Mastercard credit and debit cards. Photographer: Andrew Harrer/Bloomberg

Jamaicans more cautious with personal finances, using less cash — Mastercard

Mastercard credit and debit cards. Photographer: Andrew Harrer/Bloomberg

A Mastercard-commissioned study — conducted with Americas Market Intelligence across 13 countries in Latin America and the Caribbean — has found that Jamaicans are more cautious with their personal finances as their consumer habits change and their demand for more financial services increase.

The study also advises companies on the island to adapt to the digital ecosystem occasioned by the COVID-19 pandemic.

Contactless transactions and digital payments

“The survey report shows that, over the past months, once cash was seen as something “dirty” and dangerous in terms of contagion, e-commerce has become the only way to buy and online banks have offered the simplest way to handle money. The survey also found that confinement nearly doubled the increase rate of e-commerce during this time: from a pre-COVID-19 penetration of 45 per cent to its current 83 per cent,” a release from Mastercard outlined.

Jamaicans are using less cash for in-store purchases (File photo)

As e-commerce became a more reliable means of acquiring physical goods during the COVID-19 pandemic, 26 per cent of Jamaicans reported more frequent online shopping, 18 per cent indicated an increase in ordering their groceries online, and 10 per cent said they made their first online purchase during the pandemic.

“We are living in a time when safety, security and minimising our exposure to criminal and health risks are of utmost importance to cardholders everywhere. Through our innovative offerings, we have seen a shift to contactless transactions and digital payments, and this new mode of conducting business has paved the way for a new cashless normal,” Dalton Fowles, Mastercard country manager for Jamaica and Trinidad and Tobago, commented.

Mastercard Country Manager for Jamaica and Trinidad and Tobago Dalton Fowles (File photo)

Cash is no longer king?

Not only has the pandemic driven up the rate of e-commerce transactions, but it has also encouraged the use of debit and credit cards as an alternative payment method for in-store transactions. Currently, 42 per cent of the Jamaicans use credit or debit cards for their purchases in stores as the favourite method of payment.

“The most used payment methods used nowadays by Jamaicans are: 37 per cent debit cards, 18 per cent credit cards, 11 per cent bank transfer, 15 per cent digital platforms, and 16 per cent cash.

Smarter money management

However, while e-commerce has become the preferred method of conducting in Jamaica, consumers have become more inclined to exercising frugality.

E-commerce has become the only way to buy and online banks have offered the simplest way to handle money (File photo)

“Consumers also showed a strong desire to cut expenses, avoid accruing debt, manage their finances conservatively and acquire a long-term financial outlook,” Mastercard shared.

In this regard, 51 per cent of Jamaicans in the survey have shifted their main focus to saving money, 57 per cent of participants are thinking more about their future plans than before the pandemic, and 23 per cent have placed more importance on personal fnance and savings.