COVID has accelerated the adoption of cashless payment, bolstering digitalization in the financial sector. A study by ACI examines the role of the COVID-19 pandemic in bolstering digital financial inclusion within the ASEAN member states. It finds that COVID has significantly propelled the adoption of digital payment within the ASEAN region. Notably, women in ASEAN have experienced a swifter transition towards digital payment during COVID, compared to anywhere else in the world.

COVID has led to declined cash usage and catalyzed the adoption of digital payment, through financial institutions and mobile money. The declined cash usage during the COVID-19 pandemic is due to sanitation concerns and the lockdowns constraining offline activities. This prompted the need for alternative payment methods to sustain economic activity – digital payment.

However, there is a gender disparity in adopting digital payment globally. Worldwide, digital payment channels are generally less accessible to women, compared to men. In the ASEAN region, although digital payment is generally more accessible to women than elsewhere in the world, a gender gap still exists. Compared to males, ASEAN women are more likely to be cash users, rather than digital payment users. The gender gap in digital payment adoption underscores the importance of financial inclusion. Financial inclusion means to ensure that individuals and businesses have access to essential financial products and services. Nowadays, with the growing adoption of digital payment, it is also important to promote digital financial inclusion, meaning using digital means to reach those currently excluded from the digital payment system, offering services tailored to their needs.

Reasons that hinder women from accessing digital payment channels, including financial accounts and mobile money, are various. A significant factor is women’s reliance on their families. Family members already having accounts is the most likely reason for Singaporean women not owning an account. This trend is even more pronounced in other ASEAN countries. Additionally, obstacles such as the distance to financial institutions, the cost of owning an account, lack of required documentation, mistrust in financial institutions, religious considerations, limited funds, and a perceived lack of need for financial services all contribute to these challenges. Notably, among the less economically advanced ASEAN nations, such as Cambodia, Indonesia, Lao PDR, and Myanmar, the primary barriers to financial institution account ownership are insufficient funds and a perceived lack of necessity for such services.

COVID has moderately mitigated the gender divide in adopting digital payment within the ASEAN region. After COVID, Singapore has seen increased financial accounts owned by females. The lack of documentation and the existence of family accounts were less likely the reasons for not having accounts among Singapore women. This indicates that Singaporean women might have become more prepared for account applications and more independent from their families. Similarly, in Malaysia and Thailand, family members already having one becomes a weaker reason for women not having a financial account after COVID.

Digital financial inclusion is of vital importance to both personal and social economic development. It aids the poor in accessing education and healthcare, enhancing their quality of life. It also stimulates entrepreneurship by easing credit constraints and boosts GDP growth. Realizing the benefits, ASEAN policymakers should accelerate actions to improve digital financial inclusion in their payment framework.

By HUANG, Yijia

Researchers: GEORGE, Ammu and XIE, Taojun