1、International Journal of Economics and Finance; Vol. 12, No. 11; 2020 ISSN 1916-971X E-ISSN 1916-9728 Published by Canadian Center of Science and Education 109 The Dynamic Relationship between FinTech and Social Distancing under COVID-19 Pandemic: Digital Payments Evidence Nader Alber1 Nicola et al.
2、, 2020; Chetty et al., 2020). So, many billion people tend to continue their life in isolation (Beaunoyer et al., 2020) caring about social distancing to minimize physical contact between individuals and thereby to reduce the possibility for new infections. Internet-based communications seem to have
3、 the main role in ensuring a successful social distancing strategy. As the COVID-19 crisis leads to create uncertainty, a lot of firms are under stress on a number of forehead. In the same time many companies of FinTech has an opportunities to grow under restrictions of social distancing. Access to
4、funding has been already becoming difficult, especially for some early-stage ventures, focusing on established FinTech business models. As COVID-19 breadths the world and disturbs the manner in which we connect and direct business, innovations can help by giving answers for keeping the required soci
5、al distancing. By diminishing the reliance on physical money related communications and the requirement for money, FinTech can encourage government reactions and empower secure ways for governments and suppliers to arrive at weak populaces rapidly and productively (Appaya et al., 2020). As social di
6、stancing has solidified globally, digital financial services and e-commerce have been increased in abnormal way (Beaunoyer et al., 2020). While we cant predict what form aftermath opportunities will take, we do notice that FinTech - a sector that is steeped in renovation - is likely to create new an
7、d conversional solutions. It is obvious that social distancing is accelerating peoples use of online - especially mobile channels, to view and manage their cash. Because many FinTech applications are purpose-built for the mobile devices, they often surpass in offering presentation, onboarding, data
8、visualization, and providing the right context for deals. These abilities will likely become even more relevant and important, as a greater number of financial transactions are managed through digital channels. Characteristics of social distancing include healthy culture, governmental procedures, ec
9、onomic structure and supply chains. Besides, transactions volumes and values of digital payments may differ according to infrastructure of telecommunications sector, infrastructure of the banking sector, average income per capita, population, buying behavior and wareness and financial culture. This
10、preprint research paper has not been peer reviewed. Electronic copy available at: https:/ ijef.ccsenet.org International Journal of Economics and Finance Vol. 12, No. 11; 2020 110 COVID-19 spread may have winners in the field of IT, while many of its losers are in stock markets. Stock market reactio
11、n to announcement about Coronavirus spread has been addressed by many papers during 2020, where. This has been conducted by Alber (2020a) in the European stock markets, Alber (2020b) worst 6 countries (according to number of cumulative cases), Peterson and Ozili (2020) in major stock market indices,
12、 Alber and Saleh (2020) in stock markets of GCC countries and Smales (2020) in US Stock sectors. This paper addresses a main question about the FitTech reaction to Coronavirus spread, where it investigates the effect of social distancing (in terms of Coronavirus spread) on digital payments (in terms
13、 of FinTec). This has been conducted on 10 countries (United States, United Kingdom, Egypt, United Arab Emirates, Saudi Arabia, Japan, South Korea, Italy, India and Nigeria) during the period from March to June 2020. After this introduction, section 2 illustrates the theoretical framework of FinTech
14、 and Covid-19. Section 3 explains how to develop hypotheses and measure variables. Section 4 is for testing hypotheses and section 5 summarizes the paper and provides remarks about conclusions. 2. FinTech and Covid-19 This section is about the theoretical framework of the research topic, illustratin
15、g an overview about FinTech, discussing FinTech under challenge of COVID-19 pandemic and addressing FinTech and its future opportunities. After that, we have illustrated the elements of enabling FinTech and the responses for payment and settlement systems during the COVID-19 Crisis. 2.1 FinTech: Ove
16、rview FinTech is the innovation and development that expects to rival conventional money related strategies in the conveyance of financial services. It is a rising industry that utilizes innovation to improve exercises in financial services. The utilization of mobile app and other derives for portab
17、le banking, contributing, getting financial services, and cryptocurrency are types of advancements meaning to make financial services more available to the overall population. FinTech has been assuming an expanding job in forming financial and banking scenes (Jagtiani Jiang et al., 2018; Hendriyani
18、Camacho et al., 2019; Sul, 2020), peer-to-peer system (Chishti, 2016; Puschmann, 2017; Mahardhika Guild, 2017; Jiang et al., 2018; Goldstein et al., 2019) and cryptocurrencies (Goldstein et al., 2019) refer to FinTech. Besides, Pavarotti et al. (2018) and Thakor (2020) address financial innovations
19、in terms of incremental strains and intensified competition, the retail payments market remains a vital driver for the entire banking sector. 2.2 FinTech under Challenge of COVID-19 Pandemic Beyond COVID-19: New opportunities for FinTech firmss and how FinTech are facing the COVID-19 challenge For i
20、nstance: a. PayPal has conceded fees on chargebacks and immediate funds from PayPal business accounts to bank accounts. b. Lending Club has added new suffering plans, including waiving late fees and allowing competent borrowers to make interest-only payments or exceed up to two monthly payments. c.
