Phones, Payments and the Pandemic: Covid’s Impact on How We Communicate and Spend Money

• 8 in 10 people are actively engaged in the prepaid economy – paying for goods/services in advance or as they go

• Engagement in prepaid services is income agnostic with 84% of higher-income earners participating in some tenet of the prepaid market

• Consumer confidence remains high among prepaid users despite the Covid-19 pandemic

• Cash is still king, but pandemic could stimulate the need for prepaid cards and vouchers to meet the needs of both unbanked and wealthier consumers

   

27th January, 2021 – The release of the Inaugural Ding Global Prepaid Index (GPI) has produced unexpected findings of an untapped market with high growth potential that has been accelerated by the Covid-19 pandemic. This bi-annual global study commissioned by Ding, the world’s largest mobile top-up service, examines the views of 7,000 respondents across the US, the UK, France, KSA, UAE, Qatar, Brazil, Indonesia, and the Philippines, regarding their engagement in the prepaid market and their attitudes towards it. The prepaid market is defined as people who use prepaid mobile billing; prepaid financial products such as prepaid credit cards; prepaid utility bill payment, or prepaid gift cards / vouchers.

Market Intelligence – what the report tells us

This report is telling: 79% of respondents use at least one prepaid service, while 45% use two or more; prepay is seen as a more flexible way to engage the services they need and want rather than bill pay (or postpay) options. Prepaid mobile bills account for the highest usage (61%), followed by prepaid utility bills (31%), prepaid vouchers and gift cards (19%) and prepaid financial products such as a prepaid visa card (17%).

While many assume that the prepaid market primarily serves those in a lower income bracket, the study has revealed that a high number across all income brackets in fact engage in prepaid services. From higher-income earners with 84% of respondents in this bracket stating they use prepaid services, 78% of low-income earners using prepaid services, and 79% of medium-income earners.

“The Global Prepaid Index has revealed the enormous market potential for prepaid products,” said Mark Roden, Chief Executive and Founder of Ding. “Our research shows that prepaid products attract all walks of life, with many people engaging by choice rather than out of necessity. In an era where we can use technology to provide better transparency and control over our finances,  as well as to use it to quickly access services, it is no surprise that people are willing to have their electricity or mobile phone service cut off for example because, in minutes, they can just top it up again.”

Market Opportunity

“Today we see a business opportunity to cater to the prepaid market more than ever,” said Roden. “The Covid-19 pandemic has accelerated this trend not only due to financial uncertainty but also with many unable to see their loved ones in person due to social distancing and restrictions on international travel. Even on our own platform, we have seen close to a 50% uptick in prepaid transactions during 2020, with customers prioritising keeping in contact by either topping up their own phones or sending airtime to others.”

The Human Element

The study has shown that vaccine hesitancy is higher in countries where citizens have the luxury of choice, whether that be choosing to take the vaccine, or being able to engage in safe practices such as social distancing or working from home. Brazil (71%) followed by Indonesia (69%) are most likely nations to take the Covid-19 vaccine, with participants in France expressing a shockingly low percentage of 33% vaccine acceptance, followed by the US at 42%.

78% feel Covid-19 is the most serious crisis we have faced in recent times.

Similar results were observed when comparing countries with freedom of press and trust in their government. France, the UK, the US and Brazil score the lowest when it comes to their belief that their respective governments are doing all they can to handle the crisis. Confidence in government handling of the crisis is strongest in KSA, the UAE, Indonesia and the Philippines. This shows a potential correlation between countries with high freedom of press (also freedom of disinformation), and a lack of trust in their governments, as well as and a higher trust in government in countries with limited press freedoms.

Socio-Economic Outlook

The data revealed that consumer confidence is higher among prepaid users. When compared to the Global Consumer Confidence Index, which is at 52.1, Ding’s Global Prepaid Consumer Confidence Index sits at 55.1, with those in the prepaid ecosystem having a slightly more positive outlook on current and future events.

Overall, 85% of those surveyed still choose cash as their preferred payment method. When asked why, 43% stated that it is merely a preference, and 32% stated it helps them to better budget and control their spending. Similar results were seen when asked about those who prefer to use prepaid debit cards, with 28% stating it was just a preference and 25% referring to budgeting.

“It is interesting to find that cash is still the preferred payment method around the world,” continued Roden. “However, the pandemic has also seen many businesses no longer accepting cash due to the infection risk. Prepaid cards and vouchers meet the same needs as cash, and this survey has shown there is potential to meet the needs of the unbanked consumer, who is more common and more diverse than anticipated.”

About the Ding Global Prepaid Index (GPI)

The Ding Global Prepaid Index (GPI) is a bi-annual global survey analysing the prepaid market. The inaugural GPI shines a light on the people who are using prepaid products and services either through choice or necessity to live in the world today. 7,000 respondents were surveyed across Europe, Asia and the Americas regarding their use of prepaid offerings, examining the attitudes, activities and outlook of this cohort of consumers in particular during the Covid-19 pandemic.

Those surveyed were evenly distributed across gender and aged over 18, 30 percent of the sample also identified as ex-pat workers.