COVID-19 altered the world's financial landscape in 2020. It dramatically boosted mobile payments last year particularly in the emerging markets of Asia Pacific1 and Latin America2. Data from these regions showed that the pandemic contributed significantly to the usage of mobile payments and mobile wallets. This phenomenon is a major force in opening the door to financial inclusion for the mass market segment.
Mobile payments have already brought billions of new consumers into the digital economy, with the help from a wide variety of digital payment services. They enable many consumers to make financial transactions online for the first time. Boku, a mobile payment processing company, reported that more than 2.8 billion mobile wallets3 were in use in 2020 worldwide. The report forecasts this number to increase by nearly 74% over the next four years, to reach a total of 4.8 billion by the end of 2025.
The unbanked segments in Asia Pacific and Latin America remain large, although some countries in Latin America4 have narrowed the gap due to the pandemic. We believe that with increased smartphone usage, internet access, thriving entrepreneurship, a flood of venture capital and strong innovation, a booming digital economy is shaping up.
Companies like Grab, Revolut, Rappi, Mercado Libre and Nubank are opening their financial doors to the unbanked. These companies create new possibilities in financial services for billions of businesses and people who previously had access to only a cash-based economy.
As global mobile wallet users are predicted to reach 1.6 billion in 20235, with an average transaction value per user to hit $1,289, that’s good news for everyone.
What are the implications of these changes for insurance? We need to create a new “possible.” How? Below are some strategies on how we can do that effectively:
Chubb is a market leader in this journey. It is focused on creating new possibilities for insurance by partnering with leading consumer brands in retail, e-commerce, banking, fintech, airline, telecommunications, and other industries.
We are actively leveraging the full capabilities of Chubb Studio®, a global platform that simplifies and streamlines the distribution of insurance products for consumers. We collaborate with various third party brands to add digital insurance options to their products and services through a website, a widget, or an instance of deep integration, whichever works best to define the new possible, with all involved parties committed to structuring transactions in ways that help ensure they are compliant with applicable insurance laws and regulations.
At the end of the day, the unbanked customers must finally be able to access simple, affordable and relevant insurance products so that they are protected.
1 Asia-pacific mobile payments market - growth, trends, covid-19 impact, and forecasts (2021 - 2026) by Mordor Intelligence, https://www.mordorintelligence.com/industry-reports/asia-pacific-mobile-payments-market
2 Latin America Online Payment Methods 2021 Post COVID-19 by Research and Markets, https://www.businesswire.com/news/home/20210812005583/en/Latin-America-Online-Payment-Methods-Report-2021-Mobile-Payments-Gained-Momentum-in-2020-with-Over-70-of-Mercado-Libre-Online-Sales-Made-Via-a-Mobile-Device---ResearchAndMarkets.com
3 2021 Mobile Wallets report by Boku and Juniper Research, https://financialit.net/news/e-wallets/study-more-half-worlds-population-will-use-mobile-wallets-2025
4 Latin America Payments 2021: The good, the bad and the ugly by Americas Market Intelligence https://americasmi.com/insights/latin-america-payments-2021-the-good-the-bad-and-the-ugly/
5 Statista, https://www.paymentscardsandmobile.com/global-mobile-wallet-market-value-set-to-reach-1-trillion-in-2020/
6 Resilience Index 2021 by Swiss Re, 15 June 2021, https://www.swissre.com/institute/research/sigma-research/2021-resilience-index.html
7 Page 8 of the ‘Understanding and Addressing Global Insurance Protection Gap’ by Geneva Association, https://www.genevaassociation.org/sites/default/files/research-topics-document-type/pdf_public/understanding_and_addressing_global_insurance_protection_gaps.pdf
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