DFS provide secure, low-cost and contactless financial tools directly to your account, which has been particularly useful during the spread of Covid-19. Furlough schemes across Europe have meant non-essential workers have been able to stay at home which has incentivised the ability to self-isolate; simply put, DFS have fewer health risks than in-person cash-based relief. More than that, digital payments and transfers are more cost-effective according to the Better Than Cash Alliance
. Above all, things like E-commerce payment systems allow for speedy transfers to targeted households and individuals, which is crucial for those in need of financial assistance right now.
With the development of Fintech (and if central banks issue digital currencies), there’s potential for governments to track spending data and see which sectors are in decline and in need of financial support. More complex data revealed through digital currencies allow for insights into transaction volumes and values; this of course will be dependent upon a country’s privacy laws. The scope of more digitised payments and transfers could also improve visibility for tax payments, evasion and corruption, which will be particularly useful for increasing tax revenue during Covid-19.
So we can see from the outset the potential DFS has right now for Covid-19 relief. Furthermore, there is even the case made in behavioural science
for more digital financial inclusion through DFS; small ‘nudge theory’ tactics such as offering digital transactions at cash-out as well as offering the ability to pay for healthcare and financial services without visiting a branch could transform accessibility for places in the Global South (that are more dependent on in-contact meetings to access resources), whilst maintaining social distancing during Covid-19. Africa and Asia are leading the way, with countries such as Ghana, Kenya and Uganda as front runners for more digital inclusion with better digital payment services.