Mastercard says shift to cashless spending is here to stay

SectorFinancial Services

Mastercard estimates that the 20 to 30 percent increase in e-commerce spending due to COVID-19 will be a permanent feature in the share of overall retail spending.Mastercard Institute’s Economy 2021 Report analyses the economic impact of COVID-19 including permanent changes in digital consumer spending habits, growth of online banking, fintech disruption and opportunities to boost financial inclusion.In terms of the e-commerce spending surge, the Institute estimates a permanent stickiness factor of 20-30 percent in overall retail spending, a key consideration as businesses contemplate scaling up their digital transformation efforts.This shift was also highlighted in a recent Mastercard e-commerce study, which revealed that 73 percent of consumers in the UAE, as well as in the wider MEA region, were shopping more online than they did before the pandemic.“The continuing trend away from cash is expected to be more persistent in economies such as the UAE, which already has a resilient e-commerce infrastructure and a young, digitally savvy population.”The report also notes that continued digitalization in MEA is key to advancing financial inclusion.The report said that while the fact that the young and fast-growing populations across MEA is a key leverage for e-commerce growth, it notes that youth unemployment poses more...