According to a recent study by Mastercard, about 82% of small businesses in North America changed the way to make and receive payments since the pandemic.
Well, as staggering as it may sound, the pandemic is to be thankful for many things. And innovative payment solutions are just one of the many changes it brought.
Though digital payments pre-existed before the pandemic struck, businesses are embracing it now more than ever.
But, what exactly are these changes coming around in the payments industry?
Keep reading to find the answer.
Need for Faster Processing
The user experience is central to any form of banking or payment system. And today's user has no time to wait for a payments page to load. Reports suggest that nearly 91% of small business owners seek high-speed payment solutions. This is one of the reasons why small businesses are already embracing digital payment methods.
Need to Build Ecosystem-Based Business Models
Business owners are not alone in upgrading their payment technologies. As the experts at HPS-Worldwide explain, banks are also recognizing the need to prioritize modernization. Adding to it, the experts say that COVID-19 has impacted everyone within the payments ecosystem. Nearly 7 in every 10 banking institutes say that ignoring digitalization would mean losing existing customers. Implementing a secure yet straightforward many user interface is not an option anymore. Indeed, with the ongoing pandemic, touchless payment solutions are also becoming more popular.
Demand for Automation in B2B Payments
Most B2B transactions involve some sort of guarantee or collateral. The pandemic has also affected the payment modes for B2B transactions, as cash payments are no longer possible. On the other hand, electronic transfers are instant. However, they eliminate the possibility of placing collateral for the payee. Leading bankers quote that more and more merchants are seeking automated transfers. The payments would be released upon receipt of goods or services. And therefore, ensure transparency as well as security of the funds.
Increased Focus on Operational Efficiency
From initiation to receipt and acknowledgment, the payment value chain involves a lot of steps. Ignoring any of the steps could easily hamper user experience and ultimately cost any payments sector company to lose its clients. Experts believe that digitalization has increased more focus around the end-to-end payment supply chain. The payee, receiver, and the bank involved can easily track and confirm any and all of their payments.
Regulatory Push for Data Exchange
Apart from the user demands and modernization needs, the regulatory push is also one of the reasons behind this digitalization of payment solutions. Governments are now forcing more security and safety for personal data. Besides, there are now stringent rules for exchanging user data between any parties. Unless or until the information is legally required, it should not be shared. And digital payments are indeed helping ensure this regulatory push.
In times of need, digital acceptance of payment methods should come as no surprise. When most of the world was busy fighting against CoronaVirus, economies thrived on finding new ways of survival. After all, the pandemic has claimed not only human lives but also toppled the global economy.