Pandemic will accelerate the rise of digital payments

Outlook

The COVID-19 pandemic will accelerate the switch to digital payments worldwide. Since cash is dirty, expensive to print and circulate, and more easily evades financial transparency norms, a growing number of businesses and consumers will switch to digital payments, even for in-person purchases.

As consumer preferences change, both service providers and retailers are adopting an omnichannel business model offering a seamless offline and online experience. These models depend on a secure and simple digital payments infrastructure. Cross-border services and goods trade, facilitated by online platforms, will also increase the use of cashless financial tools.

Impacts

• As ever more businesses develop their digital presence, the cybersecurity needs of industry will multiply sharply.
• The popularity of digital wallets of companies such as Google, Apple and Facebook will intensify calls for tighter regulation of 'big tech'.
• Growing use of digital financial transfers should help reduce fraud, tax evasion and money laundering.
• Robust regulatory frameworks hold the key to wider adoption of cryptocurrencies and stablecoins.
• Mobile money will remain important in emerging markets, where formal banking and digital access is constrained.