Payment Technology Enables Economic Continuity

ECI blog Payment Tech Enables Economic Continuity

In recent months, COVID-19 has forced us to rethink how we do just about everything. Whether it’s work, leisure, going to school, or simply getting groceries, we’ve become a culture preoccupied with surface sensitization, handwashing, protective clothing, and maintaining generous distances from one another. Combined with store closures and shelter-at-home mandates, we’ve been forced to adjust to a "new normal" while also having to figure out what exactly that means.

This has been particularly true for the payments industry where our new normal has shifted away from physically presenting cards for brick-and-mortar shopping and given rise to a much higher volume of online transactions across industries. We’re also seeing a rise in consumer adoption of new types of e-commerce services such as grocery and food delivery which, experts believe, will set trends long after the crisis ends.

Where card present still exists, we also see an increase in contactless payments as an alternative to handling cash or touching card readers. The bottom line is that our need for goods and services has not gone away, we’re simply adjusting to how we get them…and how we pay for them.

If we think about the overall impact of the Coronavirus across our personal and professional lives, a high point has to be the prevalence of ubiquitous infrastructure that has not only kept us connected and informed but – with the addition of ecommerce and payment innovation – has also helped us maintain economic continuity throughout the crisis.

So, what are the specifics? While not comprehensive, the following expands on the examples noted above, shares a few more insights collected from around the web, and provides some additional cases that we’re seeing at NET1™ and how NET1 has engaged.

A shift to online shopping

This should be no surprise to anyone as consumers and businesses alike are turning to online alternatives where local suppliers may be unavailable or unaccessible. As an example, Geekwire® reported in early April that the pandemic had created an “inflection point” for online grocery shopping. The study also suggested that this behavior may lead to new habitual online shopping well after the epidemic subsides. The report shared that Amazon® continued to dominate in overall ecommerce while WalMart® and Target® also experienced significant spikes in sales.

Contactless on the rise

In addition to online shopping, contactless payment usage has increased. According to a CNBC® on April 29, Mastercard® reported a 40% increase in contactless usage during their first quarter that included tap and mobile payments. The report, quoting MasterCard CEO, Ajay Banga, noted that consumers were “looking for a quick way to get in and out of stores without exchanging cash, touching terminals, or anything else.” Visa® saw similar results due to the pandemic, as posted by online journal, Retail Customer Experience . Overall contactless utilization was up 150%, since March of 2019, with 31 million consumers using contactless cards or digital wallets to pay for goods and services.

Specific to the U.S., the pandemic may be the catalyst needed to drive longer term adoption of mobile payments, according to the report. Historically, the U.S. market has maintained its preference for cards with a mobile adoption rate at about 10% which is far below global averages.

Our Perspective

As a leading provider of integrated payments with our ERP solutions, at NET1 we’ve seen the impact COVID-19 had placed on our economy. Without a doubt, after employee safety, business continuity was, and is, the primary focus for our partners and clients across all industries. As businesses closed due to government mandates, organizations looked to e-invoicing, electronic billing, and online payments as a means of enabling revenue assurance. In many cases, ECI’s payment processing technology, NET1, was already in place, helping our customers transition quickly to the new COVID-era business conditions.

Damien Brock

About the Author

Damien Brock has more than 16 years’ experience in Point-of-Sale and joined ECI's preferred payment processing solution, NET1 as Senior Product Manager in 2019. In his role, Damien manages NET1's payment integrations, new product launches and internal product training. Married for 12 years, Damien lives in North Richland Hills, TX and has a 23 year-old son. He enjoys spending time with his family, theology and drumming.