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COVID-19 drives increase in digital payments globally – World Bank

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Written by Maritime First

The World Bank says the COVID-19 pandemic encouraged financial inclusion, leading to an increase in digital payments.

This, it stated, was amid the global expansion of formal financial services.

It stated in its latest Global Findex 2021 database released on Wednesday that the expansion created new economic opportunities and narrowed the gender gap in accounts ownership.

It also built resilience at the household level to better manage financial shocks.

“In low and middle-income economies (excluding China), more than 40 per cent of adults who made in-store or online payments using a card, phone, or the internet did so for the first time.

“The same was true for more than a third of adults in all low and middle-income economies who paid utility bills directly from a formal account,’’ it stated.

The report showed that in India, more than 80 million adults made their first digital merchant payment after the start of the pandemic, while in China more than 100 million adults did.

It added that two-thirds of adults worldwide now make or receive digital payments, with the share in developing economies growing from 35 per cent in 2014 to 57 per cent in 2021.

“In developing economies, 71 per cent of people have accounts in banks or in other financial institutions or with a mobile money provider, up from 63 per cent in 2017 and 42 per cent in 201,’’ it added.

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The report said that mobile money accounts drove a huge increase in financial inclusion in Sub-Sahara Africa.

The World Bank Group’s President, David Malpass, said the digital revolution also catalyzed increases in access and use of financial services across the world.

Malpass said this transformed how people made and received payments, borrowed, and saved.

He said some of the policy priorities to mitigate reversals in development from the ongoing overlapping crises included creating an enabling environment and promoting the digitization of payments.

Malpass listed others as an increased broadening of access to formal accounts and financial services among women and the poor.

The Global Findex database is the World Bank’s most comprehensive data set on how adults save, borrow, make payments, and manage risks.

It was launched in 2011 with funding from the Bill and Melinda Gates Foundation.

The database has been published every three years since then.

 

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