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How The Novel Coronavirus is Impacting Payment Trends?

Monday, August 31st, 2020

No doubt, the Coronavirus has disrupted our lifestyles and changed how we do many things.

For instance, the payment space has experienced sudden alterations like reduced cash usage and growth in eCommerce shopping.

For instance, surveys show 40 percent of customers say moving forward, they will buy items online more than they do instore. Shopping habits have also changed significantly; 38 percent of shoppers will use a food delivery or grocery service or order upfront for pickup

The question now is whether these changes are temporary, or some will stick with customers and become habits post-pandemic.

With clients starting to settle into what may become their new normal, payment providers and banks must strive to keep up.

While the digital banking transformation was a pre-pandemic trend for both customers and banking institutions, the world health pandemic has boosted the adoption rates thanks to the unprecedented keep-distance restrictions.

Customers were also moving towards digital payment avenues, even pre-pandemic, with many consumers turning to mobile wallets per month. As Coronavirus keeps paralyzing activities, businesses must watch some payment trends moving forward.

Even with the easing of stay-indoor rules and reopening of distribution channels, banking institutions realize that just because consumers can now walk to physical branches does not mean they will.

Also, just because the virus is no longer spreading as it was in March, getting back to cash, PoS terminals, or checks may be a risk worth taking.

A FIS survey that involved 1,000 US consumers conducted on April 3-5 lends credence to the theory that Coronavirus will push some shopping, payment and banking trends into “new normal” even post-pandemic.

The following are some shopping and payment trends that may change permanently;

  • 40 percent of customers say they will buy items online more than instore
  • 38 percent of shoppers admit they will use a food delivery service or order upfront for pickup
  • 29 percent of consumers say they will use grocery store delivery or order upfront for pickup

The research also found changes in banking trends as follows;

  • Over 45 percent of the interviewees admit to having changed permanently how they connect with their bank since the global pandemic.
  • 31 percent of consumers say they will do more online and mobile bank moving forward
  • An entire 45% of customers have tried a mobile wallet transaction platform in the last 30 days.
  • There will be a significant drift away from banknotes and checks.

According to Mladen Vladic, a FIS executive, the COVID-19 effect has “sped up trends that we’ve seen for years in the digital banking and payment spaces.”

“As soon as customers start using new digital services that prove convenient, few will resume their old behavior, so we believe this will be the new normal,” Vladic explains.