The outbreak of COVID-19 has become one of the biggest threat to global economy and financial markets. With the increasing number of Coronavirus cases, various measures have been taken by the countries over the world including nationwide lockdown, limiting the movement of people, bringing halt to transportation, shutting down public places, urging people to stay indoors, maintaining social distance, work from home, to bring the situation under control and to avoid the further transmission of virus. However, the COVID-19 pandemic has led to boost in digital payments due to social distancing norms and nationwide lockdowns. The virus has “ quickened the pace of digital payments adoption” even in small cities and there has been huge demand from merchants for contactless payment solutions, said Navtej Singh, chief executive officer for digital payments with HITACHI Payment Services Ltd. Digital payments, once a convenience, have become necessity during pandemic.
Digital Payments: Easy and Contactless
In countries like India, Coronavirus outbreak have boosted the digital payments which the demonetization (4 years ago) had failed to accomplish. The use of digital payments is rising in every field, starting from groceries, electricity bills, school fees and taxi fares. In order to maintain social distance and refrain from going out of the house has given a fresh boost to the digital payments. With the concerns of transmission of the Coronavirus through exchange of cash (physical currency like notes and coins), online payments even at local grocery shops have increased. Mumbai entrepreneur Raje says, “It just take three seconds to complete a transaction, it’s hassle-free and every local vendor now has enabled online payments on their smartphones.”
Digital Fund Transfer: Rebounded
The number of transactions on the Unified Payments Interface, a platform created by India’s largest banks in 2016, touched an all-time high in past few months because people were afraid of handling banknotes amid the pandemic. The digital fund transfers from banks which had decreased, have also re-surged because of COVID-19 situation. Online delivery services have also encouraged customers to make transactions through digital payments. Sharma says, “this is a consumer-led move toward digital payments… unlike demonetization, where there was no supply of currency.”
Digital Payments as Saviour
With the increasing cases of Coronavirus, countries in South Africa have also shifted their preference to digital payments. Africa’s leader in digital payments adoption –Kenya-has turned to mobile-money as a public-health tool. Safaricom, the country’s largest Teleco, has taken several measures to reduce the usage of physical exchange of money amid COVID-19.
The Bank of International Settlements (BIS) had published a report stating about the worldwide surge in digital payments in last few months. The digital payments and digital currencies have certainly key role in pandemic as well as post-pandemic situation. As the digital payments are contactless, hassle-free, efficient and secure, they definitely make our transaction easy, saves time and will likely see more boom in near future.
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