens as well as shops were not

accustomed to these paymentmedia (Clark, 2002). The situation is quite similar

withtheoneweinvestigateinthecurrentresearchwiththemaindifferencebeing

the existence of a parallel currency: the weak and governmentally promoted

ArgentineanpesoandthestrongU.S.A.Dollar.

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More recently in Cyprus (Clerides 2014) in March 2013 Troika provided a €10

billionemergency loan to thegovernment in exchange for closingCyprusPopular

Bank(thesecond-largestone)andimposingahaircutinallofitsuninsureddeposit

accounts;furthermorealmosthalfofuninsureddepositsintheBankofCyprus(the

largest bank) was due on a 40% haircut on deposits over the pan-European

insurancethresholdof€100,000.Thebanksremainedclosedfora fewdayswhile

thesemeasureswereimposedandcapitalcontrolslastedforoverayear.Although

many have been said of what actually lead the Cypriot banks to such a state

(Michaelides2014),littleareknownofhowthissituationactuallyaffectedcommon

people.

Thus there is a clear gap in the literature: despite the importance of both these

financial and social tragedies - little are known and even fewer have been

academically reported on how individual citizens adopted to such situation and

whatmeans of paymentwere employed and thus our furthermotivation for this

studythatexactlyistryingtothrowlightexactlytowardsthatdirection.

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4.Methodology

We do begin with a key question, and then we do collect qualitative data

(interviews)overthreephasesthroughacalendaryear,thushavinga longitudinal

dimension as well in our study. As data come in we do review them and some

themesbecomeapparent;wethencodethesethemesthathavebeenextractedfrom

the data and we try to draw insights into the original question, that eventually

becomes a theoretical proposition. This is the standard Grounded Theory

epistemologicalapproachasdescribedinGlaser&Strauss(1967).

Thestartingpointisthekeyresearchquestion:

Whatmediumofpaymentdopeopleuseduringagovernmentally-imposed

Bank-holiday?

Themethods that are employed are as follows: given the sensitive nature of the

questions we wanted to ask, the use of a survey thought to result in high non-

response ratio. Further the limited amount of time (threeweeks of bank-closure)

madeanobservationstudyalmostimpossible.Thusthemostappropriateapproach

thought to be a series of in-depth interviews, from which themes will naturally

evolveandbecomeafullpropositionofnewtheory.

Sincewewantedto investigatebothtemporaryandpermanenteffectsofthebank

closurephenomenonwedecided togivea longitudinaldimension toourstudyby

takingthe interviewin threewavesover thesame individualssoas to tracktime-

wisehowthesituationandpreferencesarechanginginthefrontofpaymentmedia

used.

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The waves were repeated every six months, three times in total, lasting a full

calendaryearfromJuly2015toJuly2016.Followingthequalitativeanalysisabasic

descriptivestatisticsanalysisalsosummarizedthefindingswhereverpossible.

4.1Demographics

Of the 692 respondents in an earlier survey (Litsiou & Nikolopoulos, 2019), a

smallerconveniencesamplewasselectedaimingforin-depthinterviewingresulting

in 20 interviews taken initially in July-august 2015 where still anonymity of

respondentswaspreserved.ThesecondwavewastakeninFebruary2016andthe

third in July2016. Figures1 and2 give somedemographicsover age and income

groupsfromwhichour20individualswererandomlyselected.

Figure1.Agegroups.FullsamplefromLitsiou&Nikolopoulos,2019.

!

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Figure2.Incomegroups.FullsamplefromLitsiou&Nikolopoulos,2019.

We took theopportunity to sampleover theexistingpopulationused inLitsiou&

Nikolopoulos, (2019) and as suchwe are able to provide some demographics (in

section6)ofthepopulationweareresearching.Thesemi-structuredquestionsused

fortheinterviewsarepresentedintheappendix.

!

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5.DescriptiveStatisticsanalysis

Abasicdescriptivestatisticsanalysisispresentedhereaftertryingtosummarizethe

qualitativefindingswhereverpossible.

