Mastercard survey shows caution with personal finances, progressive abandonment of cash in Jamaica
Asurvey conducted by Mastercard and Americas Market Intelligence (AMI) in 13 countries across the Latin America and the Caribbean (LAC) region, including Jamaica, shows how consumer habits have changed, how the demand for financial services has increased, and how companies will have to adapt to the novel digital ecosystem generated by the novel coronavirus pandemic.
The results of the survey were presented recently during the 9th Edition of the 2020 Mastercard LAC Innovation Forum, an annual Mastercard event that brings together leaders and experts from the technology and payment industries to share their views in the POST-COVID-19 era.
The survey shows how the pandemic and the social distancing have galvanised digital and financial inclusion in Latin America and the Caribbean and, from one moment to the next, made this inclusion a priority. The data reveal that over 40 million people in the region have banked in recent months and, by the end of the year, AMI predicts that 50 million users will have made online purchases for the first time.
COVID-19 forced Latin Americans and Caribbean from Jamaica, Argentina, Brazil, Chile, Costa Rica, Colombia, the Dominican Republic, Ecuador, Guatemala, Mexico, Panama, Peru, and Puerto Rico to reconsider their relationship with banks and technology.
Forty-six per cent of those surveyed have thought about saving money, and another 46 per cent already pay bills online, so the seeds for a long-term savings mindset have already been sown.
THE RISE OF E-COMMERCE IN THE MIDST OF THE PANDEMIC IN JAMAICA
The survey report shows that, over the past months, once cash was seen as something “dirty” and dangerous in terms of contagion, e-commerce has become the only way to buy and online banks have offered the simplest way to handle money. The survey also found that confinement nearly doubled the increase rate of e-commerce during this time: from a PRE-COVID-19 penetration of 45 per cent to its current 83 per cent.
As the consumer data shows, electronic business transactions (e-commerce) have been a recurrent means of acquiring physical goods during the COVID-19 pandemic in the island:
Up to 26 per cent of those surveyed in Jamaica stated that they are shopping online more often, while 18 per cent of Jamaicans also said they are ordering their groceries online more often, with 10 per cent of them made online purchases for the first time.
Consumers also showed a strong desire to cut expenses, avoid accruing debt, manage their finances conservatively and acquire a long-term financial outlook.
For 51 per cent of those surveyed in Jamaica, the main focus will be on saving money.
The pandemic has 57 per cent of the survey’s participants in the country thinking more about their future plans than they did before it started.
Savings and finances are more meaningful now than they were before the pandemic, as confirmed by for 23 per cent of consumers.
DECREASE IN CASH PAYMENT IN JAMAICA
“During these adverse times, safety and exposure reduction have become an essential value to assure to all our cardholders. Nowadays, the shift to contactless transactions and digital payments has leveraged consumers in a notorious way to a cashless normal”, said Dalton Fowles, country manager for Mastercard in Jamaica and Trinidad and Tobago.
Jamaica saw a considerable reduction in cash due to the increase in e-commerce activity, the use of alternate forms of payment such as credit or debit cards and contactless payments, and social distancing. The study reveals that:
— Currently, 42 per cent of the people in Jamaica use credit or debit cards for their purchases in stores as the favourite method of payment.
— 18 per cent of the islanders said they are using cash a lot less since the beginning of the pandemic.
The most used payment methods used nowadays by Jamaicans are:
— 37 per cent debit cards, — 18 per cent credit cards, — 11 per cent bank transfer, — 15 per cent digital
platforms and
— 16 per cent cash.