Written by Regina Gonzalez
March 14, 2022
As a result of the COVID-19 pandemic, we have seen a shift to a more digital economy. This refers to “all parts of the economy that exploit technological change”, which consequently transforms markets, business models, and day-to-day operations (Armstrong 2020). While this has numerous benefits, women tend to lack digital literacy skills as compared to men, especially in Southeast Asia (ASEAN) (Gupta 2021). In turn, they are not fully able to capitalize on the transformation to an increasingly digitized economy. One area in which this is prevalent is the digitalization of payment modes. Only three ASEAN states – namely, Malaysia, Singapore, and Thailand – meet the 69% global average of female ownership of online accounts (Gupta 2021). This can largely be attributed to availability and affordability, as well as deeply-ingrained social norms that make it difficult for women to be independent.
Particularly during the pandemic, contactless payments have become pivotal in sustaining our economies and limiting contact with the virus (Xiao and Chorzempa 2020). Moreover, cashless payments are “economic propellers” as they facilitate “the process of sending and receiving payments”; in fact, economies that have digitized can experience up to 3% growth in GDP (Massi et al. 2019). In addition, financial development can help reduce poverty rates, more quickly induce income equality, and increase the income of the poor (Cheah et al. 2021). This is because technology enhances “the speed, security and transparency of transactions”, while also eliminating the importance of physical distance in handling finances (Pazarbasioglu and Garcia Mora 2020). This highlights the value of utilizing digital payment methods both during the pandemic and beyond. Nevertheless, women in the ASEAN region still prefer traditional cash payments as compared to men. As such, most countries in the region (except Malaysia, Singapore, and Thailand) even fall below the 58% mean of global lower-middle income countries’ female ownership of online accounts, and women in the region are 0.76% less likely to use mobile money as compared to men (Cheah et al. 2021).
One of the major reasons for this is insufficient funds to open and maintain an account. Further, when a male in the family already has an account, women are less inclined to open one, hinting at a negative perception towards female autonomy in handling their finances. Another key issue is that women in lower-middle income countries are 8% less likely to own a phone as compared to men, and 20% less likely to access the Internet through a mobile device (Cheah et al. 2021). Combined, these factors present obstacles in encouraging women to utilize online banking and payment methods. Hence, in ASEAN countries, the only payment mode with which a gender gap does not exist is cash (Cheah et al. 2021). Evidently, this highlights the persistence of gender inequality in (online) financial institutions in the region. This can hinder women’s opportunities for (economic) independence. Firstly, using online payments saves time and money by not having to physically go to the bank. Moreover, digital banking enhances privacy and control, such that women can “better invest in their business, increase profits, and get jobs” (Klapper and Goodwin-Groen 2015). Yet, because of the persisting gender gap, women cannot fully exploit these benefits.
To counter this, the rapidly growing digital ASEAN economy can capitalize on new technologies, as well as improve the affordability and accessibility of smartphones, computers, and Internet; this will inevitably make online banking more attractive (Gupta 2021). Another key factor to closing the gender divide is to enhance the digital skills of women, whether it be through providing additional courses or by improving school curriculums. While online finance is a realm in which gender inequality still persists, there are clear incentives to continuously reduce this gap.
Sources:
Armstrong, B. (2021, October 14). The digital economy is becoming ordinary. best we understand it. The Conversation.
Cheah, Wen Chong, Ammu George and Taojun Xie, “Gender Divides in the ASEAN Payment Eco-system”, Research Paper #15-2021, Asia Competitiveness Institute Research Paper Series (July 2021).
Gupta, S. (2021, October 27). Gender Divide Meets Digital Divide in ASEAN's financial ecosystem. ACI PERSPECTIVES.
Klappen, L., & Goodwin-Groen, R. (2015, November 24). How Digital Financial Services Boost Women's economic opportunities. World Bank Blogs.
Massi, M., Sullivan, G., Strauß, M., & Khan, M. (2021, January 14). How cashless payments help economies grow. BCG Global.
Pazarbasioglu, C., & Garcia Mora, A. (2020, April 29). Expanding Digital Financial Services can help developing economies cope with crisis now and boost growth later. World Bank Blogs.
Xiao, Y., & Chorzempa, M. (2020, May 6). How digital payments can help countries cope with pandemics. World Economic Forum.
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