How COVID-19 Has Accelerated Online Payments Acceptance Globally
Social distancing has become the new normal these days. The COVID-19 pandemic has directly affected every single human, regardless of the country, region, status, or power. Each industry and market has been hit directly with the ongoing pandemic. But, in this competitive and digital world, business activities cannot literally come to a complete pause. Because do you know the extreme? Such halt will directly push economies towards collapsing if continued for uncertain long duration. While for every problem there is a door of solution open, here as well, businesses can presume activities with physical distancing with online payments and E-invoicing to keep everyone safe, yet active.
Digital payments have been growing ever since the use of smartphones have grown. A report published by Statista has predicted that sum of transactions through overall digital medium will reach USD 4,769,370m by the end of the year 2020 and later a YoY increase of over 15% is expected to be witnessed. It won’t be unfair to say that the global spread of the novel Coronavirus will act as a catalyst to shuffle numbers to greater highs.
Let us now understand the role of COVID-19 in accelerating the inclination towards acceptance of digital/online payments throughout the globe.
Coronavirus Outbreak’s Impact on Industry and Market
The sudden outbreak of the Coronavirus pandemic has brought the entire world to a shocking uncertain standstill. The completely ruptured demand and sudden halt has brought a significant impact on the manufacturing sector as a result of consumer behavior. As almost one-third of the world’s population is, right now, locked at home, their behaviors have changed.
Not just consumer behavior, but the sudden lock down has also compelled companies to either have a complete shutdown or work from home (whichever is possible) till the next possible situation to bring life back to normal.
As we are all aware that the coronavirus is here to stay and neither in the sight of the near future we will witness its complete disappearance. The side-effect are not limited to a list, but every business, every sector, irrespective of any boundaries is expected to witness the hard-hit. While many startups and SMEs are expected to vanish, economies are expected to go through major recession than what we are already experiencing as first-hand experience of lock down.
But, in this current scenario, it will be interesting to see how the adoption rate of digital payments will rise.
Factors Accelerating Digital Payments Solution Acceptance
Cash Will Significantly Lose its Value
With Coronavirus expected to stay on surfaces for more than 9 hours, currencies are expected to be a lethal carrier of the virus. Countries like USA, Canada amongst others have found their own way of dealing with it. From the major foreign exchange being reserved for more than 24 hours before circulating it back into the economy to washing currency notes in the laundry (Canadian Currency is Plastic Based Paper), every country has devised its own measures. But, Majorly every economy is supporting online payments to help suppress outbreak to some extent, even minor.
Also, with the ongoing situation, there is a steep rise in the number of downloads for online grocery stores with 160% to 218%. Walmart Grocery and Instacart download numbers indicate the truth to the world.
Moreso, just like any other sector even banks are working with a minimal amount of employees. Thus, retailers and SMBs are finding it difficult to deposit cash. Therefore, the shift to receive payments online eradicate the chances of transmission or even thefts.
With the increasing use of smartphones, more than 38% of consumers are preferring to opt for online invoice payment system globally. Another study reveals that yet alone in Germany, post the COVID-19 outbreak, the download percentage has risen to fifty per cent from 35 per cent. Such instances are seen worldwide and followed in other countries as well.
Online payments are contactless payments and do not need physical intervention, apart from being secure and transparent. There are multiple factors people opt for online transactions over physical currency exchange.
Significant Increase in the Demand of E-Commerce after the Outspread of Pandemic
Being locked in houses people are opting for online shopping. Every E-commerce store that promises to deliver in time with contactless delivery is preferred by people. Even in countries with partial or no lockdown people are avoiding going out for shopping, rather staying in as a measure of social distancing to break the chain of the spread of the virus.
Many retailers are more actively working to serve their online clients and others are trying to get their software developed to follow.
As a result of COVID-19, the practice to receive payments online has gone up by 28% in march for businesses in essential commodities. However, many other items such as apparels, accessories, gadgets, automobiles, etc have made their shift to luxury goods and consumer behavior has changed towards them. Travel, tourism, and hospitality industries are shaking and at a complete halt because of travel bans across the globe.
More Extensive Perspective
The Coronavirus isn’t ending soon, we have already discussed this. And, it will eventually affect the lifestyle of every individual directly. There is a subsequent increase in the numbers of transactions online. But, it is important to understand here, that currently only essential commodities are in demand and purchasing power has certainly dropped with a sudden shocking recession. But, as soon as the life will get back to some extent of normal, with the ongoing changed behaviors, it is expected to witness the rise in the volume of digital/online payments
What are enterprises expected to do?
Till 2019, the adoption of digital payment mediums was a choice. But, with current situations in 2020, the entire outlook towards digital payments has changed. Consumers have inclined towards it more, irrespective of the business type, sector, or category. Online payments will soon claim its throne over cash transactions. Therefore businesses should prepare themselves to completely digitize their invoicing and payments process by setting up automated solutions to send online invoices and receive payments online with least human intervention.
Invoicing software will now play a major role than ever to help businesses curb the needs of digitization. While accepting the technology will take time but, automation with customized solutions can accelerate the entire invoicing and payments process to help businesses benefit from the overall process efficiency.
Just like you, I want the Coronavirus pandemic to end soon too. But, remember changed human behavior will change the entire purchasing trends.
Don’t forget, some advises are advisories. They should not be neglected.