21、Square is waiving software subscription fees for Square Payroll customers. d. Stripe is fast-tracking support for telemedicine platforms. e. Flock, a drone insurance provider, is allowing its commercial customers to pause their policies when no work is being conducted. f. Kabbage worked with other F
22、inTech like Lendio, Finix, and Fundera to launch a platform that allows consumers to buy gift certificates to support local small businesses during the coronavirus pandemic. The gift certificates can be redeemed at any time, but small businesses receive the revenue within one business day of purchas
23、e. g. Nomo, a platform that assists freelancers in controlling their accounts, taxes, and invoices, is providing free temporary access to its fresh patrons. h. 7 Chord, the company behind the BondDroid AI engine that generates prices for corporate bonds, offering its services in temporary freely. Th
24、is preprint research paper has not been peer reviewed. Electronic copy available at: https:/ ijef.ccsenet.org International Journal of Economics and Finance Vol. 12, No. 11; 2020 111 i. Revolut, conducted recently in the United States, and a number of other fintechs have introduced a charitable-givi
25、ng feature within their apps which let customers can donate funds to those affected by COVID-19. j. In the UK, Wiserfunding, Nimbla, Trade Ledger, and NorthRow have formed a business-lending taskforce to provide a warder origination and underwriting platform that allows banks, alternative lenders, a
26、nd private debt lenders to virtually and digitally spread finances to businesses during the COVID-19 setting fire. k. Israeli FinTech firm Innovesta launched its COVID-19 Resilience Innodex (CRI). Using a proprietary artificial intelligence technology, the CRI assigns risk scores based on a business
27、 ability to combat the effects of a pandemic such as COVID-19. l. iwoca, an online lender, announced OpenLending, a platform that allows fintechs and banks to extend iwocas lending abilities to more than two million UK businesses. m. nCino has a dvanced a new solution to optimize the PPP loan operat
28、ion. n. Lendio is enabling small enterprises to apply for personal loans. o. Unqork improved a small business digital lending platform. p. Numerated, another digital lending platform is seeing an increase in banks interest in using its technology to manage the rise in loan demand. 2.3 FinTech and Fu
29、ture Opportunities FinTech entities may be obliged to reexamine their mission and business models after COVID-19. A prominent question is how to leverage both existing and newly developed assets to capture new opportunities in the coming decades. It could be a suitable time to think big and act bold
30、ly. a. Improving Partnership Strategies: As a result of COVID-19, FinTech may continue acceleration of partnerships with financial entities, which can offer the benefits of capital, distribution, and compliance infrastructure, but often affect sought-after digital solutions. b. Adopting Financial In
31、clusion Scenarios: The economic confusion of the pandemic is shedding light on the importance of serving individuals who are currently outside the financial system, both in developing and developed areas. According to the World Bank, there are 1.7 billion unbanked persons all over the world. It is p
32、ossible that COVID-19 may lead to major financial inclusion as a result of recent government programs all over the world to help low-income households. c. Accelerating Economic Relief Efforts: Many payments institutions may be well positioned to help in the more rapid expenditure of government relie
33、f funds, especially to those unbanked. Square, Venmo, PayPal, Finix, Plaid, Marqeta, and others - in addition to payroll-processing companies like Gusto - may play a big role in the coming times. d. Exploiting the Internet of Things: Another area is Internet of Things (IoT), that enable contactless
34、payments, such as connected cars that allow consumers to pay for gas or food without handling cash or other potentially infected surfaces. COVID-19 tend to accelerate the adoption of IoT-enabled payments. 2.4 The Elements of Enabling FinTech The Bali FinTech paper consist of 12 policy proposals and
35、cover issues related to enabling FinTech; ensuring financial sector resilience; addressing risks; and promoting international cooperation. These elements are (International Monetary Fund and World Bank; 2018): e. Embrace the promise of FinTech. f. Enable new technologies to enhance financial service
36、 provision. g. Reinforce competition and commitment to open, free, and contestable markets. h. Foster FinTech to promote financial inclusion and develop financial markets. i. Monitor developments closely to deepen understanding of evolving financial systems. j. Adapt regulatory framework and supervi
37、sory practices for orderly development and stability of the financial system. k. Safeguard the integrity of financial systems. l. Modernize legal frameworks to provide an enabling legal landscape. This preprint research paper has not been peer reviewed. Electronic copy available at: https:/ ijef.ccs
38、enet.org International Journal of Economics and Finance Vol. 12, No. 11; 2020 112 m. Ensure the stability of domestic monetary and financial systems. n. Develop robust financial and data infrastructure to sustain fintech benefits. o. Encourage international cooperation and information-sharing. p. En
39、hance collective surveillance of the international monetary and financial system. 2.5 The Responses for Payment and Settlement Systems During the COVID-19 Crisis According to World Bank, there a seven types of responses for the provision of payment services during the COVID-19 crisis, as follows: a.
