Post-pandemic Payments

The pandemic has already impacted many industries, lives and livelihoods and accelerated shifts that had already begun to emerge. In the first half of 2020, consumers spent USD347bn online with US retailers, up 30% from the same period in 2019. In Europe, geographic and demographic differences in shopping behaviour reduced as many consumers (in particular, more mature shoppers) moved to online shopping – some for the first time.

Where does this leave the payments industry? For those ready for it, the reduction in cash and increase in contactless in bricks and mortar shops as well as the increase in ecommerce means opportunities to grow – but only by delighting customers and meeting or exceeding their changing expectations. In contrast, the road ahead will be more challenging for payment firms whose proposition isn’t frictionless, seamless and melting invisibly into the background.

What do winning payment propositions look like post-pandemic?  It depends who you’re serving.

For Payment Service Providers (PSPs) with large merchants serving customers in-store and online, the proposition needs to enable a smooth omni-channel and omni-device experience for customers as well as CRM tools and features to enable merchants to build customer loyalty.

For Paytech companies focusing on online only businesses, the emphasis must be on digital and in-app payments – ensuring customers are able to pay using their payment method (e.g. wallet) of choice. These online businesses will also seek paytech providers that enable them to improve conversion, reduce churn and reduce abandoned carts. In addition, businesses are increasingly looking for paytech firms that can support them in providing and using data analytics to drive greater revenue and insights to enhance their offering.

For Paytech companies servicing payroll firms the proposition requires fast, efficient payment methods. In addition, technology that eliminates the time required to manually upload files and check for duplicates and payment rejections can create significant efficiencies as well as reduce the potential for fraud.

 Regardless of who you’re serving, compliance, security and fraud prevention remain must-haves rather than nice to haves.

For payment companies focused on online businesses, the future is bright.

Note: (1) The 2020 McKinsey Global Payments Report