It’s crazy times for retailers and merchants indeed, among others. Customers are staying home, everyone’s eschewing cash, and people prefer to pay with their smartphones because touching a terminal could pose a health risk.
The recent coronavirus pandemic is shaking up commerce and swiftly changing the ways people buy and sell.
Here are some payment trends we’ve observed lately, what we think will happen next, and a few ways on how you can ready your business for new shopping habits in a post-coronavirus world.
Store-based retailers are leaning on e-commerce to ride the recent surge in online buying
Globally, retail foot traffic has sharply decreased rapidly as more stringent health and safety laws came into place. According to live data from Purple, footfall in EMEA fell 22.73% week on week from mid-March to mid-April 2020.
And with the drop in shop visits, e-commerce sales then soared:
- McKinsey & Co estimates that e-commerce transactions have soared 81% in Italy since the end of February.
- A Kantar study covering Europe’s three largest e-commerce markets (France, Germany and the UK) showed that the number of consumers who do more than half of their shopping online has increased up to 80% since COVID-19 outbreak.
This surge in online buying boded well for web-based brands, but proved to be even more of a boon for businesses that accept payments online as well as on physical point-of-sale (POS) terminals.
During the fortnight of March 22 through April 4, primarily store-based retailers in West and Central Europe saw a 71% year on year increase in their online sales, compared to web-only retailers in the same region (44% increase).
Merchants that accept online payments cater to a growing number of housebound shoppers who purchase everything from groceries to movies digitally today. So if your business is solely relying on in-store transactions, now is the time to explore how you can get paid online.
Plus, there’s the growing perception that...
Cash isn't desirable right now
Even before the coronavirus outbreak, studies showed that banknotes can carry potentially harmful bacteria microbes. And while it hasn’t been proven that the COVID-19 virus can be spread via money-handling, using cash has become a global public health concern today.
Precautions are high enough that central banks are treating cash carefully. The US Federal Reserve for example, is holding dollars received from Asia for
up to 10 days before putting them back into circulation, while European authorities are encouraging cashless payments.
Contactless payments are the way to go
Contactless payments reign supreme in a world where strict health regulations call for people to avoid physical interaction. Digital wallets and tap-and-go POS technology are quicker than card chip and PIN payments, and require less physical interaction when a customer is purchasing over the counter too.
To further encourage the ‘no-touch’ payments journey in-store, the EU’s financial institutions and governing bodies are adopting temporary measures to make buying much easier.
- The UK’s banks are raising the PIN-free contactless limit from £30 to £45 as case usage in Britain drops. Dutch banks have raised the limit for contactless payments with a debit card, from €50 to €100.
- Many other banks in the region, in Belgium for example, are also temporarily raising limits that require a PIN entry.
The new normal post-coronavirus
Of course at some point, we expect that the COVID-19 crisis will cease and that things can go back to normal. But what is normal anymore? The new consumer habits we develop now in the name of health and social distancing could mean a very different way of life later on.
As businesses regain their footing and adjust to a post-coronavirus world, you can bet that some things are going to change, possibly permanently. Here are some shifts we see happening in the coming months.
The E-commerce is likely to boom globally as more business move payments online
It’s likely that people who have discovered the benefits of convenient, contactless online shopping (as a result of stay-home laws) will want to continue enjoying them. More businesses, if not all, will need to allow online payments in order to keep up.
Industries such as grocery and pharmaceuticals are gaining unstoppable momentum right now, and it’s only a matter of time before other sectors either follow in claiming a share of the online market, or fall behind.
There's going to be less resistant to digital change
When it comes to technology and other digital innovations of our time, most people have a healthy resistance to change. But the coronavirus pandemic has forced mindsets to shift.
As businesses put measures in place to equip and prepare themselves for future emergency situations and crises, technology will help fill the gaps that many are struggling with right now, in areas such as remote working, distanced customer service, contactless delivery and touchless transactions.
Mobile wallet use can only go up
Mobile payment technology has steadily risen in the past decade, with no signs of slowing down any time soon. In fact, the technology has already made its way to smartwatches, with widespread acceptance.
Applications on mobile devices are also an additional channel for merchants and financial institutions to connect with their customers.
Smart safes can improve cash management
Brick-and-mortar businesses looking to practice more hygienic cash management and safeguard themselves from future health risks will no doubt have to examine how cash is handled in-store, and by whom.
In this area, smart safes reduce the need to handle cash, and limit access to select individuals, which also allows for better traceability.
Top tips to keep your business in check
All signs point towards digital payments being the next big thing in business, so there’s really no time like the present to start getting real about your online revenue. If you haven’t already done so:
- Modify your business to allow customers to transact online: even if you start off with limited items for sale, you will at least be exposing your brand online and more importantly, making it accessible to the majority of shoppers today. You no longer have to just rely on in-store visits to get paid.
- Think about how your business can innovate for the future: as online and in-store payment technologies converge, customers are going to expect less physical interaction in their shopping experiences. Paper ticketing at public transport terminals may give way to open loop payments (where people can use their contactless credit or debit card to pay for travel fares), traditional payment terminals in carparks may cease completely in favour of parking apps. By integrating more online payment technologies in your customer journeys now, you can help prepare your business for what’s ahead.
- Consider offering subscriptions: these are goods or services that your customers pay for recurringly, but only authorize once in an initial transaction. It’s a nice way of securing future revenue with less barriers.
If there’s one thing we know, it’s that COVID-19 is staying for a little while longer. And if you’re struggling to make digital payments work better for you, we’d love to help.