40、 Changes to KYC and authentication requirements. b. Promoting and ensuring availability of digital payment mechanisms. c. Consumer protection measures and ensuring availability and acceptance of cash. d. Changes to Cybersecurity. e. FMI risk management (including operational reliability). f. Cash /
41、Cheque usage restrictions. g. Relaxation of Compliance requirements. 3. Data Describtion and Developing Hypotheses This study has been conducted on 10 countries (United States, United Kingdom, Egypt, United Arab Emirates, Saudi Arabia, Japan, South Korea, Italy, India and Nigeria) during the period
42、from March to June 2020. Social Distancing has been measured by community mobility reports to COVID-19, by daily data according to a country, for retail and recreation (X1), grocery and pharmacy (X2), parks (X3), transit stations (X4), workplaces (X5) and residentials (X6). Digital payments are meas
43、ured by transactions volumes (Y1) and transactions values (Y2). Community Mobility Reports aim at providing reflexing into the improvements that have arisen in response to COVID-19 pandemic battle policies. This report is based on data recording over time by geography, across various categories of p
44、laces. This report illustrates a percent change from baseline (14 February 2020). That includes six categories: Retail and Recreation; Grocery and Pharmacies; Parks; Transit Stations; Workplaces and Residential Figure 1 illustrates social distancing measures in 10 countries from 14 February to 25 Ju
45、ly 2020, as follows: In United States In Egypt -100 -50 0 50 100 15/02/202015/03/202015/04/202015/05/202015/06/202015/07/2020 -100 -80 -60 -40 -20 0 20 40 15/02/202015/03/202015/04/202015/05/202015/06/202015/07/2020 This preprint research paper has not been peer reviewed. Electronic copy available a
46、t: https:/ ijef.ccsenet.org International Journal of Economics and Finance Vol. 12, No. 11; 2020 113 In United Kingdom In United Arab Emirates In Saudi Arabia In Japan In Italy -150 -100 -50 0 50 100 150 15/02/202015/03/202015/04/202015/05/202015/06/202015/07/2020 -100 -80 -60 -40 -20 0 20 40 60 15/
47、02/202015/03/202015/04/202015/05/202015/06/202015/07/2020 -100 -50 0 50 15/02/202015/03/202015/04/202015/05/202015/06/202015/07/2020 -80 -60 -40 -20 0 20 40 60 80 15/02/202015/03/202015/04/202015/05/202015/06/202015/07/2020 -150 -100 -50 0 50 100 150 15/02/202015/03/202015/04/202015/05/202015/06/202
48、015/07/2020 This preprint research paper has not been peer reviewed. Electronic copy available at: https:/ ijef.ccsenet.org International Journal of Economics and Finance Vol. 12, No. 11; 2020 114 In South Korea In India In Nigeria Figure 1. Social distancing for 10 countries Source: Community Mobil
49、ity Reports to COVID-19. Kruskal-Wallis test has been used to examine the significance of variation among social distancing and digital payments measured by transactions volumes and values. This has been conducted on 10 countries (United States, United Kingdom, Egypt, United Arab Emirates, Saudi Ara
50、bia, Japan, South Korea, Italy, India and Nigeria) during the period from March to June 2020. Table 1 illustrates this test as follows: Table 1. Kruskal-Wallis test output for social distancing Social Distancing Tansactions Volumes Transactions Values Chi-Square 22.29146 34.37561 36.322 df 9 9 9 Asy
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