<p>Stimulus payment programs have been instrumental in supporting economic activity during the COVID-19 pandemic, yet their public health implications remain underexplored. This study examines a unique policy in Seoul, South Korea, which restricted stimulus spending to recipients’ residential cities, to assess its potential in mitigating virus transmission. Using credit card transactions, mobility records and COVID-19 case data, we apply a triple difference-in-differences approach to analyze how the policy reshaped spatial consumption patterns. Results indicate that while the stimulus program boosted overall spending, it also significantly redistributed spending geographically. The restriction led to reduced consumption outside Seoul and a greater concentration of local spending, effectively limiting mobility. Spillover analysis shows localized consumption had a lower impact on infection rates than cross-neighborhood consumption. Simulations suggest the geographic restriction reduced COVID-19 cases by 17% versus an unrestricted scenario. These findings suggest geographically targeted stimulus policies can balance economic recovery with public health objectives.</p>