Firstofalltherewasnochangesinpaymenthabitsforeverydaysmalltransactions

where cash is used consistently from all the interviewees. However indicative

changesonpaymentmediausedforregularshoppingandservicesarepresentedin

table1:

Utilities/MobilePhonebills Shopping(groceries/petrol)# Before After Before After1 DEBIT DEBIT DEBIT DEBIT2 CASH WEBBANKING CASH DEBIT3 - - CASH DEBIT4 WEBBANKING WEBBANKING DEBIT DEBIT5 WEBBANKING WEBBANKING CASH DEBIT6 CASH - CASH DEBIT7 CASH CASH CASH DEBIT8 CASH CASH CASH DEBIT

9CASH/WEBBANKING

CASH/WEBBANKING CASH CASH

10 CASH WEBBANKING CASH CASH11 CASH CASH CASH CASH12 WEBBANKING WEBBANKING CREDITCARD CREDITCARD13 CASH CASH CASH CASH14 CASH CASH/DEBIT DEBIT DEBIT15 CASH CASH CASH DEBIT16 CASH CASH CREDITCARD CREDITCARD17 CASH CASH CREDITCARD CREDITCARD18 CASH Unpaid CASH CASH19 CASH DEBIT 20 DEBIT DEBIT CREDITCARD CREDITCARD

Table1.RegularShopping/Services

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We notice that 25% changed paymentmedia for utilities/mobile phonewhile an

impressive 35% changed from cash to debit cardwhile everything else remained

unchanged.

Indicative changes on payment media used for purchases on the internet are

presentedintable2:

Purchasesonline# Before After1 6-8timesinayearwithdebitcard Wantedbutcouldn't2 NO 3 PayPal PayPalblocked/Didnotwantto4 3-4inamonth PayPalblocked5 NO 6 FAMILY 7 NO 8 NO 9 NO 10 NO 11 YES YES/Viafamily(livinginGermany)12 YES YES13 YES/prepaidcard Didn'tneedto14 NO 15 NO 16 YES Didn'tneedto17 rare/bankaccount NO18 NO 19 NO 20 NO

Table2.OnlinePurchases

Wenoticethatthemajority isnotusingatallonlinepurchases,butof thoseusing

15%didnotmanagedtoanda10%managedto.

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Furthermore,actionslinkedtoFinancialDifficultiesarepresentedintable3:

Delaypayment# 1 NO2 YES3 PAIDEARLIER4 PAIDEARLIER5 NO6 NO7 PAIDLATER8 PAIDLATER9 PAIDLATER10 PAIDLATER11 NO12 NO13 YES14 NO15 PAIDEARLIER16 NO17 NO18 YES19 YES20 YES

Table3.FinancialDifficulties

20% of the respondents paid later, 15% paid earlier - a very interesting result

indicative of the fear of haircut in the accounts balance, 25% not paid at all

indicativeofthefinancialdifficultieswhilea40%didnotdelaypayment.

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Finally,actionsindicativeofSocialCollateralarepresentedintable4:

Letcash Letcard Borrowcash Borrowcard

# 1 2 180€ DEBIT190€

3 DEBIT70-100€

4 DEBIT135€ 5 6

7 DebitUK-70€

8 YESTwice 9 10 11 1,000€

12 DEBIT1000€

13 14 400€ 15 200€ 16 3,500€ 17 DEBIT200€

18 Credit-500€

19 20 300€

Table4.SocialCollateral

Wenoticethat30%havelentcash,25%havelentacardwhile5%borrowedmoney

and 10% borrowed a card respectively, totaling a groundbreaking 65% of the

respondentsbeeninvolvedeitherasbeneficiaryorbenefactorinlendingmoniesto

friendsandfamily,indicatingsubstantialevolutionofsocialcollateralphenomena.

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6.GroundedTheory:Qualitativefindings,EvolvingThemes,Coding,Memoing,

SaturationandTheory...

In the next bulletswe list themost striking qualitative findings - in terms of the

respectivequotesrecordedfromthe20interviews,andwedoreporttherespective

codingin[...]nexttoitsquote:thiseventuallyleadstotherespectivethemesthatare

evolving.

• [I-F]‘AstoreinChalandri(aposhareainAthens)runoutofRolex’.

• [BC]‘Iwouldn’tmindtousethedebitcardinsteadofcashbutIkeepforgetting

thatIhavethisoption;Iamnotusedtoit’.

• [BC]‘‘Iusedtopayeverythingwithcash.Now,Iusemydebitcardmoreandthe

webbankingforeverytransactionIcan'.

• [SC]‘‘Iletmydebitcardtoafriendinordertobookaflightthatcost135Euros‘

• [NA]‘Myphilosophyisthatincaseofcounty’sbankruptcy,Idon’tmindto

becomebankruptaswell’.

• [BC]‘‘TheonlytransactionsIusedtomakewithcashandsincethecapital

controlismadewithmydebitcardisthetransactionsinthegroceries’shop

andthepetrolstation’.

• [PC]‘Ohcomeon,waitabittoseewhatwillhappenwith‘theagreement’and

youpaylater.Wedon’twanttohavetochangelotsofeurosindrachmas’.

• [BC]‘‘Ihadnootheroptionratherthanusingmydebitcardformygroceries’

shopping’.

