Background
The Covid-19 crisis has led to very significant changes in the financial and banking mechanisms and means related to various economic activities, especially those related to retail trade activities, in light of a rapid, and perhaps unprecedented, shift from “cash economy” to “digital economy”. Although the shift to the digitization and the increasing reliance on digital financial and banking operations had started many years ago, and although the purchasing habits of consumers around the world have changed in parallel with the developments of financial technology and the development of electronic payment systems and tools before the outbreak of the pandemic, the general lockdowns imposed by the pandemic, the necessities of social distancing, and the avoidance of customers to adopt cash in commercial transactions and purchases, have led to the expansion of reliance on digital payment
The Covid-19 crisis has led to very significant changes in the financial and banking mechanisms and means related to various economic activities, especially those related to retail trade activities, in light of a rapid, and perhaps unprecedented, shift from “cash economy” to “digital economy”. Although the shift to the digitization and the increasing reliance on digital financial and banking operations had started many years ago, and although the purchasing habits of consumers around the world have changed in parallel with the developments of financial technology and the development of electronic payment systems and tools before the outbreak of the pandemic, the general lockdowns imposed by the pandemic, the necessities of social distancing, and the avoidance of customers to adopt cash in commercial transactions and purchases, have led to the expansion of reliance on digital payment methods. On the other hand, firms on their part have encouraged their customers to adopt electronic payment methods to avoid overcrowding in stores and using other innovations, such as mobile phone payments, electronic wallets, and crypto-currencies. Stores have also reduced the minimum card payment to record levels in order to encourage customers not to use cash.
Statistics indicate that the volume of digital payments globally has increased from $4.7 trillion in 2019 to $5.4 trillion in 2020, and it is expected to jump to 6.6 trillion dollars by the end of 2021. Thus, it is estimated that the pandemic has led to an increase in digital payments by nearly $2 trillion in just two years. This trend is also expected to continue, as the volume of digital payments is expected to reach $10.5 trillion by the end of 2025, where the digital retail trade will constitute the largest share of the total digital payments market. Based on these expectations, major players in the digital payments market such as Amazon, PayPal, Apple, Facebook, and Alibaba are dedicating more investments to develop their platforms for digital payments and retail trade, creating integrated online shopping systems and creating new business models and digital payment methods, especially online digital payments through mobile phones, which are expected to account for more than a third of digital transactions.
In parallel with the growth in digital payments, the digital remittances market has similarly developed as a result of the increase in money transfers by migrants to their home countries in order to support their families and mitigate the repercussions of the pandemic on them, with an increasing reliance on digital transfer network operations, specifically digital wallets and mobile applications. In addition to the lockdowns and the unwillingness to come in person to banks or money transfer agencies, the ease of use of electronic transfer methods, their low cost, speed and convenience, and the no need to fill out forms and papers, all have led to a significant increase in cross-border electronic transfers.
Accordingly, and to shed light on the rapid developments in the retail trade and digital payments market, and the cross-border digital remittances market, and to study the great importance of digital transformation in terms of trade and how to take advantage of digitization in increasing remittances due to their critical role in sustainable development, the Union of Arab Banks holds A conference entitled “Recent Trends in Retail Payment & the Impact of COVID-19 on Digital Remittances”, during the period 26, 27 and 28 August 2021, to represent a regional and international platform to discuss enhancing the utilization of electronic payment methods and digital financial transfer platforms, with the aim of developing electronic trade, reducing the cost of remittances and increasing their volume, thus activating their contribution to financing development in the Arab region.
Topics covered
- Trends of the digital economy in light of the and beyond COVID-19 pandemic
- Prospects for e-commerce and digital payments
- Prospects for cross-border digital money transfers
- Changes in the structure of financial and banking services in light of digital transformation
- Reducing the cost of cross-border electronic money transfers
- Trends in consumer behavior in light of digitalization
- Follow up of Arab banks to the global digital transformation
- Partnerships between banks and fintech companies
- Cross-border transfers using digital and crypto-currencies and e-wallets
- Challenges of compliance and control over payments and digital remittances, and the risks of Money Laundering and terrorism financing operations
- Cyber risks associated with digitization
