What we’re looking at: Digital payments lifelines for cash-strapped Lebanon, digital solutions to overcome COVID, fintech and war in Ukraine

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Digital trade offers Lebanon a lifeline

Lebanon’s economy has imploded after decades of government mismanagement. Its currency has lost more than 90% of its value against the US dollar since 2019, and the banking sector is in shambles. When foreign capital dried up, the government enacted strict capital controls preventing Lebanese from withdrawing their dollar savings. This has led to mass protests and even fake bank robberies – desperate attempts by some to get their hands on their own money. The International Monetary Fund has asked Beirut to reform its zombie banking sector in order to unlock bailout funds – but to no avail. As a result, many have turned to digital payments. Digital wallets like Purpl and peer-to-peer money transfer apps allowing users to pay companies directly have become a lifeline for the country’s 6.7 million people, many of whom rely on the diaspora. 15 million strong Lebanese to stay afloat. Dima Assad, director of Nada Debs, a Beirut-based interior design firm, said her business had to switch to a payment gateway called PayTabs, based in the United Arab Emirates, when credit card payments in dollars Americans were blocked. Additionally, fintech offerings have been a game-changer for the 55% of Lebanese who do not have access to bank accounts. Previously, unbanked people lined up at Western Union – and paid high fees – to send and receive money, but they can now use smartphones or laptops (78% have internet access) to access funds while incurring lower transaction costs. The economic situation in Lebanon remains dire, but digital trade offers a lifeline.


How COVID has impacted digital commerce

When the sudden onset of a deadly new coronavirus in early 2020 began to force political leaders to restrict the movement of unprecedented numbers of people, it didn’t take much foresight to predict an increase in trade electronic. The move towards greater volumes of digital commerce has accelerated for years, primarily for economic and financial reasons, but the inability of businesses to onboard customers or meet the needs of other businesses has driven this trend. history at overdrive. It’s a phenomenon that billions of people have experienced first-hand over the past 32 months as their work and shopping habits have changed. In this sense, COVID has raised expectations of long-term economic gains as pandemic-related necessities have become mothers of invention.

But there are disadvantages that we must consider. This acceleration ensures that the “creative destruction” that fuels all major macroeconomic gains – the collapse of some industries and businesses as more efficient and profitable others take their place – has disrupted lives and livelihoods. sustenance of many more people in a shorter period of time than any other economic phenomenon of the recent past.

And the digital divide, both within and between countries, may well have widened, as those with access and expertise in digital trade move into the future much more quickly and easily than those without. don’t have any. The pandemic is not over, especially for China, which has been the main driver of global growth for many years. We need a lot more data to understand the positive and negative impacts of COVID on digital commerce and its global impact. But these are topics that will deserve careful study in the years to come, as life and commerce settle into a new normal.

E-commerce at war

Doing business in a war zone presents, shall we say, additional challenges. Mobilizations draw workers to the front lines, battle lines cross sea routes, and general uncertainty hampers both investment and trade. Ukraine’s agricultural exports – its main export sector – in the 2022-2023 season (until August 19) fell by 51.6% compared to the previous year, and the World Bank forecasts now that its GDP will contract by 35% in 2022 (compared to a 4.5% drop in Russia’s GDP). But e-commerce platforms can provide a new way to help local businesses reach global audiences even as conflict rages. Last month, for example, the Ukrainian government launched an online marketplace called Made with Bravery that allows Ukrainian artisans to sell their wares around the world. The platform is only available to businesses based in Ukraine, and it donates 5% of all revenue to a foundation that helps rebuild parts of the country hard hit by fighting. (Full disclosure: Made with Bravery was launched in partnership with our sponsor, Visa.

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Elaine R. Knight