COVID-19 Impact on Pharmaceutical Packaging in Chemicals and Materials Industry

COVID-19 Impact on Payment and the Case for Mobile and Digital Wallet in the Information and Communication Technology Industry

  • ICT
  • Sep 28, 2020

COVID-19 Impact on Payment and the Case for Mobile and Digital Wallet in the Information and Communication Technology Industry

The pandemic started with its epicenter in China in 2019 and has been continuously spreading by then to all over the world, so far 216 countries and territories have been affected with COVID-19, the U.S. being on the top with cases reaching to about 2.1 million, followed by Brazil and then by many European countries such as Russia, Spain, Italy and others. The COVID-19 cases reaching to the big named countries with strong dominance in the global market which has adversely affected the economy globally. The spread of corona virus has led to the global recession, many companies are being bound to take stringent actions of laying of their employees, small business are being shut, manufacturing facilities are being put on hold. There has been a disruption in supply chain of many industries due to restriction in logistics and closing of manufacturing facilities. In addition, the slowdown in economy has lowered the spending capability of individuals and people are saving money for emergencies.

As the pandemic hit globally, employees are advised to work from home, and operate remotely as much as possible. Population is becoming more inclined and reliable towards the use of digital platforms and internet services for relevant information and for handling the office work from home through digital platform. This has eventually created a series of opportunity for digital platforms, services and solution providers to increase their customer base with relevant products for making payments. The financial institutions need to capture this opportunity by building the digital solutions integrated on smartphones which are quick and effective to support various businesses, merchant and customers in this slow run of economies globally. With the spread of the virus globally, individuals are avoiding any sort of physical contact to protect themselves, in this case digital payment is aiding them by providing contactless payment solution through digital wallets, mobile apps, or tap to pay cards.

The evolution of payments has accelerated due to the high adoption and penetration of smartphones and growth in digital wallet. Even companies are taking digital transformation for sustaining the development. The companies that would be able to recover from this pandemic crisis would need to be digitally stable, understand the customer needs and would need to respond to the rapidly changing market.

The need of the customers would evolve after the pandemic and they would depend more on digital platform for the need of transactions, loans and other financial services. This shows how the growth of payment market will increase which are supported by digital wallets or smartphones, individuals are preferring e-commerce more than the physical shopping on stores which will change the behavior of shopping experience among the customers, this will help the digital wallets to gain larger share. The government had already been taking various steps to boost the digitalization and payment and the case for mobile & digital wallet market by initiating various rules and regulations. For instance, in 2018, the U.K. government announced the implementation of PSD2 (Revised Payment Services Directive) which made the financial institutions to share the customers banking data to third party on a secured platform.


Payment market is highly affected by the growth in smartphones and digital wallets. Taking the payments to online platform has provided the users with much ease and flexibility to make payments. Smartphones have simply revolutionized the financial services market by bringing in technology such as digital wallets, near-field communication (NFC) payments, quick response (QR) code payments, internet payments, direct carrier billing and mobile banking. With the implementation of online banking into smartphones, financial services have found the need to develop payment and the case for mobile & digital wallet solutions which can be used through smartphones as there is a high usage of smartphones among the people globally. This increasing adoption of smartphones among the people is thus creating huge growth for the global digital payment and the case for mobile & digital wallet market. For instance, in 2019, there were about 2.71 billion smartphone users worldwide and is seen to be reaching at 7.33 billion by 2023.

However, the sales of smartphones dropped drastically with the spread of the novel virus. The sales of Samsung and Huawei have dropped by 17 percent each for the second quarter. Apple also noted a drop of about 8 percent. The slowdown in the sales of smartphones adversely affected the payment and the case for mobile & digital wallet market.

The U.S. had the highest share of payment and the case for mobile & digital wallet market reaching to about 31 percent before the advent of corona virus, China being the second dominating region for the payment and the case for mobile & digital wallet market with market share reaching to about 20 percent and Europe capturing the third position with 14 percent market share. However, China was the epicenter of the virus and the U.S. and Europe are the worst affected regions of the virus. This has highly reduced the economic growth and consumer spending. This has slowed down the growth for the payment and the case for mobile & digital wallet market.  

However, the demand of payment and the case for mobile & digital wallet will increase in the coming months as individuals and companies are becoming more reliable on digital platforms and internet services for their requirements. The financial services are already taking a digital transformation by bringing the payment methods and transactions to a digital platform such as introducing digital wallets on smartphones. Blockchain technology has even led to more development of online transactions by providing a secure pathway. In addition, the pandemic has changed the lifestyle of individuals and the companies and users now depend more on digital platforms. For instance, customers are 30.60 percent more likely to make online purchase in 2020 as compared to that of 2019. This changed behavior of consumers towards e-commerce makes the users more inclined towards smartphones and digital wallets for making instant contactless payment.

The supply chain of payment and the case for mobile & digital wallet market based on online platform has been disturbed due to the refunds and cashback offered in the e-commerce market. The online purchase is around 3 times more likely to be returned by the consumer as compared to the physical purchase. About, 23 percent of the U.S. purchase has shifted to online retail, with increasing business, the rate of return, refund and charge backs will increase, moreover due to disruption in logistics, there must be several other issues of delay. The payment and the case for mobile & digital wallet service provider may also get into disputes in these transactions. The customers are likely to involve the refund from the bank directly which can impact the payment solution provider. 

The company such as Alipay has taken a strategic decision of enabling embedded payments in third-party applications through mini-programs. The new step will allow the users to make contactless payments in various industry verticals such as logistics, food delivery and medical care. The post COVID-19 initiative taken by the company will increase the growth of the payment and the case for mobile & digital wallet market globally.


The pandemic made it important for the payment and the case for mobile & digital wallet market to upgrade their solution and services in accordance with the changing needs and provide it on digital platform. The digital payment and financial service providers are collaborating with banks, financial institutes and government bodies to provide better service and cater a larger market in this pandemic. The payment and the case for mobile & digital wallet providers are supporting the decisions taken by government by launching new solutions in accordance with the needs. COVID-19 has made the employees to operate from home and take their workloads in their home driving the concentration of work and operations more towards digital solutions. The companies having their core strength in digital expertise would be able to fight this unfortunate situation more efficiently due undisturbed work flow, but surely, there will be some instability in the payment and the case for mobile & digital wallet market as most of the industries are dependent on each other for resources, applications or various other resources. It would be difficult for the companies to sustain themselves in this situation, although mobile phones enabled with digital wallets would play a major role in supporting various businesses, merchants and customers through its contactless and effortless transactions around the globe.