The pandemic is affecting the way people interact with money; how much we spend, what we buy, and whether to opt for digital payments. In the United States, the switch to digital has even led to a coin shortage, and the rest of the world is more reliant on cashless options, too.

As a cornerstone digital tool for development, digital payments have promoted efficiency and effectiveness as well as expanded financial inclusion. In addition to benefits such as decreasing costs, promoting transparency, and saving time, the contactless nature of digital payments is a more notable benefit as the COVID-19 pandemic necessitates social distancing.

While the data on uptake and outcomes is still materializing, there are several examples of significant increase in the use of digital finance attributed to COVID-19. As of April, person-to-person mobile money transactions had increased by 485 percent as a result of the March lockdown in Rwanda.

Governments in several countries have helped drive demand by waiving transaction fees to attract customers, although this has had the unintended side effect of decreased profits for service providers, reinforcing the importance of weighing benefits and risks when implementing digital tools.

EricaBblog.jpgPicture from USAID's Digital Flickr page. Credit: Brooke Patterson/USAID, November 2013.

As we increasingly use digital tools in development work, are we taking the right steps to ensure we are responsibly meeting the needs of those we serve?

In April, the U.S. Agency for International Development (USAID) released its five-year Digital Strategy, which is implemented through four tracks and 16 initiatives. One initiative specifically focuses on promoting the uptake of digital payments, a tool USAID has championed for over a decade and aims to make the default method of payment under all awards.

The launch coincided with the onset of the pandemic, which is on point with the increased need to catalyze priorities to support digital tools. In addition to pledging more than $1.335 billion in funding for COVID-19 response, USAID has released a set of targeted COVID-19 guidance documents specific to digital opportunities.

USAID’s Considerations for COVID-19 Response in Digital Payments lays out priority precursors and is particularly useful for social safety and relief payments. Turning to mobile payments is a tool in the “pivot” toolbox. While there are many factors to consider in transitioning to digital, USAID focuses on several related to mitigating unintended harms when designing and launching digital payments:

  • Target those who need it most and reach them through engagement with the people they trust.
  • Tailor onboarding for the target population—if done properly digital payments can reach the masses or if not, can further exclude. For example, if your target population can’t meet basic enrollment legal requirements (such as proof of identity) then your intervention could exclude them altogether.
  • Evaluate liquidity potential to ensure there is enough funding in the targeted location to support ongoing liquidity for cash out or consistent digital transactions. If not, you may be sending your beneficiaries a useless payment.
  • Incorporate inclusion by considering gender, age, social groups, race, etc., with equal access to phones, connectivity, and other requisites.
  • Monitor programs to ensure they work effectively and iterate on issues that arise.

These suggestions to guide digital payments programming decisions have been developed based on lessons learned from digital payments program design during COVID-19 digital response and other public health emergencies, such as Ebola. USAID is committed to easing these transitions to digital payments and supporting partners in doing so through resources such as the Electronic Payments Toolkit among others found on

Erica Bustinza is the Digital Strategy Project Director for the DAI-led Digital Frontiers project. This post first appeared on ICTWorks.