COVID-19 and its current impact on payments.

May 11, 2020

Not only has COVID-19 proved itself to be a serious challenge to the health and wellbeing of people across the world, but it has also had a massive impact on the global economy. Almost all businesses have been affected by the Coronavirus outbreak in one way or another, with government-enforced self-isolation and the closing down of many shops, restaurants, cafes, and bars causing falls in sales for many businesses across various sectors.

The growth of eCommerce

The coronavirus has also caused a shift in the way people are purchasing goods, with many businesses being forced to switch to online sales as their sole or main income for the time being. The effects of COVID-19 could likely be long-lasting too, forcing businesses to rethink the way they operate and strengthen their online payment infrastructure. Therefore, there has never been a more important time for businesses to review how they exist and function online, with the rising presence of eCommerce making it a more competitive environment than before. Here are the benefits an eCommerce Payment Facilitator can play during and after COVID-19.

Taking the pressure off merchants

As a Payment Facilitator, you will be managing your merchants’ onboarding, settlement of funds, card network, Card Schemes rules, and regulations. Thereby, freeing merchants’ time to focus efforts on perfecting their online offering to customers.

Retaining greater control of processes

During this unprecedented time, it is important to retain control of internal processes, including pricing agreements for both for you and merchants. As the tide moves towards a more eCommerce-centric world of payments, pricing agreements need to be reflective of the current economic environment. Having multiple acquirers factored into the payment ecosystem makes this task challenging. A single acquirer agreement provides a simplified financial model for all parties.

Similarly, you are in complete control of the settlement of your merchants’ funds, ensuring they receive the money promptly – critical in these uncertain times.

Strengthening your online payment infrastructure

Having an adequate online payment infrastructure is an important part of running a business online. The opportunity to do business in person is temporarily on hold, therefore there has never been a better time to make sure that your merchants are using a payment structure that can cope with the additional demand. Considerations include making sure they can process payments via a variety of digital wallets and that merchants are trading in line with current regulations, such as PSD2.  As an eCommerce Payment Facilitator with a close relationship to your acquirer, you can ensure that these considerations are passed on to merchants.

Who should you partner with?

In terms of which acquirer is best, it is not a case of one-size-fits-all. All businesses are unique and therefore have different requirements. When considering which acquirer is best for your business, make sure to ask how they will help your merchants prepare for additional online demand and how they plan to align their service with your current business strategy.

Lessons to be learned…

Ultimately, businesses that take the necessary steps now to adapt to the current climate, have higher chances of survival in today’s economy and thriving once this is all over. Consumers are changing the way they shop and pay right now. It was the rise of online shopping in the early-2000s that eventually led to the demise of high street giants like Woolworths in 2009. Quite simply, there are lessons to be learned from recent history, so be sure to work with your merchants and apply these to the current business environment.