The global digital payment industry saw a boom amid the pandemic and several challenges. 

According to the Food and Agricultural Organization of United Nations report, by April 2020, almost 50% of all private purchases in Peru were carried out online because of the lockdown. 

This is not a unique situation, since the Covid-19 pandemic had a great impact on the fintech industry and digital payment sector worldwide. The social distancing and lockdown enforced by the pandemic had an adverse effect on many industries including retail, tourism, hospitality, etc. Many enterprises were shut down and we witnessed mass layoffs. However, the onset of the pandemic had a positive impact on digital transformation across the industries. The rapid adoption of digitization and automation by almost all sectors led to a boost in the economy and helped in recouping from the pandemic. 

The digital payments industry and Fintech were both impacted and benefited from the pandemic. India is now one of the leading Fintech markets with its booming digital payments sector. The research and Markets study revealed that the Indian Digital Payments industry will grow at 27% CAGR to reach INR 7, 092 trillion by FY2025. 

Facing the Hiccups to Emerge with Strength

The pandemic induced isolations and lockdowns across the globe and many growing payments market was affected by the uncertainty. The travel and hospitality industry was at the receiving end since consumer spending in this sector witnessed a huge decline. There was a collapse in demand in the travel, entertainment, and retail sectors and the lockdowns hit the physical stores that are digitally less developed. 

Although these hiccups affected the fintech and payment market, the restriction on movement increased digital payments across the globe. The National Payments Corporation of India (NCPI) launched the #IndiaPaySafe campaign in social media that encouraged its citizens to adopt digital payment and net banking to stay safe during the pandemic. As he spoke to CNBC, Manish Patel, founder, and CEO of Mswipe revealed, “Mswipe witnessed growth in contactless payments from 13 percent of total transactions in January 2020 to 30 percent of total transactions in January 2021.” Consumers shifted to digital platforms to have a convenient and safe experience during the pandemic. 

According to a Research and Markets report, nearly 50% of global shoppers were using digital payments more than before the pandemic, and the majority plan continues doing so after the virus is contained. 

Digital wallets, contactless cards, WhatsApp payment features, QR code checkouts, and net banking accelerated the digital payment system. 

Fintech companies and banks embraced digitization and automation to retain their customers and provide a hassle-free service to them. Recent reports suggest that India emerged as the largest fintech market in Asia. High penetration of disruptive technologies and digital payments has enhanced the fintech sector in India and the world. Providing contactless financial services is the new normal and we are going to see a cashless economy in the near future.