Pandemic-catalyzed Digital Financial Inclusion: Evidence From the ASEAN Payment System

The COVID-19 pandemic has expedited the shift towards digital payment systems. This study examines the progression of digital financial inclusion in the Association of Southeast Asian Nations (ASEAN) - a region known for its advanced digital financial platforms - using data from the 2017 and 2021 Global Findex Database surveys. Our findings indicate that ASEAN’s adoption of digital account ownership, particularly mobile money, outpaced other regions, attributed to its pre-existing digital initiatives and infrastructure. We observed a notable decline in cash transactions, supplanted by digital payments during the pandemic. Among the less economically advanced ASEAN nations, the primary barriers to financial institution account ownership were insufficient funds and perceived lack of necessity for such services. Furthermore, our analysis reveals that ASEAN’s shift to digital payments was more rapid than in other regions, with women in ASEAN transitioning to online payments at a faster rate than their male counterparts.