Mastercard’s 2021 Outlook Finds Digital Economy Here To Stay

Mastercard, in its just-released Mastercard Economics Institute’s Economy 2021 report titled “The E-Conomy is Here to Stay,” looks at the past year’s economic trends in order to see what’s coming next for businesses, according to a press release emailed to PYMNTS.

The Economy 2021 study finds that digital spending will likely stick around after the pandemic at least in part. The release stated Mastercard estimates around 20 percent to 30 percent of the peak of the pandemic-related online shift will be permanent, or the equivalent of two years of accelerating that shift in the U.S. The shift includes everything from contactless payments to pick-up orders and “tele-everything.” In addition, the shift is now multi-generational with older people using more digital services now, too.

Also, in line with the shift is what Mastercard terms “Digital Main Street,” or the frequency of brand-new businesses being created on the internet rather than in a brick-and-mortar store. A total of 74 percent of new U.S. retail businesses have been launched that way since April, the release stated, citing data from the U.S. Census. Mastercard posited that this shift is likely to continue in the future.

However, Mastercard also noted in the release that the economy has recovered unevenly, favoring higher-income jobs while women and minorities often have a more difficult time.

The report, also emailed to PYMNTS, stated that the Latin American and Caribbean regions are facing a diverse set of issues. In Brazil, where an aggressive support package was pursued, the challenge will be coping once that support ends. Mexico is fighting a deep downturn and will need to bounce back quickly in the future. Other countries like Colombia, Ecuador and Peru could face skills gaps for workers because of mobility restrictions limiting migration. That could lead to higher unemployment.

In the Middle East, Mastercard stated in the report that it sees potential for growth as more people are using digital methods to shop. There’s also a shift away from cash, and going digital will create a new need for lifelong job retraining and learning as employment falls.

PYMNTS reported that as vaccines seem to be on the horizon, the numbers of survey respondents interested or not interested in a vaccine both hover around 38 percent each.