With one million displaced, Lebanon turns to digital wallets for aid
20 hours ago
- #displacement
- #fintech
- #humanitarian crisis
- Israeli attacks since March displaced over 1 million people in Lebanon, with many sheltering with relatives, renting, or sleeping in cars or outdoors, straining fragile infrastructure.
- Over 130,000 displaced people crossed into Syria, needing urgent food, cash, and shelter, as reported by the International Organization for Migration.
- Humanitarian aid increasingly flows through digital fintech platforms like Whish Money, PayPal, and Venmo, bypassing traditional channels and enabling peer-to-peer transfers directly to trusted individuals on the ground.
- Remittances to Lebanon, a proxy for war-related donations, total $6-7 billion annually (about a third of GDP), with costs averaging 11%, above the global average, and are shifting toward emergency support via digital wallets.
- Whish Money, originally for digitizing gift cards, evolved into a financial platform serving the unbanked, with over 2 million users in 110 countries, facilitating remittances and P2P transfers, especially crucial during Lebanon's banking crisis.
- Displacement has changed platform usage: transaction patterns show larger purchases for essentials as uncertainty grows, with increased inflows from abroad during Ramadan, Eid, and due to donation drives.
- Aid is often organized informally through influencers and grassroots campaigns, reflecting low trust in Lebanese public institutions, with digital platforms ensuring speed and accessibility while undergoing anti-money laundering checks.
- Digital donations operate in a regulatory gray zone in Lebanon, with risks like unlicensed fundraising being criminal in some countries, but platforms emphasize trust as the new currency amidst shattered faith in banks.
- Fintech is seen as disrupting traditional retail banking, with innovations in money and inclusion happening outside banks, which may become mere pipelines in the future.