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• [NA]‘‘Ihaveneverusedmydebitcardapartofwithdrawcash,evenduringthe

bankholidayIwaiteduntilthebankopensagain’.

• [BC]‘‘Iwouldn’thavepaidwithmydebitcardifIcouldhadwithdrawenough

cashtopayfortheholiday’stickets’.

• [NA]‘IamnotgoingbacktoGermany,nomatterhowdifficultthesituationis!’

• [SC]‘Ilendmydebitcardtwiceinoneofmycolleaguesinordertomake

purchasescost500€eachtime’.

• [PP]‘Ipreferrednottomakeapaymentandleaveitforlaterinsteadofpaying;

Iwantedtohavecash’.

• [SC]‘Afterhavingexperiencedthedifficultyofnotbeingabletohavecashcause

theydidn’thavedebitcards,bothmymumandmyaunt(wholivetogether)

saidthattheywillgetcashfromthebankcashierassoonasthebanksopen

again’andcashwaslenttothem.

• [NA]‘IdonotdeclarethemoneyIampaid,howIamsupposedtogetthemat

firstplaceanddepositit’.

• [I-F/SC/BC]‘Inordertosavemymoney,Ilet3.500€tomyextendedfamily

members’.

• [NA]‘Ididn’texperiencethesameproblemasYiorgakis(TheFormerPrime

MinisterofGreece,Mr.Yiorgos)…’

• [SC]‘MydaughterlendsmehercreditcardwheneverIwanttomakea

purchaseandthereisanoptionoffreeofinterestinstallments'.

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• [I-F]‘Iwantedtopayoffmycarloan–about3500€-butIwasn’tallowed’.

• [SC]‘Iletcash2-3timesduringthebankholidaytoamemberofafamily,about

100€eachtime’.

• [BW]‘Iwithdrawabigamountofcashfromabankbranchfollowingrumorsof

aforthcomingbankclosure…’

The codes that were listed in [...] next to its quote and the respective evolving

themesareasfollows:

[I-F]:Investinvaluableassets-Fearofhaircut

[PP]:PostponingPayment–creatingfinancialliabilities

[SC]:SocialCollateral

[BC]:BehaviouralChange

[NA]:NotAffected

[PC]:ConfusioninthePublic

[BW]:BigWithdrawal

Table5.EvolvingThemes

Theoreticalsaturationwaspartiallyachievedafterthefirst5firstinterviewswhen

mostof theaforementioned themeshasappeared.Full saturationwasachievedat

interviewnumber17whileinthelastthreeinterviews(uptoincluding20th)nonew

themesevolvedatall.

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6.1Memoing

Inthissubsectionwedescribedhowthememoshavesurfacedfromthethemesand

allthequalitativeevidence:

Firstderivedmemo:TheuseofDebitCardshasincreased

• Wefindtentativelythatpeoplethatneverhadusedtheircards,didsoforthe

firsttime[BC]

• Thispaymentmediumalsoallowedthemtoexceedthedailywithdrawal

limitof60Eurosandspendasmuchastheirbankallowingthemtoviatheir

dailydebitcarduselimit.

• Allowedforbigspendingtowardsexpensiveassets:cars,gold,jewellery[I-F]

Secondderivedmemo:theuseofCashwasaffected–buttheeffectwasless

• Therewassomelevelofanticipationandsomepeoplehavemadesubstantial

withdrawalsofcashonthedaysbefore.

• SecondlymanypeoplewaitedpatientlyintheATMqueueseverynightsoas

towithdrawtheirdailyallowanceof60Euros-whichtotaledforamonth-

forthemajorityofthepopulation-ismorethantheaveragesalary,andthus

exceptmerchantstherewasnoreallackofcashuptothatpointintime

• Foreverydaysmalltransactionsallstillusedcash

• But35%switchedtoDebitforShoppingand10%forUtilities;also15%

switchedtoOnlineBankingsosubstitutioneffectsthere[BC]

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• Finallymanywerereceivingcashfromfamilyandfriendsandspendingthese

–[SC]

Thirdderivedmemo:theuseofCreditCardsremainedstableorslightlyincreased

• NotmanydousecreditcardsanywayinGreece

• Thereisalsosomefeartousedebitcardswhenacreditalternativeis

present,aspeoplethinkthatifadebitcardishackedthenthedamagemight

bemuchmorethanacreditcardasthelatterisrestrictedtothecreditlimit

whiletheformertothetotalaccountbalance…

6.2TemporaryandPermanenteffects

Throughthesecondandthirdwaveoftheinterviewwemanagedtoestablishwhich

of the aforementioned evolvingmemos and respective behaviours are temporary

andwhichhavemoreofpermanent2and3ofinterviews-longitudinaleffects

Thesecondwaveof interviews tookplacesixmonthsafter the first sockofbanks

closed; and we are aiming to see if the imposed capital controls made people

changed permanently their behaviour to how they pay in their transactions or if

after a while theywent back to their previous old habits as far as payments are

concerned.

