COVID-19 has reshaped every aspect of our lives. It has impacted the world economy and altered the way we do business and make payments. By reiterating the importance of going cashless, the pandemic has boosted the adoption of digital payment methods. Our apprehensions about handling cash and coins, the need to maintain physical distance, and fear of touching foreign objects are vastly responsible for the sudden acceleration in the usage of digital modes like mobile wallets.
The digital payment market may witness a surge of 14.2%, going from $79,303 million this year to $154,082 by 2025, as per a report by Research and Markets. In the pre-COVID-19 era, some of the factors that increased the acceptance of digital payment options include the marketing of these payment options, higher e-commerce sales, and increased penetration of smartphones and the internet. In the last few years, we witnessed a major upwards trend in the usage of mobile and digital wallets in developing countries. However, the developed nations continued using other non-cash methods to make their payments. But the pandemic has significantly altered the scenario, and it might be here to stay.
Factors Altering the Mobile Payment Methods During COVID-19
Some factors that emerged due to the pandemic played a crucial role in bringing mobile wallet payments into the mainstream:
Following Social Distancing
One of the reasons for people to adopt mobile wallets to make payments is the need to maintain social distance. When using cash or cards to make a payment at a retail outlet, one comes in contact with things that many people have touched. Using currency notes also brings us in the proximity of people we are interacting with, which goes against the social distancing norms laid down to combat the ongoing pandemic.
Maintaining Public Hygiene
Cash and coins change a lot of hands and maybe riddled with germs and bacteria. The apprehensions associated with handling currency notes or touching keypads have been an accelerator in boosting the cashless movement. Contactless payments through mobile and digital wallets are much safer than the traditional methods of paying.
Shift to e-Commerce
More and more people are now opting for online shopping to avoid coming in contact with cashiers, other shoppers, and things in general. Shopping online also helps follow the social distancing norms necessary to keep the Coronavirus at bay. Making payments through mobile wallets, or for that matter, any other digital payment method is a more convenient option when buying things from e-commerce websites.
Receiving Stimulus Packages
Governments across the world responded to the economic repercussions of COVID-19 with stimulus packages for people who lost their employment or incurred losses in their business. The situation warranted for digital payment methods and the availability of mobile wallets made it convenient for the common public receiving the stimulus and use the money to buy essentials instantly. E-wallets were also useful for the unbanked population, allowing them to receive money even if they do not have a bank account.
Making Online Donations
People around the world came together to help those in need during the pandemic and made donations. Considering that visiting each other and making cash transactions was not feasible, people resorted to using mobile wallets to make donations as well as for making peer-to-peer (P2P) transactions.
Advantages of Mobile Wallets for Users
Mobile wallets are quite convenient. You can use them to pay bills, recharge your phones or DTH, make P2P transactions, receive payments, pay on e-commerce websites, as well as make payments at retail stores. Let’s have a look at some of the advantages of choosing electronic wallets over traditional payment methods.
- Time-Saving – Right from adding money to your mobile wallet to paying at checkout in retail stores, all functionalities of a mobile money wallet can instantly be carried out to save time.
- Convenient – As an m-wallet is nothing but an application on your smartphone, it is far more convenient than cash or cards.
- Easy to Use – You can save your details in the wallet and tap the screen a few times to securely make your payment at retail stores or send money to friends.
- Secured – Mobile wallets feature advanced settings to avoid unauthorized access to your info. You can use biometrics, passcodes, and PINs to safeguard your wallet app.
- Easy to Track– It is easier to track your spending when paid from e-wallets as it keeps a log of all your transactions with all the details.
Why Should you ditch Cash and Cards for Mobile Wallets?
An electronic wallet has multiple advantages over other methods of payments such as cash and cards. Not only is it safer during the ongoing pandemic but also more convenient and secure for everyday transactions. You can directly transfer money from your bank accounts to your wallet and even save your card details on the wallet to pay from them when the need be. Digital wallets are more practical in the current scenario for maintaining public hygiene and avoiding currency notes and keypads of PoS devices or ATMs. As they are accepted at most retail stores and online platforms, it gives a much-needed break from carrying cash and multiple cards. Moreover, you also get rewarded with discounts and cashback for paying through wallets, making it a more lucrative option as compared to cash and cards.
Financial service providers and banks looking for Mobile Money Solutions to offer electronic wallets to their customers must explore the comprehensive and secured MobiFin Mobile Wallet Solution by Panamax. It can help you launch an electronic wallet linked to your core financial ecosystem that allows end-users to send or receive money without using bank services. The solution can easily handle high traffic with zero downtime and allows self-care via the web, mobile application as well as USSD. The highly customizable Enterprise Mobile Money platform supports a wide range of wallet profiles for added convenience.