How Mobile Payments Help People During the Pandemic

The Covid-19pandemic meant organizations had to be shut down, people had to socially distance themselves and everyone was stuck in their homes. Naturally, this led to a global economic downturn and the financial situation was highly impacted. But financial transactions can’t just be shut down in this digitized world. After all, digital financial services have been embraced by individuals and organizations alike.

As the Financial Access Survey (FAS) of IMF defines, mobile money is a pay-as-you-go digital medium of exchange and store of value facilitated by a network of mobile money agents. (Mobile Money in the COVID-19 Pandemic) Mobile money services do not explicitly require a presence of a bank account as in the case of mobile banking. The only primary requirement is a mobile phone with access to these facilities. This concept has been rapidly adopted by many low and middle-income countries. According to a report by WorldPay, the coverage of mobile payments was 22% of the global point-of-sale payments which could raise to 29.6% by 2023. The contactless process of mobile payments has contributed to the presence of financial transactions without sabotaging the users’ physical and mental safety.

Some of the characteristics of mobile money have made their presence invaluable to the global financial community.

• High Market Penetration:  Mobile money has strengthened its footing in low and middle-income countries. The epicenter of the same has been considered to be the continent of Africa, although the growth has been significant globally. These high rates of penetration mean that they are a readily available option for carrying out financial transactions especially during the pandemic. It can also be used as a substitute for direct cash benefit transfers for social assistance programs by various governments.

• Minimal contact physically: The one point which all the experts have been saying about this virus that we should socially distance ourselves and minimize physical contact. Mobile payments are frontrunners at this task already before the virus coming into context. Further, there are a significantly larger number of mobile payments access points as compared to traditional banking points like ATMs. The only requirement for carrying out such transactions is a mobile phone, and all the financial activities like paying your bills, making transfers, remittances, etc. will on the fingertips of your hands.

• Usage availability for even the unbanked: Mobile money allows even those individuals who don’t have bank accounts to use their system to carry out their transactions. Many low and middle-income countries, where access to banks can be difficult or limited or don’t have the trust of the common people have taken up the opportunity to provide the people greater access to mobile money systems. The unbanked are allowed to carry out fund transfers, and sometimes enjoying savings and other financial services. For example, a couple of Kenyan commercial banks have partnered with M-PESA to offer additional financial products to the customers.

With the pandemic taking place and countries realizing the importance of mobile payments in this situation, many of them have taken various measures to facilitate the growth of these platforms. Where some countries have been taking fee cuts on carrying out financial transactions, some have been increasing the limits of fund transfer and payments and giving greater flexibility in KYC onboarding.

Like everything, mobile money is not free from its limitations. With a threat to profitability, the platforms might charge from other points. There is also the question of customer protection and privacy in this digital age. There are risks associated with concentration and operation too. Sometimes, there might be times when there is an arbitrage in a regulatory environment.

But with the growth of mobile money, there also arise the concepts of availing financial services through mobile apps like getting an instant loan or salary advances. For all that Fibe comes to your rescue-the one-stop solution for all your instant cash needs.

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