Responsible Finance Forum

COVID-19: BOON AND BANE FOR DIGITAL PAYMENTS AND FINANCIAL INCLUSION

Nana Yaa Boakye-Adjei
24 July 2020

Many emerging market and developing economies (EMDEs) have made a significant amount of progress in the areas of digital finance in terms of usage of digital payments in everyday life, bringing people into the formal economy, and also as a key contributing sector to GDP. In the ninth FSI Brief, Nana Yaa Boakye Adjei compares pandemic-induced measures taken by authorities worldwide to boost digital payments and looks at how they have helped financial inclusion.

Three types of measures have been observed: direct public support for fintech providers and users; the implementation of facilitation strategies; and the use of sandboxes. The opportunity that Covid-19 presents for improving access to digital channels is a very small silver lining for those economies that have been working towards greater financial inclusion of their citizens. Safeguarding current gains made in adoption, and pushing for further usage of digital channels, should help both industrialised and EMDEs weather the continuing storm of Covid-19. At the same time, this should be done with a clear view of mitigating financial crime and ensuring consumer protection.

Originally published on the BIS webpage