Payment in the pandemic

Payment and the pandemic

The COVID-19 crisis has become an unimaginably heavy burden on the international population. The largest price paid in the pandemic, of course, is the loss of life in practically every country in the world. Global markets, supply chains, and the economy have suffered a blow that has been compared to the 2008 financial crisis. At both a personal and economic level, it is unlikely that we will emerge from this event unchanged.

Narrowing focus onto the payments industry, changes as a result of COVID-19, however, appear in a more positive light. Such unstable times are sure to make history, but the flexible and fast-moving nature of payment could allow us to adapt quickly to changing demands and even help reintroduce stability as soon as possible. Innovation in payment tech may offer a glimmer of optimism in an otherwise gloomy outlook for the global economy.

Adapting daily business

At checkouts in stores, we are already seeing evidence of COVID-19’s impact. As the focus on hygienic practices intensifies, supermarket checkouts, for example, are installing screens and frequently asking shoppers to pay by card rather than cash to speed up the checkout process and lessen the risk of infection. Contactless cards and smart wallet payments already take these benefits further, but there could also be an upswing in demand for scan, pay, go technology, including electronic shelf labels, to minimize interactions altogether. Payment without human interaction has long been on the cards, but is certain to pick up pace and favor in the wake of COVID-19.

Local businesses are moving online, at least as much as possible. A multitude of small and medium-sized stores on main street, who require our support most, have been able to adapt operations to keep business running. Many are setting up shop in the e-commerce world, offering prepaid gift cards and vouchers for the future or allowing customers to pre-order services. All of which benefit from the support of user-friendly payment technology.

In many countries, restaurant takeaways continue, increasing demand for fast and convenient payment acceptance and systems for ordering online. Neighborhood stores and marketplaces were already heading toward mobile POS devices to combat the shift to cashless payment. But uptake could increase pace with vendors looking to get started quickly or broaden payment options to keep up with fiercened competition.

Changing individual habits

Social selling could be a market to watch, particularly if restrictions on larger stores continue. As consumers turn to peer-to-peer selling to source goods, a potential rise in individuals using online payment methods such as PayPal to avoid contact with strangers could occur. Social selling platforms may even look to develop their own integrated payment options or in-app wallets for customer convenience.

As certain markets feel the crush of COVID-19, individual consumer spending habits are changing. Klarna, the Swedish payment solutions provider, recently expressed a noticeable change not only in what consumers are purchasing (roughly summarized: less clothing, more health products) but also increased demand for personal financing. This is perhaps not surprising as unemployment and lack of job security lead consumers to feel the pinch.

Social distancing is driving change—and the payment industry is responding

With the entire global population mostly living, working, and socializing at a distance, the importance of digital technology has never been so clear. The way we shop, eat, order, travel, communicate, and interact has drastically changed for the long term—and the way we pay needs to respond. Fortunately, the flexibility, diversity, and connectivity of digital payment technology offers optimism to consumers, suppliers, and merchants at this time in the form of innovation.