The rumors of the second COVID-19 wave have been circling the market. With a significant number of vendors still battling the consequences of the first siege of the pandemic, keeping in mind what measures could mitigate the impact could be the difference between a ‘crash and burn’ and staying afloat. Here are 4 ways for the payments industry to withstand a potential second COVID-19 wave.
The expectations of the second spike in COVID-19 cases pose a unique risk to businesses both in physical space and on the Internet. The first lockdown posed quite a few challenges, however, it has also distinguished alternative options and niches that could be leveraged by the payments industry market players to remain competitive and retain traction in case of a second downturn.
Marius Galdikas, CEO at ConnectPay, has shared a few insights on how the payments industry could mitigate a crisis if such a need occurs.
Fintech Partnerships with Traditional Vendors
Even after the rapid growth of technology in the past decade, the fintech industry has only grabbed about $187 billion for the first half of 2019, or around 1% of global payments, with plenty of room for growth and disruption. As traditional businesses may struggle to adapt to second sudden shift in the market, striking up a conversation with the leaders in innovation could lead to timely solutions and prevent business slowdown.
“Fintech industry pivots and innovates faster, which could turn into a competitive advantage for business with the right payment provider. In times of crisis, such an advantage could make a difference against other market players,” stated Galdikas. “With more safeguards in place, businesses can benefit even more once the crisis abates,” he added.
The rigors of social distancing also put pressure on banks and payment processors in general, with the increased risks of phishing, scams, and other attempts to steal funds. Partnerships with fintech firms could help enhance security through a mix of trust and technological safeguards.
Leveraging delayed payment options
The potential to defer payments enables businesses to provide their customers with flexibility during this uncertain time while retaining some guarantee of the funds. “In economies shocked by lockdowns, the option for delayed payments may buy more time for businesses,” explained Mr Galdikas. “This can help establish trust between existing and future customers and allow vendors to maintain traction.”
Marius Galdikas also noted that being able to offer customers different fund transfer methods is just as important, hence their continued focus on expanding the product suite for merchants. “Having a wider range of payment options available will ultimately place vendors in a better position to serve their clients,” he added.
Facilitating contactless payments
Cashless and contactless payments have been soaring in popularity as fast and frictionless transactions became more valuable for physical businesses aiming to establish social distancing protocols. Mr Galdikas explained that facilitating smooth contactless payments is one of the vital aspects to keep in mind, especially in case of a second wave.
“No-contact payments gained newly-found importance in the context of the pandemic and will remain highly relevant, at least until the situation dials down. Some may not have been giving the proper attention to the subject before, but with the threat of a potential second wave, having certain measures in place to provide a smooth contactless experience is paramount.”
With lockdowns and physical businesses closed, purchases moved online. However, there are further challenges in establishing consumer and vendor relationships, such as ensuring a smooth customer journey, which could be improved by offering flexible payment solutions.
“Online merchants will have to offer faster and more secure solutions in these challenging times, to retain customers,” stated Galdikas. “Convenience is key, for both merchants, seeking to diversify payment options, and their customers, seeking flexibility and overall better shopping experience.”
“That’s why we aim to provide new payment templates during the COVID-19 crisis, and in the post-crisis industry as well,” he continued. “The current situation has exposed some of the shortcomings in the industry. Thus, this is as good a time as any to reflect upon them and innovate accordingly.”