Throughout the past few years, there has been an increased focus on mobile devices as payment tools. Although a lot of consumers seem to value the option of paying with their smartphone, this is only the beginning. Digital finance is transforming countries, both rich and poor, although the developing regions continue to struggle. At the same time, these nations are showing great signs of future growth.
Digital Finance Is The Way To Go
In the Western world, using a mobile phone or the Internet to pay bills has become second nature. In-store payments need to be handled as soon as possible, and mobile payment options are becoming more widespread. In developing countries, mobile solutions could make a significant impact. Unfortunately, most people there have little to no access to a bank account or a credit history.
A new study by McKinsey Global Institute predicts mobile financial services in developing markets are the area to focus on right now. In doing so, the GDP of these economies would increase by nearly US$4tn by 2025. Doing so will not be easy, though, despite the promise of success for digital payments.
While these digital payments would replace – most of – the usage of cash in developing countries, they would also allow for the switch to electronic record-keeping. As these regions start to see more digital growth, it is likely investors and businesses will try to tap these markets. At the same time, this should make it easier for consumers to receive credit, as it becomes a more widely available commodity.
Whereas established financial institutions see this opportunity as extra revenue for shareholders, digital payments can do so much more. In fact, these mobile financial services have the power to address inequality, poverty, and perhaps even remove government corruption. This latter is especially true as more consumers and enterprises deal with Bitcoin, rather than government-controlled fiat currencies.
Bitcoin And Mobile Payments Create Tons of New Jobs
Albeit a lot of people are concerned of how digital finance would reduce the number of jobs, the opposite is true. The McKinsey report stated how roughly 95 million new jobs would be created by digitizing finance in emerging markets. As the number of mobile phone owners continues to rise, it becomes even more important to focus efforts on these emerging economies. Bitcoin is playing a role of importance in several of these countries already, and will continue to do so in the next ten years.
Getting rid of cash in developing countries is not an easy feat, nor should it be. Cash provides consumers with a level of financial freedom, which should be a basic human right. Bitcoin offers the very same, but without any ties to traditional finance. Cryptocurrency will play a major role in the digitization of finance, although it may take several years before a major mind shift takes place.
Source: McKinsey
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