Washington DC, 1 July 2022 (TDI): The Covid-19 pandemic which has been changing the world for more than two years, has boosted digital payments worldwide, according to The World Bank’s 2021 Global Financial Index.
Users have adopted new financial habits and are now keener to use digital banking solutions.
New economic opportunities were created due to the way the covid-19 pandemic changed everyone’s lives.
Because of the pandemic, people changed multiple habits, including their financial habits.
Payment habits have changed as well. Thanks to innovative online payment methods, operations have become easier and more user-friendly.
The social distancing measures imposed to curb the covid-19 pandemic drove technology development to a new level.
The need to perform activities remotely promoted new ways of using technology.
For many people who had never done a digital payment, it was the first time. Owning a bank account became a necessity for many.
Facts and figures
According to the Global Findex database updated in 2021, 76% of adults possess a bank account worldwide.
In the last 5 years, the bank account ownership ratio of young people has doubled in more than 30 countries. The usage of digital payment methods has especially increased in low and middle-income countries.
In China, over 100 million adults made their first digital payment when the pandemic started. In the same vein, over 80 million adults from India made their first digital payment at the same time.
As of 2022, two-thirds of adults worldwide use digital payment methods. Before the pandemic, the proportion was lower.
Nevertheless, bank account usage in low and middle-income countries is novel for many people. Not everyone adapts easily.
For instance, In Sub -Saharan Africa, the lack of an identity document constitutes the biggest barrier between people and the banking system. Millions of people lacked access to bank accounts during the pandemic.
Instead, they received money from the government in cash. It leads to multiple problems such as corruption, robbery, and tax evasion.
A similar situation occurred in Peru during the pandemic. People that lacked a bank account had to go personally to receive the cash donated by the government. Long queues were created and there was no social distancing. As a consequence, covid cases increased.
Hence, the importance of digital payment methods increased. They allow fast, secure operations to be made. In order to avoid the aforementioned problems, administrations should focus on facilitating access to the banking system.
To sum up, the covid-19 pandemic changed the world on many levels. Millions of people opened bank accounts for the first time and started using digital payment methods. These new financial habits are here to stay.