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Outof20intervieweesthathavebeentakenpartinoursurveyinsummer2015,19

have been interviewed in this second round; 1 have beenmoved to England. The

results are quite interesting as what is the most evident now is that with no

exception,everyoneusesadebitcardwhereverisacceptedandtheyonlyusecash

fortransactionsmainlyinaconvenienceshop;mostofconvenienceshopsstillthey

do not accept cards and usually people do small transactions for newspaper and

cigarettes.

All19peoplesaidthattheyusedebitcardsmoreandmore,andlesscashthanever.

Oneintervieweeappliedforadebitcardthelast6monthsandusesiteverytimehe

can; before capital controls he had only a cash card in order to withdraw cash.

Anotherperson,apensioner, said that shedoesuseherdebit cardonlywhenshe

hasnootheroption– she stillprefers towithdrawcashandpaywith cash inher

transactions.However,thesamepersonappliedforacreditcardforfirsttimeinher

life, inorder topay forher taxes in instalments freeof interest (promotedby the

governmenttoeasethetaxpayments).

Peoplestillwithdrawcashfromtheiraccounts(ATMs),butthepatternisdifferent

thanwhatwashappeningduringsummer.Astheycanwithdrawcashtheirweekly

allowanceinonegoinsteadofvisitinganATMeveryday,13intervieweesdosoand

theygetcashonceinaweek(420Eurosatmaxintotal).Fivemoretheywithdraw

cash once every other week and this is happening because, one is making his

paymentsmainly through theweb-banking,one isusinghis credit card insteadof

cash; twomorearepaidhalf of their in cash so theyalwayshaveenough in their

wallet; and the fourth said that she usually withdraw once every other week

22

becausesheusuallygoesoutwith friendsandshepays the fullbillwithherdebit

cardandherfriendsgivehercash.Onepensionersaidthatheonlywithdrawcash

fromanATMonceinamonth;hewithdrawhisweeklyallowanceof420eurosand

heleavestherest(lessthan300eurospermonth)fortransactionshemakeswith

hisdebitcard.

Moreintervieweesnowusetheirdebitcardsandthewebbankingtopayfortheir

bills;only fiveoutofallsaidtheystillusecashforsomeoftheirbills–twooutof

themtheyuseonlycashforthebills,theotherthreeusebothcashandadebitcard.

Sixoutofall said theydon’tuse thewebbanking for theirpayments; theydonot

evenhavepasscodesforit.

One interviewee said she let hermumher credit card, one let herdebit card to a

creditcard,anotherletherdadhercreditcard–theywenttogethertobuyawhite

good and dad forgot his pin so he couldn’t use it. Two let cash to amember of a

family; about 1000 euros one off and another borrowed cash from her dad 500

eurostwice.

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Thethirdwaveofinterviewstookplacetwelvemonthsafterthefirstsockofbank's

closureinJune2016...[tobecompletedinthesummer]

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6.3GroundedTheory

The theory thatwas grounded from the collection of the qualitative data can be

summarised in the following pyramid of payment media: during and after the

extreme phenomenon of bank closure and respective capital controls,debit card

usehasincreasedpermanentlyasistheuseofonlinebanking(toalesserextent

though) ,while theuseofcashwas increased lessandtemporarily.Creditcard

useremainedstablemoreorlessasitiscappedbythecreditcardrespectivelimits

thatdidnotchangedifnotlowered.

[I-F]:Investinvaluableassets-Fearofhaircut,[SC]:SocialCollateral,[BC]:BehaviouralChange-Substitution

Figure3.GroundedTheoryderivedfromthecurrentstudy

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7.Conclusionsandfurtherresearch

Asanyotherqualitativestudy,interpretivisticresearchispronetocriticismrethe

achievedstatisticalsignificanceorthegeneralizationofthefindingsingeneral;this

howevershouldnotactasabarriertosuchresearchasitcomeswithmanyvaluable

findingsperseaswellasusuallyopensthewaytomoreresearchbothquantitative

andpositivistic aswell asqualitative.Grounded theory is ausefulmethodological

approach as it provides a series of theoretical propositions that still have to be

validated with a larger scale study. Having that said, and acknowledging the

limitationsofourstudy,webelievewefoundsufficientevidencetogroundtheory

that remains to be validated in the future from a large scale study two of our

questionsandlessforthethirdone.

