As we move towards the end of May, it’s time for the ‘View of the Editor’ on Payment Expert. For the first of this series, brought to you in the last week of every month, it’s hard to focus on anything other than COVID-19 and its unprecedented economic impact across all markets.
As the world continues to navigate through one of the most distressing periods in recent times, the payment sector’s role in society has taken on heightened importance.
Innovation is always at the forefront of the industry. It’s crucial now that the focus on innovative growth is magnified and payment companies place more attention on ensuring the maximum efficiency and safety of day-to-day transactions.
Halting the spread of bacteria by further embracing contactless payments has been key. In the UK, the contactless limit has been increased from £30 to £45, whilst a myriad of other tech has progressed globally in a bid to expand the boundaries of a cashless society.
However, coronavirus analysis indicates that societies most vulnerable to being impacted by the virus are also those most susceptible to the economic hardships of the pandemic.
Therefore, as payment technologies develop, ‘financial inclusion’ must be placed as a foremost priority in the progress of the industry and its benefit towards healing a fractured society.
Ensuring innovations are inclusive of all demographics is of the utmost moral importance. The path to economic recovery following the current crisis will be marked with new technology and significant collaborations, but it is crucial that everyone in society can walk that same path.
Fintechs may well have a role to play when it comes to bridging the gap between those in society more reluctant or less capable of engaging with digital payments. Providing greater tools for education and simpler ways for users to dip their toes into the water of the digital ecosystem.
Further affirming the importance of the future of fintech, the UK government took the significant safeguarding measure of opening applications for ‘the future fund’.
It comes as Rishi Sunak continues to unveil measures in a bid to ease the overall economic impact caused by COVID-19. It seeks to focus on some of the country’s most promising start-up companies and will be seen as substantial support for the thriving fintech sector.
Furthermore, the embracing of contactless payments also transcends to SME businesses, as they maximise every asset at their disposal in a bid to retain some degree of financial stability.
In a recent study by NatWest, it was revealed that in the two months since the UK lockdown commenced, 70% of businesses registering for the bank’s Tyl by NatWest payment service are new to card payments.
It gives a clear inclination that the trend away from businesses accepting cash and coin payments has accelerated as a result of COVID-19. Meanwhile, it also revealed that global trends show a 300% increase in online searches for the term ‘contactless payment’ over the last two months, based on data from Google.
A next step on the ladder to recovery for many smaller businesses in the UK may well involve greater adoption of open banking, as they become beneficiaries of the burgeoning tech in the same way consumers have since its formation.
The expanded use of data provides financial flexibility that can be capitalised during immensely challenging times, as well as when ecommerce and global economies possibly experience a bounce-back of activity following the pandemic.
Enhancing the knowledge and awareness around open banking, dissecting some of its complexities may well be pivotal in bringing more SME businesses to the table. The safe opening up of data, through open banking, can allow SMEs to gain greater value in their financial partnerships.
For the betting and gaming retail sector, the accelerated adoption of contactless payments presents a far trickier challenge. With the vast majority of staff furloughed there will be an undeniable desire to reopen shops, however, the industry should be tentative about implemented methods of payment that reduce security barriers.
AML and security measures in betting shops, specifically in high-risk areas, have always had to be intensified compared to other sectors. Whilst contactless payments have obvious benefits in terms of efficiency and halting the spread of bacteria, they do also present an added challenge when it comes to fraudulent behaviour.
As much as a highly competitive marketplace has led to some of the most important developments in modern times, it’s very much time for collaboration to take the front seat. Whether it be in terms of technology or overcoming regulatory hurdles, a payments industry working in tandem could be at the heart of the economic recovery from this crisis.