FinTech and the COVID-19 Pandemic: Evidence from Electronic Payment Systems
57 Pages Posted: 4 Aug 2020
Date Written: July 26, 2020
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:  Initially had a negative impact on the adoption of FinTech, but favorable short-term regulatory changes have reversed some of the negative effects  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  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  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: Suggested Citation