Impact of COVID-19 on recent trends in digital payments – a case study on China

Abstract

One of the global megatrends is the expansion of digital financial solutions, and seemingly this expansion will continue as there is still room for adopting technology-driven solutions in finance. Regarding global data, the majority of people already have access to financial services: nearly 69 percent of responding adults confirmed that they have accounts at financial institutions. With the far-reaching development of technology, digital payments came into the public as one of the digital financial solutions. In particular, this development sped up during the COVID-19 epidemic, during which people were using remote services in order to keep their physical distance and avoid contamination. Though legal and cybersecurity concerns emerge, the physical infrastructure is developed enough to provide accessible financial services for many more people than today. Countries in various regions adopt modern financial solutions differently, but digital financial solutions are inevitable. In this research paper, the impact of the COVID-19 epidemic on the recent trends of digital payment is examined and presented. The paper aims to detect how new payment solutions change the landscape. The methodology of this study is a case study and data analysis. The successful example of China as a digital payment adopting country is analysed as a case study since the country experienced a large expansion in digital finance. Digital financial solutions and digital payment data are collected from the World Bank. The paper contributes to the literature on digital financial development in China during and after COVID-19.