Social distancing, the buzzword today has had a long journey as a policy suggestion under the request of George W. Bush since 2005 against bioterrorism or a potential pandemic originating from animals and birds. The term used however is Non-Pharmaceutical Intervention or NPIs and the two most commonly used community NPIs include physical distancing and temporary closure of locations where people gather to “flatten de curve” and stem the spread of the virus.

With nearly the entire population across different parts of the world staying home and may continue to follow some level of physical distancing in the foreseeable future, this may be the appropriate moment for regulators to provide an impetus to Fintech segments for, RFID, NFC, Peer 2 Peer transfers or any mobile banking application that can be contactless. Visiting restaurants, stores, or getting into a regular taxi means using cash or a bank card if you are not already a digital payer, and that may have some unknown unpredictable risks of virus contagion.

If there is one intelligence the human race has harnessed and practiced since time immemorial, it is to prevent contracting contagious diseases through physical distancing from family & friends. Scientific studies have increasingly helped the experts project and analyze the likely impact and traditional wisdom has always been used to decide the “intensity of distancing” the people follow to avoid the spreading of viruses.

The United States Center for Disease Control & Prevention recommends buying groceries and medicine, visiting the doctor, and completing banking activities all online and limit in-person contact as much as possible, including a 6 feet distance from the others if you must go in person.

If you have stepped out during this period and used a pin-pad to make payments with your card I am sure you would have disinfected your hands after the activity. Your fear would be genuine and it would not vanish for a while, which goes beyond the social distancing & shut-down timelines announced by your governments. ATMs are the most convenient places for cash withdrawal but not without risks as we understand. The concern has been noted by the banks in some countries and maintenance workers are planning to disinfect the keypad & screen on the ATMs, but given the scale, it would not be a sustainable solution due to cost and risks. And in your day-to-day living considering today’s lifestyle a 9 feet radius crinoline definitely won’t help keep distance with people & things alike. We need a different interaction tool & experience.

The growing influence of technology in our daily lives has made staying home during this period relatively convenient. I am sure you would give credit to mobile telephony, online banking, and on-demand services as you can pretty much stay home and order food, make payments, subscribe to services. A blog in Euromonitor had predicted 50% online penetration by 2030 and we have already achieved 59% by 2020. With the rapid pace of growth of technology inclusion, the 41% may catch up much sooner than we think.

Small businesses that operate with cash, card, and merchandise are equally at risk of contagion dealing with the people and goods traffic. Would there be any part of their business they are willing to convert to electronic or mobile commerce? Would they opt to reduce physical interaction with people & things? Businesses will evolve now or sooner and will choose a path that has the least impact on personal health.  One of these changes will be the increased use of mobile payment acceptance, instead of cash-based, PIN-based, or any touch-based technology among other things that can avoid close physical contact.

Mobile phone penetration stands at 90% in developing and 91% in developed markets while the smartphone is at 82% and 80% respectively. The gap of Smartphone penetration difference between countries has closed over the last few years to around 10% or less. Mobile-based Peer to Peer payments offering has already swept across several nations. And there are countries where governments have their eyes shut towards demonetization and mobile payments. Well, lawmakers need to move the cheese now. The limiting factors such as the political will and acceptance of the cost-benefit have to be resolved.

Poor digital inclusion is a consequence of insufficient telecom infrastructure in a number of countries and cash continues to be the main method of payment. Telcos & MNVOs must be forced to offer connectivity to rural and poor nationwide. While a number of tech start-ups have created disruptive innovations to address these gaps, many of them don’t receive sufficient investments given their short-term utility perception, because of political schpeels of a connected country in the near future.

Governments should facilitate, enable, regulate to promote and help increase the adoption rate through Fintechs. They must take steps favoring innovation, invest in and allow more disruptive technologies and launch independent solutions to counter the oligopolistic nature of banking industry in some countries. Banking regulators should make open API-banking as an important agenda. Use of distributed ledgers such as blockchain, AI & ML and digital footprint analytics should be promoted.

There are thousands of fintech start-ups out there, some of them well funded and others looking for investments, that will have to rework on their market strategies & budgets to emphasize the digital usage especially during these times. The companies could achieve reasonable market share through communicating the benefits of going digital. A cross-segment friendly UI & UX and a well thought through implementation should help achieve a decent market share.

Covid-19 could be a turning point for Fintechs and this goes beyond the payments industry. The virus will leave behind lasting changes to the work culture and lifestyle, and we might as well begin to become serious technology users to bring that convenience to us sooner. The next payment you need to make, insist on peer to peer, NFC, Bank transfer or contact less methods; avoid cash and use pin-pads as much as you can.

Wishing everyone safe health.