In A Decade of Digital Transformation in 12 Months, 46 C-suite executives spoke with PYMNTS for its Q2 eBook on what the world will look like as recovery rolls on and the next iteration of normal rolls out. In this excerpt, Denelle Dixon, CEO and executive director of Stellar Development Foundation, explores how the pandemic was a catalyst for innovation at the local level, enabled by accessibility to open platforms that connect to the global financial system.
Read the entire eBook here.
One of the key learnings from 2020 is that, however rigid we perceive them to be, national borders do not prevent the spread of pandemics nor stop the flow of commerce. While the world is fragmented by borders, we are all connected by economic demands – and we feel their impact on the way business gets done. The sudden and unexpected nature of the COVID-19 pandemic forced rapid change in consumer financial behavior in every sector. In the developing world, it was a catalyst for innovation at the local level, enabled by accessibility to open platforms that connect to the global financial system.
The last year showed us that the needs at the regional/local level have significant global implications for the financial system. COVID-19 has accelerated digital transformation across industries and around the world. For example, regions like Latin America still have a largely cash-based economy, with 91 percent of transactions in Mexico still being made in cash as recently as 2020.
With the arrival of COVID-19, people were suddenly afraid to use cash, which caused the demand for digital alternatives to skyrocket. In 2020 alone, we saw 13 million Visa cardholders in Latin America make their first-ever online transactions, which likely would not have happened without the influence of a pandemic.
And, although we are hopefully rounding the corner in our fight against the virus, we don’t see digital transformation slowing anytime soon. As needs and preferences changed, local companies stepped in to develop solutions for their own communities, and that’s a good thing. With dramatic increases in unemployment and impact on the working poor (UN.org), global remittances became even more essential during the pandemic – but due to the fear of waiting in lines, going into markets and being in large crowds, logistics were challenging.
As a result, people became more open to using digital tools for payments and cross-border transactions – many developed by locals who leveraged blockchain technology and stablecoins to meet local needs. Using stable digital assets pegged to local currencies, locally developed applications such as Leaf Global, Saldo, ClickPesa, Anclap, Biccos, Perahub and Tempo are meeting the needs of specific regions and making the necessary global connections.
In the last 12 months, more time, money, creativity and talent have been focused on the digital payments space, out of necessity. We look forward to seeing even more local innovators addressing challenges in their own regions, leveraging their lived experience and open technology – like Stellar – to develop their own brilliant and tailored solutions.
At Stellar Development Foundation, we’re enthusiastically supporting local developers and their efforts to solve real-world challenges where the economic effects of the pandemic have been felt most acutely.