Will MasterCard permanently shift to digital methods in 2021?

Monetary impact of COVID-19, along with enduring fluctuations in digital client spending habits, online banking progress, FinTech disruption and prospects to bolster financial inclusion are analysed comprehensively by The MasterCard Economics Institute and has released Economy 2021, a global outlook report. This institute was launched preceding year to analyse macroeconomic trends through the lens of the clients.  They released this report for the benefit of government and businesses of all sizes to find a path forward after a transformative and gruelling 2020. From the analyses of the crucial trends, there is the sharp swing to digital platform utilisation, powered by transformed client behaviour, flexibility margins and the requirement to produce business revenues beyond brick and mortar locations.

Digital conversion efforts are increased as 73% of clients in Middle East and Africa (MEA) were spending more online than before the pandemic. The current trend away from cash is expected to be more determined in UAE economies, which already has a young, digitally savvy population and a buoyant e-commerce organisation. According to Economy 2021, e-commerce swiftly becomes a way to embrace older generation and added convenience along with lower costs for clients will contribute to the evolution of digital demand in 2021. In regions such as East Africa, IMF research found that traditional banking service was declining but expanded access to digital tools and services increased financial inclusion. This trend can also be seen in digitally advanced areas such as Ghana, Kenya and Uganda. FinTech disruption in online banking is set to be a key driver in bringing the population into the digital economy, especially in East African economies. Leveraging cutting edge technologies to connect consumers to small businesses and micro merchants is another aspect of advancing financial inclusion as per Economy 2021.

The increasing internet access and improving digital innovation offers more possibilities for digital payments. Partnership with mobile network operators, ongoing work on government disbursement solutions, wage digitization of private sector workers etc., are the efforts taken by MasterCard to bridge the financial gap. Middle East and North African region have the largest youth population in the world and serves as a key factor for regional economies to leverage the growth of e-commerce and to advance the financial inclusion because the younger generation are mostly first-time mobile users. In addition to the advantages, this demography also sets out associated risk with increasing youth unemployment and also climate changes with both long and short-term risks. David Mann, Chief Economist, Asia and MEA, MasterCard said that they are heading for a multi-speed global recovery favouring the low touch more than the high touch, by enabling small businesses and merchants to accept digital payments. So that this can connect more people and communities to financial freedom. As the mobility restrictions are lifted gradually the increasing leisure travel serves as a key GDP factor in many MEA economies. Other traditional tourism economies such as Kenya and Egypt also get benefitted from international tourism’s eventual return.