The PNG market has quickly adapted to 64% Visa contactless transactions, significantly higher in comparison to other markets within Asia Pacific such as Taiwan, Hong Kong, Malaysia and Philippines. Nuni Kulu_thumb Bank South Pacific's Digital General Manager - Nuni Kulu, in giving an insight on BSP's commitment to digital innovation in Papua New Guinea, said; this is an impressive start for BSP Digital Payments journey with an adoption rate over a four (4) year period for the PNG market, which has typically taken developed countries such as Australia, Singapore and New Zealand over 8 years to achieve. As more goods and services are purchased using various electronic mediums, we transition away from the dependency to use of cash or cheques. Digital payments using cards on channels such as ATMs and EFTPoS have been in our markets for over three decades and our banked customers still dependent on these traditional payment channels to carry out their everyday transactions. We however, seeing a rise in alternate payments, alternative payment methods are bringing new ways for customers to transfer funds online using electronic funds transfer (EFT) for payments in a secure and password-protected manner. The customer is carrying out payments and banking on their readily accessible mobile devices. The accessibility to the simplest phones 'one bang' is driving a connected population who are now gravitating to this style of payments. The increasing adoption of mobile phone devices in the Pacific is supported by improving expansion of telecommunication networks and we are seeing a direct correlation with an increase in Mobile Banking transactions. As for the current unbanked who are still accustomed to using cash, it is the role of all financial institutions to drive financial inclusion and offer relevant banking solutions to encourage our population to deposit value through use of Digital Solutions. BSP, offers our mobile banking service as contextually suited solution that accommodates all literacy levels and applied an affordable banking solution for the masses as we have made the session time free, the customer does not require mobile credits to carry out their payment or financial transaction, all they need is an active sim and a mobile device. As reported in the media, the impact of Covid-19 on our economy resulted in an increased budget deficit from K4.6b to K6.6b by the PNG Government. Although the pandemic has been a disruption globally, it has also acted as a catalyst in changing the way we do business by accelerating alternative contactless digital payments, driving existing digital banking solutions and alleviating geographical dependencies on service reach for the business sector. Enhanced digital experience for BSP customers will see new changes in banking and technology will always play an increasing role in how we provide Client Banking, regardless of the gap between technology and human adaptability. Ultimately, humanity is shifting toward connection by devices for news, weather, food, clothes, music, and banking. BSP plays an integral role in influencing both customers and businesses to adapt to the "new normal" or "Niupela pasin" by providing cost effective and streamlined digital solutions through domestic and global commerce that will help stimulate economic activity. With a digital customer base estimating at an average of 400,000+, BSP endeavors to increase the market appetite toward adoption of alternative payment methods. As depicted, within a 5 year trend, consumers are shifting towards non-card payments, preferring Mobile Banking. MB vs EFTPoS graph In the first quarter of 2020, BSP introduced Mobile Merchants services for Merchants payments, utilizing the USSD Mobile Banking platform to make school fee payments for education institutions and in November, extended the solution to other industries. The Mobile Merchant service is cost free to merchants, enabling local SMEs an alternate platform that offers a cheaper payment option for customers to use mobile banking for payments. Merchant Service Merchant Monthly Fee Customer Transaction Fee EFTPoS Merchant PGK 50.00 0.25 t Mobile Merchant No Charge 0.10 t BSP introduced the Customer Self-Service App, a smartphone app for customers to submit BSP Personal Loan applications online to meet. Customers have embraced this online approach, with over 3300 downloads of the app, and an increasing number of online loan applications received on a daily basis. Concurrently, BSP's Internet Payment Gateway (IPG) service is providing businesses' opportunity to sell their products and services through an app or website, allowing customers to simply click to pay on their smartphone or laptop 24/7. The BSP e-Commerce ecosystem has increased with key businesses within the various industries such as tourism, catering, retail, and health insurance. BSP understands the evolving changes within the payment landscape that has propelled the financial industry toward Digital Innovation, therefore strategic partnerships are essential to extend delivery of innovative solutions, hence the establishment of BSP's Fintech - Platform Pacific Ltd will further enable BSP's digital capabilities. BSP 2021 Digital Payment initiatives will enhance the payment landscape and provide the conducive environment to increase financial inclusion to regional markets and drive digital adoption. On the horizon for 2021, highlights the launch of the BSP IPG Domestic Payments, a non-card based solution, which targets online merchants for business-to-customer (B2C) transactions, effectively increasing market reach for businesses within PNG. Digital technology and capability know-how is at our doorsteps, but the stark reality is 80% of the market are yet to come onto our financial systems. And even when we have 20% banked, we have to relentlessly expand financial literacy and continue to advocate financial inclusion in our product offering to enable the people of PNG to access financial services. BSP's primary focus to expand reach and adoption for financial inclusion for our people in all regions throughout the country, does not come with a one-size fits all approach. We are creatively designing solutions that meet the demographics, connectivity bandwidth and cost effective needs in all regions BSP operates in, which is every province in PNG and within the Pacific. 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