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

49 Pages Posted: 4 Aug 2020 Last revised: 8 Mar 2022

See all articles by Daniel Tut

Daniel Tut

Toronto Metropolitan University- Ted Rogers School of Management

Date Written: March 2022

Abstract

This paper investigates the effects of the COVID-19 pandemic on financial institutions and consumers' adoption of FinTech in payments. We find that in Kenya:

1. The COVID-19 pandemic has accelerated the adoption and increase in payment concentration via FinTech. We document an approximate increase of 54% in mobile banking transactions, an increase of 19.56% in mobile banking agents and an increase of 14.56% in mobile banking accounts.

2. The use of all electronic payment cards has significantly declined during the pandemic.

3. The pandemic has magnified interbank contagion and liquidity risks and has reduced both domestic and international electronic fund transfers via both the Real-Gross Settlement system (RTGS) and via the automated Clearinghouse (ACH).

Overall, our results shows that FinTech not only partially alleviated the negative impact of the COVID-19 pandemic during Q1 but that the pandemic has also accelerated consumers' adoption of FinTech and digital onboarding especially in Q3 and Q4.

Keywords: COVID-19, Coronavirus, Fintech, Mobile Banking, Financial Technologies, Banks, Interbank Transfers, Kenya, Africa, Clearing Houses, Financial Stability, Settlement and Liquidity Risks, 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 (March 2022). Available at SSRN: https://ssrn.com/abstract=3660987 or http://dx.doi.org/10.2139/ssrn.3660987

Daniel Tut (Contact Author)

Toronto Metropolitan 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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