The COVID-19 pandemic spurs post offices to go digital in remittances

The COVID-19 pandemic prompted governments to reaffirm post offices as their infrastructure for delivery of essential services to the population at large, including the vulnerable, elderly and those in outlying rural areas. Among other services, this provides an important contribution in ensuring continuity in transmitting migrant remittances in many corridors around the world. Post offices remained open in locations in the first mile, where migrants work and live, providing the opportunity to send cash, as well as delivery in the last mile in the receiving countries, at the post office or at the doorstep of the migrant families. The COVID-19 crisis has shown that post offices fulfil a relevant role in sending money across borders, as well as from urban to rural areas. They are a resilient part of the access infrastructure to services, with potential to convey a message about using financial services.
The crisis has urged many Posts to leapfrog the digitalization of their offer in remittance services, which responded to the crisis with launching or scaling up digital wallets, offered as an attractive and low-cost alternative to send or receive money. Digital wallets are increasingly being offered by Posts as a new product feature. The remittance funds can come from a bank account, a payment card, and payments from other wallet holders or cash top-ups.
Using digital wallets as a way to either send or receive money allows Posts to have a larger reach to unbanked customers and to make payments faster, more accessible and cheaper than the traditional cash and bank transfers. With digital wallets, remittances become accessible, reducing the need and costs for IT investments in rural post offices and for small merchants.
The overall impact of the pandemic is expected to trigger Posts increasing their offer of digital wallets for remittances, and linking it to other financial services enhancing financial inclusion and e-commerce – making payments easy, simple, convenient and cost-efficient.