Ontheshorttermimpactandduringthethree-weekperiodofthegovernmentally-

imposed Bank-holiday and capital controls Debit and Credit Cards use were

increased and Cash usage increased to a lesser extent. On the long term impact

front, there is evidence of permanent behavioral change, asmany consumers got

introduced for the first time to online banking and debit cards, and furthermore

startusingthemforaseriesoftransactionsandthekeepondoingsoaftersixand

12months.

26

Apart from the obvious behavioral change (that ismore of interest tomarketing

academics and economists), these will have implications for the governance in

Greece as it will make easier tax-collections given these kind of transaction are

easiertotracethanthecashalternativeones.Thereisalreadya(positive)impactin

VATcollectioninthecountry.

Ontopofthesemainconlcusions,somequiteinterestingfindingscameupaswell:

• thefearofanaccounthaircut(alongthesamelineslikeCyprus)madesome

citizensdecidetomakebigspendingviatheirdebitcardssoastoreducethe

balanceoftheiraccountseventheydidnotreallywantedthoseitems;there

wasapreferenceforvaluableitemslikegoldwatchesandjewelrythatdonot

devalueovertime

• therewasareluctancefromsomemerchantstoacceptbigonlinepayments

inasimilarfearthattheirbusinessaccountswouldbeimposedtoahaircut

• thewholesituationworsenedoncethererumors in thepress(Hope,2015)

that thehaircutcouldbe inanybalanceover€8000-much lowerthanthe

pan-Europeaninsurancethresholdof€100,000

• Therewasanincreaseduseofonlinebanking

• Therewasclearevidenceofsocialcollateral: lendingmoney, lendingcards,

openingonlineaccountsforrelatives

27

Forfurtherresearchthereisobviouslyneedformorestudiesundertheseextreme

conditions, andmoreonwhathappens to individuals andhouseholds rather than

institutions,banksandgovernments;theformerarequiteimportanttoo!

Butmore importantly therewas evident theneed for studies fromamore socio-

economicperspectivechasingtheevolutionofdeepersocialphenomenaasaresult

of suchextreme financial climate: social collateraland thedevelopmentofa zero-

marginal-costsociety.

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Appendix

TheInterviewquestions

Thiswasasetofopen-endedquestionsforasemi-structuredinterviewwhereeachrespondentcouldelaborateasmuchashe/shewantedineveryquestion

1. Whattransactionsthatyouusedtomake:

a. withcashandnowyoumakethemwithDebitcard b. withcashandnowyoumakethemwithCreditcardc. withDebitcardandnowyoumakethemwithcashd. withCreditcardandnowyoumakethemwithcashe. withDebitcardandnowyoumakethemwithcreditf. withCreditcardandnowyoumakethemwithDebitcardg. Othercombinations

2. Whatistheaverageamountspentineachofthesetransactions?3. Haveyouusedyourdebitcardsmoresincethebanksshut?4. Haveyouusedyourcreditcardsmoresincethebanksshut?5. Haveanyofyourfriendsaskedtolendthemcash?6. Haveanymemberoffamilyaskedtolendthemcash?7. Haveanyofyourfriendsaskedtouseyourcreditcard?8. Haveanymemberoffamilyaskedtouseyourcreditcard?9. Haveyouspendmoremoneyoneverydaystuff/needsthelast3weeks?i.eInordertokeep

morestockofthings.10. Whatkindofpurchaseshaveyoudonemorethanusual?11. You,amemberofyourfamilyoranyofyourfriendshascancelledanyeventcauseofno

accesstocash?12. Haveyoupostponeanypayments(i.e.electricitybills,mobilebills)?Whatkindofpayment

instrumentyouusuallyuseforthesetransactions?13. Thelast3weekshaveyouorsomebodyyouknowappliedforcredit/debitcard?14. Howmanyvisitsdoyouusuallymakeinanordinarymonthtothebankinordertogetyour

salary?HowmanytimeshaveyoubeentotheATMinordertogetmoneythelast3weeks?15. Somepersonsinordernottoloosetheirmoney(incasewegobankrupt)theyinvest/spent

theirmoneyinexpensivegoods.I.e.theyboughtexpensivejewellery.What’syourview?16. Haveyouthoughtofchangingthewayyoupayforgoods/servicesinthefuturesinceyour

experienceofthelast3weeks?17. Haveyouusedcollaborativecommons/socialnetworkstoavoidspendingmoney/save

cash?I.e.Haveyouusedpublictransportinsteadofyourcar/liftsorsharingcommutingtoandfromwork?

29

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