The Mastercard Economics Institute has released ‘Economy 2021,’ a global outlook report providing detailed analysis of the economic impact of COVID-19.
It also provided analyses to permanent changes in digital consumer spending habits, growth of online banking, fintech disruption and opportunities to boost financial inclusion.
Among the key trends analysed, in the report, is the sharp shift to digital platform use, driven by changed consumer behaviour, mobility restrictions and the necessity to generate business revenues beyond brick-and-mortar locations.
In a statement on Wednesday, Mastercard said the report was to help governments and businesses find a path forward following a gruelling and transformative 2020.
The report estimated that a permanent stickiness factor of 20-30 per cent in overall retail spending was a key consideration as businesses contemplate scaling up their digital transformation efforts.
According to the report, In 2021, e-commerce is expected to contribute to the continued growth of digital demand, as continued digitisation in the Middle East and Africa remains key to advancing financial inclusion.
“Fintech disruption in online banking is set to be a key driver for this, especially in East African economies. Brick-and-mortar business creation is expected to decline further in 2021 in favour of online business creation and the adoption of initiatives that connect a merchant’s sales data with access to capital,” it noted.
However, the report noted that the link between high unemployment, high youth unemployment and social unrest was likely to remain an issue in 2021.
“This growth of the digital economy represents a ‘coming of age’ for e-commerce, a turning point in bridging the digital divide. We are heading for a multi-speed global recovery that favours low-touch over high-touch,” Mastercard’s Chief Economist for Asia and MEA, David Mann, said.
He added, “Small businesses and micro merchants are especially crucial to the region’s economies and by enabling them to accept digital payments, we can connect more people and communities to financial freedom and eventual prosperity.”
Alongside e-commerce, the report anticipated automation around the Fourth Industrial Revolution, contactless interaction, local delivery services and ‘tele-everything’ to be other long-lasting trends.
