With Covid- 19 pandemic sweeping across the world, the mobile phones have become a lifeline for many, especially the poor and the vulnerable for receiving wages, humanitarian services and getting health information. However, these services could be affected if the Governments did not step in to help the mobile services as the economic fallout from the crisis is also putting pressure on providers.
The economic fallout from the crisis is putting pressure on mobile providers, just as their services are needed most, according to an article in the World Economic Forum. It also said that though the mobiles deliver a lot of services and connect people at times of pandemic like Coviid-19, a lot of people are still excluded from this vital technology, especially marginalized groups such as refugees and asylum seekers.
The World Economic Forum article has come up with three ways that the governments can step in to ensure mobile services help the most vulnerable communities fight the pandemic and access essential support.
Mobile money services have long played a positive role in fostering social and economic inclusion around the world. In the article, the authors say that 2.7 million people in 44 countries have received cash voucher assistance through mobiles since 2017. The digital cash based transactions have increased by nearly 50 per cent since 2017 and these have become more important after covid 19.
Moreover, the governments and organisations around the world are now using more of the digital transactions to avoid the risk of covid-19 transmission. However, the article points out that several marginalized groups such as refugees find it difficult in countries where identity proof is required to get mobile services They say that about one billion people face such an identity gap across the world. This means that a lot people are left out from receiving financial aids, important information and even communicating with family members. The y noted that research conducted in 2018 by UNHCR and GSMA (the global mobile industry association) found that these barriers were a common problem across 25 refugee housing countries.
In the article, it is said that the governments should temporarily ease identity proof requirements for certain services for marginalized groups such as refugees to facilitate assistance during COVID-19. They note that such measures should be balanced against the risk of supporting criminal activities like money-laundering or the financing of terrorism.
Moreover, they say that effective collaboration and coordination between Central Banks and Telecommunications Regulators can ensure that the proof-of-identity requirements (and any temporary measures) for accessing sim cards that are consistent with those for opening mobile money accounts and in line with global recommendations.
Supporting mobile money businesses
With several governments and regulators encouraging use of digital payments to reduce coronavirus transmission, the authors opined that they should also support the industry. While cutting the costs can boost the use of mobile money, it can have negative side-effects for businesses and entrepreneurs in the sector. The article pointed out that the providers are affected in case of person to person transactions, wherein more than 90 per cent of the money is circulated in the mobile eco system, waiving the fees for extended periods. It said that a drop in revenue can make it difficult for providers to sustain strong agent networks, which has far-reaching implications for humanitarian assistance.
They also pointed out that agents also played an important part in the wider economy and can contribute to inclusive growth. In the article, they say that Governments should keep in mind this potential knock-on effect on providers and agents when they consider waiving fees.
Ensuring agents are not cash-squeezed
The agents can be in crisis because of the covid-19 pandemic. The operators may struggle to step in and provide cash to agents if their revenues are already under pressure from lower transaction fees. The governments should encourage interest-free emergency loans for small businesses and agents, temporarily reducing or removing taxes where appropriate, and ensuring that banks make cash available to mobile money agents. Banking and mobile money should be declared as ‘essential services’ so that mobile money agents can continue to work and let people withdraw and deposit cash. Governments should also encourage acceptance of digital payments by small enterprises
Unlocking the power of mobile services
They governments, mobile industry and regulators should encourage digital payments through conducive policies, alleviate the cost of living pressure on users of mobile money services while ensuring the sustainability of mobile money businesses.