Cash & Liquidity ManagementPayments3 payments lessons as firms aim to emerge from crisis

3 payments lessons as firms aim to emerge from crisis

The way we shop and pay has evolved beyond measure in the past five years, and it’s no surprise that coronavirus has accelerated that trend in the past five months. The payment industry has long been a hotbed of innovation and coronavirus has created an impetus for change as consumer preferences shift and businesses adapt to the ‘new normal’.

  1. An increased need for contactless options

The need for payment options which minimise human contact due to coronavirus is already well-established. Despite the World Health Organisation advising that banknotes aren’t proven to transmit coronavirus, consumers, mindful of the hygiene precautions required as part of government guidelines, continue to show a preference for contactless options.

Recent Tyl research found that UK SMEs are moving to accept card and contactless payments at an increasingly rapid rate in light of the coronavirus crisis. In the first two months following ‘lockdown’ in the UK, 70 percent of businesses registering for the bank’s Tyl by NatWest payment service were new to card payments. A recent BBC study reported that 76 percent of people responded to a survey stating that they expect to use cash less and move to digital payment options.

What does this mean for business?

Businesses need to acquire the capability to meet the demand for contactless options efficiently. Exploring the options, understanding the market and speaking to a banking advisor should be considered high priority. This should be viewed as an exciting opportunity to introduce new systems and build for future growth as this becomes the consumer expectation.

Further, business should consider the potential impacts on customer loyalty when introducing contactless payment systems. Payment interactions are a key driver of trust and loyalty from local newsagents to large multinationals. Moving from face-to-face to digital environments presents challenges to building relationships with customers. Consulting payment providers for advice, looking at ways to integrate loyalty reward schemes into online payment processes or offering more flexible terms are all useful places to start when undertaking efforts to develop and establish strong customer relationships,

  1. Meeting multichannel demands

Contactless payment systems cover much more than simply tapping a card machine. Consumers are making payments in an increasing variety of ways as coronavirus condenses and accelerates years’ worth of innovation into a matter of months.

E-commerce enabled by mobile payments, digital wallets, wearables, voice activated systems and biometrics to name just a few channels looks set to continue as a primary source of economic activity for the foreseeable future.

A recent Kantar study covering Europe’s three largest-ecommerce markets, (UK, France, and Germany), reported that 32 percent of households had increased their e-commerce spend during the pandemic with a further 33 percent believing their future online purchases will increase.

What does this mean for business?

SMEs must ensure they are built to meet their customers in the digital environments they inhabit, taking payments in a variety of ways without disparities in convenience, service, speed and security.

Consumers form their views of a brand across more touchpoints than ever before. SMEs should consider the payment journey each customer must go on with their business. A consequence of the rise in e-commerce and the adaptation of businesses reacting to pandemic conditions means that consumers with limited online experience prior to the pandemic are now shopping in digital and mobile environments for the first time.

Keep things simple; businesses with a website should consider ways to simplify and optimise the layout to drive conversions. Similarly, a review of any social media channels could be implemented to analyse whether they communicate the intended brand identity and whether they make it easy for potential customers to view the goods and services on offer. SMEs should also ensure that payment environments such as the online ‘shopping basket’ are user-friendly and optimised for mobile.

  1. Fraud prevention

Fraudulent activity and cybercrime are on the rise. A report from Google announced that it currently blocks more than 18 million coronavirus-related scam emails every single day.

As digital payments increase, so does the volume of account information stored. This makes payment platforms a more prominent target for fraudsters than ever before. Phishing attacks, account takeover attempts and ransomware are all forms of attack being directed at businesses across all sectors.

What does this mean for business?

Increasing the level of security awareness amongst SMEs is crucial. With workforces operating from home on different networks, often without the standard of security protection provided by office-based systems, holding frequent conversations regarding security threats is paramount. Where possible, those with the responsibility for security should share examples of malicious activity and how to spot the signs. In the case of ransomware, a re-evaluation of data back-up procedures might be necessary as well as storing files separately from the main network and conducting routine security updates.

Finally, SMEs should consider their outgoing communications and identify who will hold responsibility for issuing communications to customers. Making sure customers know exactly how a brand will communicate with them and what official correspondence will look like will help your customers to protect themselves from fraudulent imitation attempts.

Mike Elliff is the CEO of Tyl by NatWest

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