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.