A post-pandemic consumer study conducted by Mastercard in Jamaica shows caution with personal finances and the progressive abandonment of cashNovember 19, 2020 | By byancafreitas
- The results were presented during the 2020 Mastercard LAC Innovation Forum (November 18th – 19th), an annual Mastercard event that brings together regional leaders and, in this edition, will present “new normal” news and opportunities for the payment ecosystem.
- The report highlights the changes that COVID-19 has imposed on consumers, banks and fintechs, which in the Caribbean and Latin American sector, saw mass consumer migration to digital financial channels, a surge in e-commerce and a reduction in cash transactions.
A survey conducted by Mastercard and Americas Market Intelligence (AMI) in thirteen 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 pandemic.
The results of the survey were presented during the 9th Edition of the 2020 Mastercard LAC Innovation Forum (November 18th – 19th), an annual Mastercard event that brings together leaders and experts from the technology and payment industries to share their views and, in the upcoming edition, to focus on how to lay the groundwork for a successful path toward the future in the post-COVID-19 era.
The survey shows how the pandemic and the social distancing have galvanized digital and financial inclusion in Latin America and the Caribbean and, from one moment to the next, made this inclusion a priority. The data reveals 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 Caribbeans 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. 46% of those surveyed have thought about saving money, and another 46% 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% to its current 83%.
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% of those surveyed in Jamaica stated that they are shopping online more often.
- 18% of Jamaicans also said they are ordering their groceries online more often.
- 10% 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% of those surveyed in Jamaica, the main focus will be on saving money.
- The pandemic has 57% 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% of consumers.
Decrease in Cash Payment in Jamaica
“We are living in a time when safety, security and minimising our exposure to criminal and health risks are of utmost importance to cardholders everywhere. Through our innovative offerings, we have seen a shift to contactless transactions and digital payments, and this new mode of conducting business has paved the way for a new cashless normal”, said Dalton Fowles, Country Manager for Mastercard in Jamaica and Trinidad & Tobago.
Furthermore, 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% of the people in Jamaica use Credit or Debit cards for their purchases in stores as the favourite method of payment.
- 18% 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% debit cards, 18% credit cards, 11% bank transfer, 15% digital platforms and 16% cash.
Undoubtedly, the new spending habits in the region (Caribbean and Latam) have contributed to the rise of contactless technology. Consumers revealed their concerns about understanding the benefits of tech, adapting to it, and having to rely on it as follows:
- Some 40% of consumers own a contactless debit card.
- About 29% of them own a contactless credit card.
- Around 12% reported applying for a contactless card for the first time.
About Mastercard (NYSE: MA)
Mastercard (NYSE: MA), is a global technology company in the payments industry. Our mission is to connect and power an inclusive, digital economy that benefits everyone, everywhere by making transactions safe, simple, smart and accessible. Using secure data and networks, partnerships and passion, our innovations and solutions help individuals, financial institutions, governments and businesses realize their greatest potential. Our decency quotient, or DQ, drives our culture and everything we do inside and outside of our company. With connections across more than 210 countries and territories, we are building a sustainable world that unlocks priceless possibilities for all.
About Americas Market Intelligence (AMI)
Americas Market Intelligence (AMI) is the leading market-intelligence and strategy consulting firm for Latin America, providing powerful research data for companies to succeed in a wide range of verticals in the region.