According to the World Bank in its recent forecast, remittances will drop by a staggering 20% this year, affecting many developing countries, businesses and people. Experts and sources are expecting the worst in light of the COVID-19 pandemic.
As terms like social distancing grow in prominence and political landscapes across many nations change, sometimes drastically, negative consequences have quickly climbed the charts. But many inefficiencies are also being addressed as a direct result of COVID-19.
One such example is companies realising that working from home is more viable than before through the use of e-conference tools like Zoom. This may ultimately push companies towards this direction to lower operational costs.
In fintech, innovative payment solutions are being pushed forward as a necessity for a better economic rebound.
Massive fear of a weakened economy
The global economy is being threatened by repercussions of necessary lockdown efforts. Many industry leaders, workers and business owners are bracing for the impact of a serious recession.
This has led some of the world’s most prominent leaders to consider an easing of lockdown measures. Of course, this decision can come at the high cost of endangering public safety. It can also endanger people’s lives.
In the meantime, life has continued, and many lessons can be learned. Businesses still need to make a profit. Production of goods and the offering of services continue, albeit at a slowed pace. It is a trend seen across many industries right now. The slower business operations are, the slower revenue is generated for companies. Ultimately, this leads to slower economic recovery.
Speed is key to improved efficiency
If economic sluggishness has been identified as one of the crucial parts of this crisis, then it is probably safe to say that improved speed is a very real solution.
COVID-19 has brought about a reality check for financial institutions, corporations, small businesses and governments. Developing a thoroughly efficient infrastructure for faster payments, faster logistics, better security measures and seamless transactions has been taking some time. Progress was made along the way, but not enough to protect the consumers and businesses at a time when options are running thin.
This is where a growing demand for digital payments comes in. Businesses and individuals have a need for immediate access to funds. They also need to leverage various ways of moving funds across borders in order to provide basic necessities for day-to-day life and business continuity.
Borderless, contactless and seamless
A report by ACI recently showed how real-time payments were a top priority and were expected to surge over the next few years. It’s expected that many countries, including India, Malaysia, Finland and Belgium, will display strong growth related to this. If your company deals with cross-border payments, speed is a big deal.
With regards to faster payments, P2P money transfer services, global payment solutions offering seamless cross-border capabilities and mobile payment innovations are all garnering increased interest. Quick, contactless transactions via apps, complex systems, online banking platforms and digital wallets are increasingly common. What was once seen as a niche in the market is now being looked at as a necessity.
Progress through adversity
With regards to going “cashless”, China has been an exemplary leader for some time now. In its move towards a cashless society, digital maturity, as well as a strong infrastructure that enables faster mobile and online payments has been embraced. The country boasts about 800 million mobile phone users, with 86% of the population utilising e-Wallets for transactions of all kinds from clothes and food to transportation.
The initial benefits of a cashless movement are clear: convenience and speed for both merchants and customers. Physical cash is easy to lose, difficult to keep track of and in light of recent events even dangerous to an extent (considering the potential for bacteria and infection).
With online payment methods, businesses can enhance consumer experiences, integrate incentive programs into mobile payment applications and improve customer loyalty in innovative ways.
While the current COVID-19 pandemic has brought pandemonium to the economic landscape, it has also given rise to many new opportunities. With faster payment processing solutions, businesses and individuals can embrace the new normal to forge ahead.