Covid-19 is impacting every area of society and commerce. We’re changing the way we work, spend, and do business. Every industry is being affected. Crucially, some of the changes made now will remain long after the pandemic has ended. The online payments industry is one sector where the impact is being felt more than others.
Less cash is more
Already, we’re seeing less use of cash for financial transactions and the greater adoption of digital technologies for even the smallest payments. Across Europe, countries are increasing the amount allowed for contactless payments. Without doubt, this habit is one that will continue after the current crisis ends. Even before the pandemic, the frequency of digital payments was rising year-on-year, as cash payments fell. More payments than ever are made using cards, contactless technology, smartphones and other devices.
Covid-19 has accelerated the adoption of these transactions – not just because people are staying at home (although this is another factor we’ll look at in the next section), but because it’s a safer form of payment requiring less physical interaction and less risk of contagion.
Digital checkout sales are growing
One of the main reasons cash use has halved in the UK is as a result of the lockdown. Many retailers have locked their doors, but many too have begun selling exclusively online – some, for the first time. Online payments and e-transactions are surging as more people shop online for essentials that they previously bought in physical stores.
All this is happening despite a complete fall off in hotel and flight bookings, most of which are, today, purchased via online transactions. When travel does begin again, this will be an added stream of online payments. Meanwhile, most refunds for cancelled bookings will have to be made online.
State authorities are helping by actively encouraging online shopping. In turn, this is giving a welcome boost to the Internet of Things (IoT). The more people use these technologies, the more they’re likely to keep the habit, especially when it comes to essentials such as groceries. After all, online payments are even safer than contactless payments; they don’t require touchpoints.
Online payments are becoming more versatile
The way online payments are made is evolving faster because of the pandemic. As customers are more willing to use new online payment systems, traditional banking transactions and recurring card payments are being replaced by solutions that offer more versatility to customers and businesses alike. These new payment systems come with added tools for greater control over functionality and service offerings, as well as offering useful dashboard and reporting features for businesses.
More security, less fraud
Unfortunately, crises such as Covid-19 create opportunities for criminals. Online payment systems are already much more secure than physical payments and that security is improving all the time. New technologies such as Blockchain, Artificial Intelligence (AI) and Machine Learning can make a big difference to identifying potential fraud and preventing it before it happens. As a result of the pandemic, these new solutions are already being fast-tracked to make online payment systems safer and more attractive to customers and businesses.
Customer behaviour will drive the online payment industry
Ultimately, it will be the customer that will drive the growth of online payment sector. As businesses see customers making more online payments, the best will want to make those payments as easy as possible for customers. Traditional payment providers will have to fast track their own efforts to keep up.
Astute business owners and entrepreneurs know that the technology is already there with the likes of KoalaPays. Those that integrate those solutions into their payment systems will benefit most, now and in the years to come.
All of these developments in the online payment industry are making it easier to buy, sell and do business. And because of the increased uptake, companies are realising the benefits in terms of quicker transactions, lower fees, greater security and more flexible collection options.
The pandemic has inevitably meant a huge rise in online and digital payments, but this is not a temporary thing. This is one that is set to continue well into the future. Businesses that do not adapt, evolve and invest in digital payment solutions will be left behind. Those that do, will thrive. After all, it will be online payment industry and the technology behind it that will drive the recovery in the aftermath of this pandemic.
Cash is no longer king. Online payments are here to stay.