Digital payments: the winners of COVID?

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The pandemic has further accelerated society’s interaction with digital payments, forcing the industry to adopt technology in just a few months. Consumers have stopped going to physical locations and started going to URLs, adding thousands of users to the world of digital payments. The virus has cemented online consumption habits that will continue after its long-awaited eradication.

Social conditions have created an urgent need for consumers to adapt, forcing them to be proactive, fast and efficient in their use of digital payments. With or without COVID, the expectation that users have not diminished is that, regardless of the context, they want to make a quick purchase and be offered many options from providers.

It was expected that generations Z and Y would lead the digital payments revolution , but the virus has forced older generations to surrender to this method. After all, all crises are simultaneously destructive and creative for innovation.

This was a revolution already called for by the United States Agency for japan whatsapp number database Development (USADI), which when it launched its digital strategy five years ago to promote the acceptance of digital payments, did not expect that a highly transmissible and harmful virus could help this fight for digital payments.

The creativity of cybercriminals

The significant increase in the use of digital payments, driven by lockdown and social distancing measures, has brought another virus to the surface – fraud .

The exchange of physical cash has dropped dramatically as it was seen as a potential source of transmission of the virus. With this warning message, citizens have started to adopt another form of payment, completely discarding notes and coins. According to the Initiative Deutsche Zahlungssysteme , a payments industry organization, Germans are stopping using physical cash for hygiene reasons, and in the United States, more than 50% of consumers say they do not want to use cash in favor of credit cards (data from Travis Credit Union ).

It is a change that was already underway, but has been fully accelerated by the new social and economic context. However, it has also increased concerns about potential security risks for businesses and consumers.

Potential risks associated with digital payments include theft of bank account numbers and personal information . While stealing data at the point of transaction is difficult, there may be situations where cybercriminals attempt to access databases containing credit and debit card information.

The "thieves" have also changed their tactics. Thousands of people receive many messages and emails every day with exuberant prizes, wrapped in a web so credible and well-founded that it almost seems true. In fact, there are reports of "Covid-19 medical packages" being sold, which aim to collect personal information with the ultimate intention of stealing money. We have also heard reports of scams targeting the elderly, promising to do their shopping so that they are not at risk of infection.

Interpol's data is clear: 900,000 spam messages, 700 malware attacks and 48,000 malicious domains were discovered in the first four months of 2020.

Digital payments: a future without cash in wallets

If in 2019 the total number of non-cash payments in Europe increased to 98.0 billion compared to the previous year and with cards representing 48% of a total of €162.1 trillion, let's imagine what it will be like in 2020.

Europe has a mature and well-developed digital payments market that is causing a decline in bank branches and ATMs year after year, revealing Europeans’ move away from physical cash. The Chinese are currently the preferred consumers of cards, with almost 70% of Chinese people using digital payments daily to pay for their purchases.

But are there still countries that are highly dependent on cash? Yes! Latin America and India are two examples of this reality, but we are also beginning to see the development of an electronic payment culture. This development is not as fast as in other parts of the world due to distrust in banking organizations, as well as a lack of knowledge and literacy about this form of payment, combined with the economic conditions of citizens.

In the not-too-distant future, we may start making payments using our voice, cryptocurrencies, and biometric payments (including facial recognition).

The truth is that the COVID-19 pandemic has disrupted the way consumers transfer and make payments. The widespread fear of the virus’s transmission was the trigger for a trend that was already taking hold around the world. Businesses adapted, consumers kept buying, and the world kept turning.

Few sectors will emerge from this pandemic crisis with profits and benefits, but the world of digital payments is not included in this group. It is, in fact, one of the big winners of COVID-19.