DIGITAL PAYMENT SYSTEMS IN DEVELOPING NATIONS

Payment systems are the distribution end of financial assistance, and speed and efficiency are of paramount importance in leveraging these systems. Digital payments platforms have proven to be extremely effective in allowing people to buy items and make and receive payments at a distance, without any physical presence or cash something that is increasingly essential in this age of social distancing. These platforms have begun scaling in many emerging markets, and beyond rapid digital payments, they offer basic account functionality particularly important in countries where 60-80% of people often do not have a traditional bank account. These digital accounts already serve as a destination for government benefit and income support payments, across the world. Yet as the pandemic progresses, gaps and challenges in the payments and banking systems are becoming visible in many countries often driven by the lack of formal ID and the required Know-Your-Customer registration processes. Without effective identification, payments cannot be effectively targeted or delivered to the individuals or SMEs that need them and it’s almost impossible to confirm that these payments have reached their intended target. Unless these payment system gaps are addressed, inequality will only be exacerbated, worsening an already-grave economic crisis.