At the height of the Covid-19 pandemic it was vital to send money easily and safely to friends and family.
Being indoors for months on end made it clear that a system to send money across the globe was vital for financial survival.
According to the 2022 Mastercard Borderless Payments Report, families around the world used cross-border payments networks and in the pre- and post-pandemic era, and continue to do so.
In the report, Mastercard said that it had surveyed nearly 8 000 consumers across 15 different markets.
The survey and eventual report found that all countries are sending and receiving cross-border payments more frequently than 12 months ago, according to a statement by Mastercard.
What is driving this?
Supporting one’s family is the main answer to this and is a key driver to sending money overseas.
Mastercard stated almost “six in 10 people globally (59%) say they send money abroad to support family and friends”.
The report also suggests that that trend is likely to stay as many countries are on the cusp of recession and in a financial crisis.
“Globally, over four in 10 people (42%) are making or receiving more cross-border payments than 12 months ago. This is compared to 51% in South Africa. Over the same period, 25% are making or receiving less cross-border payments, higher than the global figure of 19%,” the report read.
PEOPLE ARE CASH-STRAPPED
There is no doubt that given the economic impact of Covid-19 and other global events on the world economy – including the Russia invasion of Ukraine and the impact that had on oil markets – people all over the world are facing tough economic situations.
This was highlighted in the report: “Nearly half (45%) of those who make online cross-border payments surveyed globally say that family abroad are still struggling financially and need their financial support, while 40% say their families back home would not have survived the recent times if they hadn’t been able to send money home to help support them. In South Africa, these figures rise to 59%.”
The survey found that 54% of the respondents said that they “relied on online cross-border payments more than ever before”.
What is perhaps significant is that Mastercard suggests that this is a trend that is here to stay and may grow.
According to the survey, “71% of respondents said that even though they can now travel home, they will continue to send money online for ease”.
SAFETY IS VITAL
One of the most important things people look for when sending money overseas is safety. The report said that making sure your personal information is secure is vital.
“Over four in 10 people (41%) ranked this as most important – with the figure reaching 46% in South Africa.”
“A well-functioning cross-border payment ecosystem has long been a crucial element of the global economy and remittances have become even more vital for families to get by given the huge economic challenges countries around the world are facing”, said Stephen Grainger, executive vice-president, Mastercard Cross-Border Services.
THE BRIGHT SIDE
On a positive note, the report found that 2021 saw a recovery in financial transactions, despite the impact of the pandemic on economies.
“Around the world, 40% of workers surveyed in 2021 said they were making more money than before the pandemic, up from 28% the prior year.”
What drove this growth? Mastercard’s report found that two trends were responsible for the growth in consumer earnings – the reopening of the economy, and pandemic-induced labour shortages.
It should also be noted that side hustles have played a major role in driving up consumer income.
“More workers around the world are reporting side hustles, gig work and freelance income. Almost six in 10 survey respondents (57%) do work outside their main jobs.”
BUSINESS REPORT