10 ways COVID-19 is impacting payments
10.06.2020Company: ACCENTURE CENTRAL EUROPE B.V., organizační složka
The potential impact of COVID-19 is becoming clearer and most firms are now in full business continuity mode. The banking industry’s market value has already taken as big a hit as it did in the 2008 crisis, but the industry is in a much stronger starting position to weather the storm. Banks are well capitalized, with far higher loss absorption capacity. Central banks are intervening proactively to support credit markets to prevent a repeat of the liquidity domino effect of 2008. Payment systems are functioning well and are considered an essential service not subject to shutdown.
We have identified 10 impacts which COVID-19 is likely to have on the payments industry, and which we believe will influence payments providers’ actions today and tomorrow:
The three largest markets—China, Europe and North America—have been most affected by COVID-19.
Consumer spending, the major driver of consumer payments revenues, has slowed dramatically.
Payments providers are finding ways to stimulate recovery by helping preserve customers’ liquidity.
Payments firms will reprioritize—reduce costs and shift innovation investment—in the wake of compressed revenues.
A significantly smaller proportion of payments are being made in-person as isolation keeps customers at home.
Expect an increase in the usage of tokenized payments instruments.
Customers—and by extension, payments companies themselves—are likely to face increased risk.
Customers’ need to manage cashflows more tightly may encourage adoption of payments experiences focused on control.
Limited in-person purchasing of essentials and food could drive ‘embedded’ payments to become the norm.
New use cases for blockchain and crypto-currencies are likely to emerge.
7 things payment providers can do now
Payments organizations should act urgently to moderate these impacts for their customers, their people, their partners and their businesses.
01
Establish a full ‘war room’ that coordinates all aspects of the crisis response.
02
Actively look to support customers and businesses as they weather the storm.
03
Investigate resilience of payment operations and ensure processing remains intact, with a skeleton crew in place and remote tooling.
04
Protect customers through proactive advice to counter fraud.
05
Find ways to increase liquidity in the economy, such as deploying emergency access to cash solutions, making available simple e-commerce payment platforms to SMEs and businesses, and helping governments disburse aid.
06
Rethink short-term priorities and reallocate staff and expenses to short-term needs.
07
Communicate the intention early to support customers, and then work through the operational details.
What's on the horizon?
The focus of payments providers’ actions will necessarily be short term, but many of the measures they take now will lay a foundation for future sustainability and growth.
We hope our deep dive into the implications of the crisis provides some nuggets of insight. As your business partner, we stand ready to provide whatever support you may need.
Find out more on:
https://www.accenture.com/cz-en
Tags: Finance |
