The COVID pandemic changed the way we live, work, and socialize in dozens of ways.  We have attended weddings, funerals, and graduations by Zoom.  We have made major purchases – like cars and houses – after virtual tours and without any physical in-person visits.  While some of us are eager to return to hugging our loved ones at big family holiday get togethers, others welcome the (perhaps permanent) shifts toward flexibility and digital connection that the pandemic has brought.

One of the largest shifts we have seen during the pandemic has been in the way that governments deliver services to citizens and businesses.  Almost all industries shifted their operations online to respond to shutdowns and social distancing requirements – from retailers to healthcare providers.  Mastercard SpendingPulse data in the US for March 2022 found that eCommerce went from 12% to 18% of commerce virtually overnight during the pandemic and is currently holding at that level.

Just like 7-Eleven and Whole Foods, governments also made the very rapid shift toward providing digital services to their citizens and businesses.  Whether applying for a business license, paying a parking ticket, or getting a passport, individuals that used to go to the post office or City Hall could now make dozens of requests and purchases from the government from the comfort of their own homes.  This has been a drastic change in the way citizens and businesses interact with their governments.

With almost two years into the pandemic, it is useful to take a step back and see what we have learned during this shift – and what we can do to bring the best components of this change while minimizing the challenges and risks going forward.

  1. Most citizens and businesses like the convenience of digital government services – even those that thought they wouldn’t at first.  For many the change happened almost overnight and was not always welcome – many still sought the opportunity to go into a government office to address their needs or concerns.  However, once necessity required them to make the shift, citizens and businesses were often surprised at how convenient and simple it was to register, apply, and pay for services online.  Who knew that renewing your license or applying for a business permit could be done from the comfort of your own home?  Recent research conducted by Deloitte showed that use of in-person government services halved across APAC nations in the last two years, and 77 per cent of citizens now primarily use a digital platform to access government services.  Likewise, Boston Consulting Group found that Gulf Cooperation Council governments in particular have excelled at digital service offering and adoption in recent years, with an average adoption rate of 61.3 percent – more than 30 percent above the global average. Globally, millions of people have shifted their behavior – and they are not shifting back.
  • After reopening, a hybrid model of digital and in-person offerings was often welcomed by both governments and citizens.  As governments have been able to re-open their offices, we have seen that many citizens and businesses have been taking advantage of having the choice of both digital and in-person channels for getting services from the government.  For example, they may choose to do a business registration in person in order to be able to ask questions or get guidance about complex business questions, while making simpler, recurring transactions (such as paying quarterly business taxes) online.  Likewise, having a hybrid model has allowed the government to select when and how to push citizens and businesses toward each channel based on the government’s needs.  A straightforward driver’s license renewal could now be done online with basic validation techniques, whereas a more thorough exam and test for a new license may have to be done in person.
  • Access to safe, secure digital payments is critical to enable this transition to digital.  The governments that were most successful in continuing to serve their citizens through digital channels were those that were enabled to accept digital payments at the point of check-out – allowing the individual or business to do a registration, share their information, and pay for the service all at one time rather than filling out forms online and mailing a payment separately.  The more governments continue to shift toward digital services, the more they will need to accept various modes of digital payments.  At the same time, it will be crucial from an equity and inclusion perspective to equip citizens and businesses with digital payment tools. Digitizing person-to-government payments can reduce administrative costs, enhance transparency, and increase government revenues by expanding the collection base.  For example, when Cambodia’s Ministry of Public Works and Transport (MPWT) introduced mobile money as a form of payment, they saw a growth in revenue from 60 billion riel ($14.8 million) in 2017 to 150 billion riel ($37 million) in 2019[1].
  • Digital identity creation and verification is a crucial tool to help governments reduce fraud and provide efficient services.  One of the largest concerns with shifting toward online channels is the potential for fraud.  How can we tell if a small business is indeed what they are purported to be if we can’t visit their storefront in person?  How do we know if a citizen requesting a passport is indeed who they say they are?  Some governments drastically increased their investments in tools to enable digital identification during the pandemic, and those investments have helped them make leaps and strides in serving their citizens and businesses online.  For example, to reduce fraud some governments such as Singapore have created a single digital ID for businesses to be used across agencies, minimizing the potential for fraud while maximizing ease and efficiency in serving legitimate businesses[2].
  • Cybersecurity for governments has become increasingly more important and demanded by citizens and businesses.  As individuals and businesses began to share more private information through computers and mobile phones, rather than on paper, they have demanded that this information be treated with the highest levels of security. This is all the more relevant when we consider that cybercrime has traditionally increased in times of flux, such as economic downturns, and cyber incidents and crimes rise when there is a shift in technology.[3] Reports of identity theft in the U.S. more than doubled between 2019 and 2020, to 1.4 million, according to the Federal Trade Commission. Cybersecurity is no longer a nice-to-have, but rather a key building block for any digital government infrastructure.

In short, the past few years have been exciting, challenging, and constantly surprising as governments and their stakeholders made the transition toward digital channels to serve their citizens and businesses.  Will we take our future driver’s license tests in the Metaverse?  Maybe.  But what we know for sure is that the shift toward digitization is here to stay – and the most successful governments will be those that take the lessons from the pandemic in the design and implementation of future services.



Olga LaBelle, Vice President for Government Engagement at Mastercard

Olga LaBelle leads the strategy and operations work for the Government Engagement team at Mastercard. In this role, she identifies opportunities for Mastercard to partner with the public sector on key strategic topics – including financial inclusion, economic development, supporting small and medium enterprises, and supporting economic recovery of key sectors like tourism.

Before joining Mastercard, Olga was at Boston Consulting Group, where she focused on public sector, social impact, and education. She helped develop the topic of Total Societal Impact, helping corporations use social and environmental needs as a lens for strategic growth and long-term competitive advantage.

Olga has a BA in Political Science from Yale University, an MBA from Harvard Business School, and a Master in Public Policy from Harvard Kennedy School of Government.