Fintech – The coronavirus pandemic continues to turn the world and our lives upside down, with the outbreak forcing governments to put into place measures that reduce the risk of contamination, and focus on pre-emptive processes. The strain on the economy is palpable, and is an impending catastrophe that could exceed the crash of 2008, and the Great Depression a century ago, if left unchecked. Besides asking people to practice social distancing and enforcing lockdowns to avoid the spread of the contagion, governments have another source of contamination they need to worry about: banknotes. The latest Fintech innovations can help mitigate the risk of transmission of the virus, by reducing the need to use physical money.
Viruses and pathogens are known to live on surfaces for up to 48 hours. Some researchers are speculating that the Covid-19 virus could survive even longer on certain materials. Paper money, reportedly, can host live viruses for 17 days. Polymer notes are believed to be thrice as clean, yet they too can carry certain pathogen from anywhere between six hours to a day. The only way to minimize infection is for the authorities to promote contactless cash transactions. Even then, there is the danger of microbes being transferred by cards at ATMs and checkout registers, in supermarkets and stores.
A solution whose time has come
While we have seen a growing shift to cashless transactions in recent years, the current situation demands that we should renew efforts to totally digitalize payment systems, while ensuring that are accessible to everyone, to help protect us from the current pandemic. As we begin to accept the major changes this disruption has already caused in our lives, as the ‘new normal’, Fintech companies around the world are working with governments and banks to make the switch to a seamless cashless culture possible. The main thrust is on ensuring that the elderly, those underserved by traditional banking, and the most vulnerable segments of our society are not left behind.
There are many benefits to a cashless society. For one, it can provide the opportunity for governments to set out more easily enforceable fiscal guidelines, to help strengthen the economy and make it more transparent. During a recession people tend to hoard cash, forcing governments to lower interest rates in a bid to stimulate the economy. Going cashless would mean that people would not be able to take money out of the financial system, taking considerable stress off central banks and the lending mechanism. A cashless society would also make it harder to evade taxes, conceal earnings or illegal transactions. Cash payments can be anonymous, which creates avenues for white collar crime, including fraud, counterfeiting, bribery, corruption, and even terror funding. Fintech models can offer fraud-preventing technology and encryption, biometrics and Blockchain technology, to make payments and transactions safer than ever.
So what’s the downside?
Of course, one can point out a few problems that could arise from a totally cashless society as well. Innovation brings with it a degree of risk and concerns over privacy. How do we know that the payment gateway we decide to use will protect our data? Technology cannot be totally glitch-free and data breaches can occur – especially with hacking being a perennial menace. Using online payment portals also increases the risk of cyber-crimes such as identity theft, and fake transactions. For conspiracy theorists there is Big Brother’s surveillance tactics where your every move, financial or otherwise, could be tracked by the state.
While these concerns are all possible to address, the Covid-19 crisis is highlighting another very important limitation widespread deployment of cashless Fintech innovations currently face. While the more affluent sections of society are already able to access the latest technology and digital tools, sections of society that are economically vulnerable could find themselves even more marginalized. The need for Fintech solutions, which every consumer, from the daily wage or migrant worker to small business owner can access, is a bottleneck that remains to be addressed.
An inclusive and empowering solution
While Europe, North America, Japan, and most other developed economies, are going increasingly cashless already, emerging economies like India, Brazil and several African countries – including Nigeria, Kenya and South Africa – have been leading a quiet digital payment revolution of their own. India has been ahead of the curve since demonetization was imposed in November 2016. Digital India has been the government’s flagship vision of transforming the country into a digital society and economy. Several South American nations have made substaintial strides in recent years as well. Fintech innovators in Africa have also been earning themselves a name, as enablers of accessible grassroots money transfers mechanisms, in largely informal economies, and in the context of the largest concentration of humans underserved by traditional banking.
Looking beyond this current health crisis, the evidence for cashless mechanisms enabling a fairer and more financially inclusive model of the economy, is mounting. The advantages extend to small and medium enterprises as well, including reduced operating costs and enhanced efficiencies. However, the execution of such a transformation will need the insightful and proactive joint efforts of governments and Fintech innovators. As mammoth as the task may appear on the surface, the widespread financial inclusion and small scale entrepreneurship it will empower, make a more than compelling case for taking on the challenge.
Read Also – Fintech – The Global Pandemic Has Created New Opportunities – Mahmood Ahmadu
About Innovate 1 Pay
Nigerian Fintech company and payment services provider Innovate 1 Pay was established in 2012. It provides online payment solutions for retail and wholesale mobile remittances, mobile money and currency card payments. The largest domestic service provider of this nature in its home country, the company has since spread its operations to 24 different nations and trades in over 60. The company’s online wallet accepts Visa, MasterCard, Internet Banking, debit and credit cards, as well as offering customers the ability to store money in an online wallet, for easy and secure payments. The Innovate 1 Pay payment gateway is a comprehensive one-stop solution, enabling quick foreign currency transfers and offering touch points integrated with several banks, payment processors, mobile money operators and more.
About Mr Mahmood Ahmadu, Chairman of Online Integrated Solutions
As the Chairman of Innovate 1 Pay and Online Integrated Solutions, Mr Mahmood Ahmadu’s entrepreneurial vision has empowered financial inclusion across Africa. Under his stewardship Online Integrated Solutions has emerged as a ‘one-stop-shop’ for Caribbean and African businesses, and a point of contact between these regions and global markets, particularly the Middle East and Far East Asia. With an MBA from Nassarawa University in Nigeria, Mr Ahmadu invested in his first successful company in the early 80’s, emerging as a bright star among earlier pioneers of trading in GSM, in northern Nigeria. He launched Innovate 1 pay in 2012, as a pioneering African Fintech company, with a vision to pursue holistic global integration of underserved markets. Mr Ahmadu is a strong believer is giving people and businesses the tools to empower themselves and leverage their talents, to becoming competitive innovators at a global scale.
Source – http://uaebusiness.com/
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