FinTech and the COVID-19 Pandemic: Evidence from Electronic Payment Systems

57 Pages Posted: 4 Aug 2020

See all articles by Daniel Tut

Daniel Tut

Ryerson University- Ted Rogers School of Management

Date Written: July 26, 2020

Abstract

This paper investigates the effects of the COVID-19 pandemic on financial institutions and consumers’ adoption of FinTech in payments. We find that the pandemic: [1] Initially had a negative impact on the adoption of FinTech, but favorable short-term regulatory changes have reversed some of the negative effects [2] The use of all electronic payment cards has significantly declined during the pandemic except for charge cards. We find an increase in the use of charge cards as consumers shift towards cheaper forms of payment [3] The pandemic has magnified interbank contagion and liquidity risks and has reduced both domestic and international electronic fund transfers via RTGS. The pandemic has also resulted in a deterioration in the quality of commercial banks’ assets and balance sheets [4] Remittance inflows via FinTech platforms have significantly declined reflecting contractions in global economic activities.

Keywords: Covid-19, Coronavirus, Fintech, Mobile Payment, Central Banks, Financial Intermediaries, Financial Technologies, Banks, Interbank transfers, Diaspora Remittances, Settlement and Liquidity risks, clearing houses, financial stability, Pandemic, M-PESA, Digital Banking.

JEL Classification: E58, E52, E32, G20, G21, G28, G32, O55, O16, O33

Suggested Citation

Tut, Daniel, FinTech and the COVID-19 Pandemic: Evidence from Electronic Payment Systems (July 26, 2020). Available at SSRN: https://ssrn.com/abstract=3660987 or http://dx.doi.org/10.2139/ssrn.3660987

Daniel Tut (Contact Author)

Ryerson University- Ted Rogers School of Management ( email )

55 Dundas St. W
Toronto, Ontario M5G 2C3
Canada

HOME PAGE: http://sites.google.com/view/danieltut/home

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