According to the recently released Global Economic Prospects, the global economy will shrink by over 5% due to the pandemic in 2020. Digitized services were already on growth before the out-break of COVID-19, and now it is one of the most needed services for finance.
COVID-19 is not just a health crisis, but a public crisis hampering the financial needs of people. And this has turned out to be an economic crisis for people in developing countries. As reports of distress pour in from individuals, small businesses, and the financial institutions that serve them, it is clear that the financial inclusion community has a vital role to play in supporting the financial services ecosystem as part of the global response to the pandemic.
Digital finance refers to the transfer of payment or transactions made for any financial arrangements. Online transactions to be done via payment apps, transfer money to your family or friends, pay your bills, recharge your accounts, and many more. With one app, you can do a lot of things.
Digital financial services enable even the most remote areas with a steady internet connection to make financial transactions. There are three key steps for digital financing:
Technology in finance has made the life of people easier, especially in the current situation when the entire world is fighting with the pandemic. People don’t have to drive to pay their bills or recharge, send money to your friend, or donate – it’s just one tap away.
The question is – How do you get access and use digital services for financial purposes? Your payment app will be the one to let you access these services. Create your account, add your card, and start doing your transaction.
Several key changes that are taking the financial sector by storm as well as the challenges that come along with them;
Taking into consideration the situation, we are bound to follow the safety precaution for our own good. Staying home and not wandering out unnecessarily is the first step to it. With finance in mind, you go out to pay out your needy bills, but with digital financing, you have it in your pocket anywhere. Digital financing is convenient to use since it is,
Any transaction done via digital mode is regarded as digital payment. In digital payment, payer and payee, both use digital modes to send and receive money. It can also be called as electronic payment since it’s made through a device. For digital payments to take place, the sender of the payment must have a bank account, an online banking method, a device from which he or she can make the payment, and a medium for a transaction meaning that either he or she should have signed up to a provider or an intermediary such as a bank or a service provider. There are basically three types of the transaction;
Examples of digital payment apps are Paytm, Google Pay, Amazon Pay, PhonePay, and a lot more.
Digital payments remain at the forefront of tech progress in the banking industry. But with the advancement of the payment system, the main concern also rises for the security of transmissions. The security of digital payment remains a top priority for all service providers. Banks and payment services providers will only be profitable and trustworthy if their services are smooth and secure.
Blockchain technology promises to facilitate fast, secure, low-cost international payment processing services through the use of encrypted distributed ledgers that provide trusted real-time verification of transactions without the need for intermediaries such as correspondent banks and clearinghouses.
Advanced methods to secure payment environments include;
The COVID-19 emergency is impelling a massive move toward advanced business sectors and digital financing. Technology in finance has served both the individuals and service providers a great deal in this pandemic by reducing cost and opening a new market for opportunities.
If you are having more queries regarding how digital financial services help the world cope with COVID-19, then feel free to contact us.