Uptake of digital payment methods and bank account ownership spurred on by the Covid pandemic

According to The World Bank, the COVID 19 pandemic “spurred financial inclusion.” The2021 release of The Global Findex Database found that during the pandemic, many people around the world opened their first bank account and influenced people to turn to digital payment methods for the first time.

Increased bank account ownership

As of 2021, The World Bank reported that just over three quarters (76%) of adults worldwide now have a bank or mobile money account. This figure is up from 68% in 2017 and 51% in 2011.

In previous Findex surveys over the last decade, much of the growth in account ownership was concentrated in India and China. The 2021 survey however, found that recent growth was evenly distributed across more countries, with the percentage of account ownership increasing by double digits in 34 countries worldwide since the 2017 survey.

It also found that about 36% of adults in developing countries currently receive some sort of wage or payment into an account. Analysis of this data suggests that receiving a payment into an account instead of cash can kickstart people’s use of the formal financial system.

The worldwide gender gap in bank ownership has narrowed!

For the first time, the 2021 survey found that the gender gap in bank account ownership has narrowed.  Since 2017, the gap between men and women narrowed from 7% to 4% globally and from 9% to 6% in low- and middle-income countries.

Bill Gates further explains why having a bank account is so important; “In Sub-Saharan Africa, for example, the lack of an identity document remains an important barrier holding back mobile money account ownership for 30% of adults. Over 80 million adults with no account still receive government payments in cash. Digitalising some of these payments could be cheaper and reduce corruption.”

Increased use of digital payments

Along with opening bank accounts, new data shows that many people adopted digital payment methods during the pandemic. It is reported that in low and middle-income economies (excluding China), 40% of adults who made merchant in-store or online payments using a card, phone or the internet did so for the first time since the start of the pandemic.

Similarly, in India, more than 80 million adults made their first digital merchant payment after the start of 2020. Digital payments were also widely adopted in China, with 100 million adults using the internet to make a payment for the first time in the last two years.

World Bank Group President David Malpass stated that “promoting the digitization of payments, and further broadening access to formal accounts and financial services among women and the poor are some of the policy priorities to mitigate the reversals in development from the ongoing overlapping crises.”

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