Digital Payments and the COVID-19 Shock: The Role of Preexisting Conditions in Banking, Infrastructure, Human Capabilities, and Digital Regulation

Robert J. Cull, Vivien Foster, Dean Jolliffe, Daniel Lederman, Davide Salvatore Mare and Malarvizhi Veerappan

No 10603, Policy Research Working Paper Series from The World Bank

Abstract: Treating data collected pre- and post-COVID-19 as a quasi-experiment, this paper examines the importance of presumed enablers and safeguards in driving the observed expansion of digital payments and digital financial inclusion. The analysis interacts drivers of digital payment usage with a country-specific proxy of the severity of the COVID-19 shock, leveraging variation in both the drivers and the quasi-treatment (the COVID-19 shock) to identify the parameters. Although regulation of banks and digital economic activity were correlated with digital payments before and during the pandemic, the capabilities of users and connectivity (to electricity, the internet, and mobile telephony) were responsible for increased use of digital financial services in response to the shock. An interpretation is that governments and the private sector were able to overcome underdeveloped banking systems and weak regulation of the digital economy, but only where there was adequate digital infrastructure, connectivity, and a high share of the population that understood and could make use of digital payments.

Date: 2023-11-13
New Economics Papers: this item is included in nep-fdg, nep-fle and nep-pay
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://documents.worldbank.org/curated/en/09945431 ... e82051f6aa962419.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:10603

Access Statistics for this paper

More papers in Policy Research Working Paper Series from The World Bank 1818 H Street, N.W., Washington, DC 20433. Contact information at EDIRC.
Bibliographic data for series maintained by Roula I. Yazigi ().