COVID-19 spurs growth in digital money transfers

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COVID-19 forced many people to make major adjustments to the way they live, work, and communicate. This inevitably has also affected the way people pay – not only for goods and services but also how they send money to friends and family – according to specialised payments platform Paysafe’s ‘Lost in Transaction’ research.

Almost a third (30 per cent) of consumers globally said they had given money to friends or family once or twice during the first month of lockdown. A further 20 per cent of consumers made more than two transfers in the month, with 1 per cent doing so at least 11 times. However, they were not using physical means as much to do so, as 43 per cent of consumers reduced their handling of cash due to health concerns.

As a result, digital wallets such as Skrill are becoming the channel of choice for consumers who need to financially support others. With the need for international remittances likely increasing due to global restrictions on movement, 32 per cent of those surveyed stated that they’ve turned to digital wallets as the quickest, most effective and convenient way to transfer money overseas since lockdown began. Only 15 per cent of consumers said they would use some form of physical payment method to send money overseas during the pandemic.

Paysafe’s research demonstrated further ways in which COVID-19 has stimulated a digital shift in the way consumers shop and pay, with 48 per cent of people saying that they will be reducing their cash usage in the future. Additionally, 38 per cent of consumers say they will be shopping online more – even when lockdowns have been fully lifted.

Lorenzo Pellegrino, CEO of Skrill, NETELLER and Income Access at Paysafe, comments: “COVID-19 continues to be a catalyst for change across the whole payments industry. Consumers seem to be switching to digital offerings, signalling a definite shift in consumer preference for truly frictionless payment methods. Even as cash-based money transfer options reopen, preferences towards digital options, induced by the pandemic, are unlikely to subside.”

He continued: “A digital remittances solution such as Skrill Money Transfer is far more cost-effective than a traditional bank transfer and has become an essential resource for people across the globe during the COVID-19 crisis. As consumer confidence and awareness of the benefits of digital international remittances continues to grow this may well represent a permanent evolution for the remittances industry.”

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