A Blessing in Disguise: Covid-19 Pandemic and the Emergence of E-Payment

Abstract

E-payment offers efficiency in terms of speed, security, convenience, and cost, especially during this pandemic. The study involves monthly data that spans from January 2016 to June 2021. This study aims to investigate selected payment channels and instruments' influence on retail e-payment transactions. The study is also interested to examine the interaction effects of Covid-19 on the relationship between credit card usage and retail e-payment transaction. The study employs Newey-West standard error regression in achieving the objectives. It is proven that traditional e-payment channels such as ATMs do not support the emergence of e-payment development in the country. The findings reveal Covid-19 significantly influences the emergence of e-payment in various ways. Unsurprisingly, internet banking usage showed great potential during the pandemic with a substantial increment since 2020. Oppositely, a credit card gives an adverse impact on the e-payment transaction and the impact is more apparent during the pandemic. In response to the new norm post-pandemic, the study suggests emphasis should be given to crucial e-payment infrastructures, particularly internet banking and debit card to foster the harmonization of the e-payment eco-system in Malaysia. Covid-19, despite its disastrous effect on society, blesses and supports the Financial Sector Blueprint 2022–2026.

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“…(1) Descriptive analysis is presented in table 1 where it can be seen that before covid-19 the average weekly use of e-payments was 7.17 times and that usage increased by 82.67% to reach 13.1 times per week and that is in line with the literature as stated by Ahmad et al (2023), Khan et al (2021), Al-Dmour et al (2021), and many others. Using kurtosis and skewness results to identify distribution normality of the data, it can be seen that both of them fall within the acceptable range of normal distribution since the data fall between ±3 and ±10 for skewness and kurtosis respectively (Klein, 1998).…”

“…Covid-19 lockdowns forced those consumers to overcome their fears toward financial technology and start exploring it. Ahmad et al (2023), showed that covid-19 significantly influenced the emergence of e-payment in Malaysia and that internet banking usage and e-commerce showed great potential during the pandemic with a substantial increment since 2020. Khan et al (2021), stated that as a result of covid-19 pandemic limited mobility the usage of e-payment methods increased dramatically.…”