Digital payments are at the heart of disruption across industries

Digital payments are now the primary driver of most of the organisations businesses

Nandan Mer, OpinionIndustry Expert
Nandan Mer is the Group CEO of Network International. He also serves as Chairman/Director of Network International subsidiary companies for the Middle East and Africa. Nandan holds a strong background in payments, consumer finance and corporate banking with a deep understanding of the Middle East and Africa as well as experience in India, Czech Republic, Israel, Russia and UK markets. His more than 30-year track record of successfully building and growing businesses to profitable scale and dominant market share spans several markets globally, at leading financial institutions including American Express, Citigroup, United Bank for Africa (UBA) and most recently at Mastercard.

September 9, 2021

Every business can agree that, despite the challenging circumstances, COVID-19 also brought with it an overwhelming real-time use case for digital services.

Despite many of these solutions being around for several years, entire industries across every geography were caught digitally unprepared when the virus arrived, putting them in an urgent predicament as the crisis unfolded. How do you continue to efficiently transact with customers when they can't reach you in person and you're not set up to accept payments online?

Digital payments are now the primary driver of most of the organisations businesses.

According to a global report tracking real-time payments volumes, growth and dynamics across 48 markets, more than 70.3 billion real-time payments transactions were processed globally in 2020 – a jump of 41 percent compared to the previous year.

While the impact is most visible in the retail and small business sector, other historically less virtual sectors are also primed for disruption by digital payments.

Digital = Inclusive + Efficient

Sectors like healthcare, education and government, in particular, need to rewrite their customer journey by positioning digital payments at the heart of their business model, customer-centricity and resilience.

Done right, a transformation that puts payments at the centre of process and service can break inbuilt industry inertia – and, consequently, improve profitability.

In the healthcare sector, for instance, going digital is more than just ditching the waiting room for a tele-health consultation. Anyone who has had to visit a hospital or clinic will likely tell you they spend more time with cumbersome paperwork around payments than they do in the doctor's office.

With digital payments, an entire ecosystem of healthcare providers, laboratory services, pharmacies and medical insurance companies have an opportunity to greatly relieve patients and their families of the hassle and time spent at billing counters, chasing claims and repeating information.

And, with growing internet and mobile adoption, far more patients can gain access to telemedicine consultations and pay seamlessly using digital methods, making healthcare more inclusive.

Meanwhile, COVID-19 has also expedited the long overdue digital transformation of the education sector. In what became the biggest online learning experiment in the world, educational institutions were also compelled to recognize the need for more efficient payment collection.

While teaching had no choice but to shift to remote technology in the classroom, administrative and payments processes have remained laggard.

But digital processes can allow for easier accounting and reduce the burden of chasing outstanding fees, offering reduced risk. More importantly, it offers convenience all around, for students, parents and administrators. Payment data can also be further utilised to better understand consumer behaviour to offer payment plans or financial assistance in partnership with financial institutions.

Public Sector: UAE’s shining example

In the public sector, the effort of unifying government services with digital payments and data has become critical in today’s world. Governments worldwide need to keep digital adoption moving forward and build on the momentum and lessons learned from 2020.

A major UN report released in 2019 called on governments across the world to embrace digitization to support sustainable development. . This call has been further amplified during the pandemic, which saw e-government play a vital role in promoting health and safety and in keeping economies and societies resilient. The report said digital government transformation must aim to promote digital inclusion, and accepting electronic payments can save residents time and resources through effective and efficient public services provision.

Many nations can benefit from taking a leaf out of the UAE's book. Long before the pandemic, the Gulf state has been a remarkable example of how nations can achieve a high level of satisfaction among local residents by achieving transition to digital for a majority of services from parking to utility payments, and of late, booking PCR tests and getting vaccinated.

The UAE already provides nearly 3,730 federal and local online services through its official portal and continues to build more. According to a report issued by the United Nations Economic and Social Commission for Western Asia , in 2019 the UAE was ranked first in the Arab region in the Government Electronic and Mobile Services (GEMS) Maturity Index, a global indicator measuring progress at the national level in achieving transition to digital services. Next door, Saudi Arabia’s Vision 2030 strategy has set out a goal of 70 percent cashless transactions by 2030, illustrating the drive to put payments digitization on top of the agenda.

Permanent Change

Going forward, it is all but certain that digital payments will continue to outpace cash. According to a 2021 analysis by PwC, global cashless payment volumes are set to double from 2020 to 2025 to almost 1.9 trillion transactions, and to almost triple by 2030, due to the changes brought by the pandemic.

However long the ongoing pandemic lasts, for several industries a permanent shift to digital payments may well be one of the more lasting effects.

Any opinions expressed in this article are the author’s own

Disclaimer: This article is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Read our full disclaimer policy here.