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FinTech and the COVID-19 Pandemic: Evidence from Electronic Payment Systems

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  • Tut, Daniel

Abstract

This paper investigates the effects of the Covid-19 pandemic on financial institutions and consumers’ adoption of FinTech in payments. We find that the pandemic: [1] Initially had a negative impact on the adoption of FinTech, but favorable short-term regulatory changes have reversed some of the negative effects [2] The use of all electronic payment cards has significantly declined during the pandemic except for charge cards. We find an increase in the use of charge cards as consumers shift towards cheaper forms of payment [3] The pandemic has magnified interbank contagion and liquidity risks and has reduced both domestic and international electronic fund transfers via RTGS. The pandemic has also resulted in a deterioration in the quality of commercial banks’ assets and balance sheets [4] Remittance inflows via FinTech platforms have significantly declined reflecting contractions in global economic activities.

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  • Tut, Daniel, 2020. "FinTech and the COVID-19 Pandemic: Evidence from Electronic Payment Systems," MPRA Paper 102401, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:102401
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    Cited by:

    1. Barbara Będowska-Sójka & Agata Kliber & Laivi Laidroo, 2023. "Has the pandemic changed the relationships between fintechs and banks?," Operations Research and Decisions, Wroclaw University of Science and Technology, Faculty of Management, vol. 33(4), pages 15-33.
    2. Berger, Allen N. & Demirgüç-Kunt, Asli, 2021. "Banking research in the time of COVID-19," Journal of Financial Stability, Elsevier, vol. 57(C).
    3. Sugandi, Eric Alexander, 2021. "The COVID-19 Pandemic and Indonesia’s Fintech Markets," ADBI Working Papers 1281, Asian Development Bank Institute.
    4. Christian Herdinata & Fransisca D. Pranatasari, 2022. "Impact of COVID-19 on Organizational Support in Financial Technology," Economies, MDPI, vol. 10(8), pages 1-14, July.
    5. Khayaladdin R. Taghiyev & Tamerlan H. Rustamov & Murad Taghiyev, 2022. "Assessing the Impact of COVID-19 on Digital Payments in Azerbaijan," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 25(83), pages 88-97, June.
    6. Karim, Sitara & Naz, Farah & Naeem, Muhammad Abubakr & Vigne, Samuel A., 2022. "Is FinTech providing effective solutions to Small and Medium Enterprises (SMEs) in ASEAN countries?," Economic Analysis and Policy, Elsevier, vol. 75(C), pages 335-344.
    7. Olesya P. Kazachenok & Galina V. Stankevich & Natalia N. Chubaeva & Yuliya G. Tyurina, 2023. "Economic and legal approaches to the humanization of FinTech in the economy of artificial intelligence through the integration of blockchain into ESG Finance," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-9, December.
    8. Bȩdowska-Sójka, Barbara & Kliber, Agata, 2022. "Impact of COVID-19 on sovereign risk: Latin America versus Asia," Finance Research Letters, Elsevier, vol. 47(PA).
    9. Lei Zhang & Yang Chen & Oleksii Lyulyov & Tetyana Pimonenko, 2022. "Forecasting the Effect of Migrants’ Remittances on Household Expenditure: COVID-19 Impact," Sustainability, MDPI, vol. 14(7), pages 1-16, April.
    10. Claude Bernard Lontchi & Baochen Yang & Kabir Musa Shuaib, 2023. "Effect of Financial Technology on SMEs Performance in Cameroon amid COVID-19 Recovery: The Mediating Effect of Financial Literacy," Sustainability, MDPI, vol. 15(3), pages 1-15, January.
    11. Batiz-Lazo, Bernardo & González-Correa, Ignacio, 2021. "Start-ups, Gender Disparities, and the Fintech Revolution in Latin America," MPRA Paper 109373, University Library of Munich, Germany.

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    More about this item

    Keywords

    Covid-19; Coronavirus; Fintech; Mobile Payment; Central Banks; Financial Intermediaries; Financial Technologies; Banks; Interbank transfers; Diaspora Remittances; Settlement and Liquidity risks; clearing houses; financial stability; Pandemic; M-PESA; Digital Banking.;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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