COVID-19 and the role of mobile money

  • By Vince Kadar
  • Monday, April 06, 2020

Efforts to contain COVID-19 rely as much on tech innovations as on governmental edicts. Just look at the cloud-enabled tools that make it possible for millions to work while obeying orders to self-isolate, or high-tech manufacturing centres that are rapidly scaling production of mandated protective gear. When technology works to enable government policy, or when policy is rewritten to clear the way for helpful technology, amazing results are possible. 

That’s  exactly what I see happening in parts of the developing world as this pandemic unfolds. Mobile money providers and financial regulators are partnering to protect vulnerable communities from this latest health threat, ultimately helping individuals and businesses develop the financial resilience they need to weather this period of uncertainty and those that may come in the future.

Mobile money as a tool for public health in the developing world 

This story takes place in two acts. In Act I, those with means flood local banks, panicked by news of the virus’s spread. They withdraw as much cash as possible and hoard it as insulation against an uncertain future. This leaves developing economies hamstrung; with so little currency left in circulation, everyday business grinds to a halt. The poorest citizens, particularly those who remain unbanked and dependent on the informal economy, now face two formidable threats: a deadly virus and a “cash drought,” both of which could topple fragile family systems and leave lives in ruin. 

Act II begins when regulators and mobile money providers partner to fight these threats. Each brings a unique advantage to the table: regulators have power, while mobile money operators have the trust of end users. Working together, this one-two punch can help slow the spread of a pandemic and cultivate financial resilience, particularly among the most vulnerable. 

In Tanzania, for example, the Central Bank moved fast to put policies in place that encouraged people to digitize all that hoarded cash. This approach aimed to both strengthen local economies and protect public health by enabling contactless digital transactions. Meanwhile, in Malaysia, regulators and mobile money operators are working together to rapidly migrate tens of thousands of people from traditional “branch” banking to digital banking in order to streamline international remittance payments. To get this done, Malaysian policymakers and mobile money providers need to modernize the on-boarding process by revising traditional Know-Your-Customer (KYC) requirements and procedures. This modernization effort could give huge numbers of unbanked and underbanked people access to a vital financial lifeline in times like these. 

How Telepin can help

At Telepin, we’re working with many of these mobile money innovators and their regulatory partners to make these changes happen. 

It comes down to the flexibility that’s built into our mobile money platform. It takes only hours for our engineers to reconfigure and re-dimension our customers’ backend technology, which gives those customers the means to respond quickly and effectively to a global situation that’s evolving at hyper speed. Since this pandemic began, for example, our customers have relied on us to adjust account limits, lower or eliminate access fees, improve traceability, increase transactions per second and much more in very short order. 

We may not know how long this health threat will last, but we do know one thing: the agility of our mobile money platform is limitless, and we’re here to make that agility work for you and the people who rely on you now more than ever.