While the precise effects of the Covid-19 pandemic are still under debate, most experts agree that restrictions keeping people in their homes for much of 2020 and into 2021 had a net positive effect on digital payments—especially in developing economies. A recent report from the World Bank agreed, noting that since the start of the pandemic, more than 40 percent of adults in developing economies other than China made a digital payment for the first time.
According to Global Findex 2021 from the World Bank, two-thirds of adults globally made or received digital payments in 2021. Even in mature markets, the pandemic pushed the share of people who had done so from 88 percent in 2014 to 95 percent in 2021. For developing economies, the increase was even more stark—only 35 percent of the population had made or received a digital payment in 2014 while nearly 60 percent did in 2021.
The continued migration of payments to digital channels will be an important way to ensure that payments are making their way to the proper recipients, said World Bank president David Malpass.
“Importantly, the digital revolution is a powerful tool to improve governance,” Malpass noted. “Social programs can now channel transfers directly to their beneficiaries’ mobile phones, reducing leakage and delays. This potential became a reality during the Covid-19 crisis, helping cushion its impact on livelihoods. Digitalization also increases transparency as money flows from a country’s budgets to government agencies to people, reducing the scope for corruption.”