Are Women More Financially Excluded Than Men? Why Covid is Shining a Light on Financial Exclusion

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The pandemic hasn’t been the “great leveller” that many have suggested. In fact, in many cases it has exacerbated inequality, and nowhere is that more true than access to digital services and payments

Someone with clear thoughts on this topic is Louise Clements, Chief Marketing Officer at Paysafe. Louise is a proven, digital marketing professional with over 20 years of experience in leading high growth sales and marketing teams in multiple sectors. In her role, she is responsible for developing a results-driven marketing and corporate communications strategy that drives further usage of Paysafe’s B2B and consumer payments solutions. She oversees the company’s team of over 120 marketeers around the world. Before joining Paysafe, Louise held various executive roles for several high-profile organisations, including AOL and Facebook, as well as at leading digital marketing agencies. 

Here she shares how the pandemic is shining a light on financial exclusion.

PaysafePaysafe
Louise Louise Clements, Chief Marketing Officer, Paysafe

In the early stages of COVID-19, there was a sense that the nature of the pandemic and its consequences was non-discriminatory. As the virus spread quickly, and governments reacted by enforcing social measures to protect individuals and health services, authorities were quick to tell us that will were “all in this together”, and that adhering to the universal guidelines would be the roadmap to conquering the pandemic.

The sentiment was well-meaning. However, as the pandemic has rolled on and we have learned more, not only about the medical impact of the virus itself but also the social impact of the government responses, it is clear that neither is having a ubiquitous effect.

In fact, in many circumstances, COVID-19 has exposed and even deepened inequalities in society. One of these is financial inclusion. The pandemic has accelerated the shift to e-commerce and digitised services, and those that cannot access these risk their health in the short term as they are forced to continue relying on physical interactions. They are also being left behind once the world is reshaped beyond the pandemic.

The drive for digitised services and contactless payments

Digitisation, especially the growth of e-commerce, is well-documented. For example, when we commissioned a survey of consumers during the first wave of the pandemic 42% of consumers said they were shopping online more frequently and 18% were shopping online for the first time. And the majority plan to make this is a permanent shift.

Where consumers are still shopping in stores, there has been a drive towards contactless payments replacing cash. This is being driven by consumers to an extent, but also by stores themselves that are concerned about the safety of using cash during the pandemic. This has left unbanked cash consumers extremely vulnerable, with many saying they haven’t been able to purchase even basic provisions.

This situation is highlighting the inequality created by financial exclusion. Consumers that do not have access to traditional bank accounts are often prevented from accessing the digital economy, meaning that they do not have the choice to limit the amount of time they spend outside of their home. This increases the risk of contracting COVID-19. And even as they are forced to leave their homes to buy products, in many instances they are forced to compromise their activity by shops that refuse to accept cash.

Women are more financially excluded than men

Another element of financial exclusion that is even less frequently discussed, but has been worsened by COVID-19, is the difference in levels of financial exclusion between men and women. According to sources, 55% of the 1.7 billion unbanked population are women. Accessing digital financial services is also not as straightforward; there is also a gap of 8% between women and men when it comes to owning a smartphone in low- and middle-income countries and a 20% gap when it comes to use of the internet.

According to an analysis published in 2020 by UN Women, the global pandemic has put 47 million women into poverty, and it is estimated that in 2021 there will be 435 million women living on less than $1.90 (ca. €1.60) a day. There are many reasons we can point to that might contribute to an explanation as to why women are more financially excluded than men, but one thing that is certainly clear is that COVID-19 is making it an even more critical issue to address.

Financial inclusion must be a priority

As countries begin the road back to normality beyond the pandemic, the lessons we have learned should not be forgotten. Where the pandemic has shone a light on inequalities, now is the time for these to be addressed. Financial inclusion is one such area. Governments, financial services, and businesses across the globe have the power to make financial inclusion a priority, and now the consequences of exclusion are even more tangible there is no excuse not to act.

Facilitating greater access for more people to traditional financial services such as a bank account should be a global objective. But we can go further, including enabling consumers that do not have bank accounts to store and spend their finances digitally.

One solution for this is eCash, an alternative payment method that enables consumers to pay easily and securely at an online checkout using cash. This payment method is not tied to a bank account in any way, the consumer only needs physical currency to complete digital transactions with online merchants. For those that either cannot, or do not want to share their financial details online, eCash opens the door to using their preferred payment method digitally.

This can be completed in one of two ways; shoppers either pre-purchase a card with cash that stores digital value and can then be used as a source of funds in an online checkout, or the consumer initiates the transaction with the merchant online and is directed to a pay point to complete the purchase at a physical location with cash.

And eCash not only bridges the gap between the unbanked and e-commerce, through partnerships we can give cash consumers access to other financial services such as digital-only bank accounts, digital loan repayments, and paying bills online.

Digital wallets also enable consumers to store finances digitally, send money to friends and family digitally through a simple email address, and make purchases with online merchants.

Educating unbanked consumers on the benefits of these alternative payment methods, and facilitating them broadly, is the first step to reducing the inequality that the pandemic has highlighted.

  • Polly is a journalist, content creator and general opinion holder from North Wales. She has written for a number of publications, usually hovering around the topics of fintech, tech, lifestyle and body positivity.

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