According to the new research by MasterCard, it has been found that the use of digital payment technologies including mobile money (MoMo), Bitcoin and other cryptocurrencies have boosted especially during the Covid-19 pandemic.
Purchases conducted globally via online platforms generated an extra of around $900 billion in the first quarter of 2021. Moreover, the amount of money spent on digital commerce is expected to grow to $11.6 trillion by the end of the year, as per the report by Juniper Research. But why are people flocking to using these digital payment technologies rather than sticking to the traditional ones?
The MasterCard survey revealed that about 84% of the consumers now can access numerous digital payment alternatives including QR Codes, biometrics, digital currencies, etc., compared to what was available in the market a year ago. It is also expected that about 90% of the customers will be in a position to use at least one ‘emerging payment method’ by 2022. While mobile transactions might occupy 79% of digital transactions by 2025.
Most of these technologies are blockchain-based. These options ensure personal safety, transparency, low cost, security, speed, effectiveness, hygienic and convenience when transacting. Besides, they can guarantee financial inclusion to the unbanked population of the world.
There are over half a billion mobile money accounts in Sub-Saharan Africa, according to CoinIdol, a world blockchain news outlet, with over 114 mobile money providers operating in the continent. During the pandemic, global MoMo transaction value skyrocketed by about 22% to hit US$767 billion, as per the data by GSMA and Statista.
One of the reasons why e-payments have become increasingly used during the pandemic times is because of their convenient and hygienic nature.
During the pandemic era, healthcare organizations and governments have put in place standard operating procedures (SOPs) to use in preventing the spread of the virus. Some of the SOPs include sanitizing hands and other places or tangible products, social distances including when inside the bank, wearing face masks, and many others.
So, a customer using cryptocurrency or mobile money can dodge all of these SOPs, and still make payment transactions for the purchases of goods and services. What is more, one does not have to even leave one’s home and endanger oneself by going to a financial institution. In this era of Bitcoin, a customer doesn’t need to line up, like the case with banks, to make payments or buy commodities from the markets. Therefore, using cryptocurrency is not only hygienic but also convenient.
Besides, digital payment solutions are a true salvation to the unbanked populations of developing countries, where many citizens are forced to work abroad. In this case, they need a working solution to send money back home and support their families. While banks fail to provide them with high-quality services, cryptocurrencies and mobile money solutions succeed. Probably, that is the reason they are so popular in these countries.
For instance, most African migrants choose digital payments instead of bank transfers to send money to their families. While governments of some countries are not really friendly to payment innovations and sometimes even press on them, their popularity is not going to subside anytime soon.
If the Coronavirus pandemic doesn’t stop soon, MasterCard thinks it is likely that about 60% of customers will dodge businesses that don’t allow cryptocurrencies, mobile money and other e-payments options.
What do you think, is it likely that people will turn away from businesses that don’t allow digital currencies? Let us know in the comments below!