As we take a moment to reflect on a difficult year, it’s time to turn the challenges we currently face into new opportunities for 2021. 2020 was a tough year and as a result, brought upon many new changes in consumer habits especially around payments. Due to lockdowns and restrictions, many are doing remote work, shopping online, and switching from cash payments to digital payments.
Economic shocks like the coronavirus pandemic of 2020 only arrive once every few generations, and they bring about permanent and far-reaching change. These changes can range from social economic challenges to new ways of conducting business, what follows is an overview of some of the transformations we have seen in the payments industry over the past year.
One view that’s been repeated over and over is that the pandemic accelerated existing trends, including the adoption of digital payments.
Consumers are Using Less Cash
As contactless and digital forms of payment are becoming the new standard, cash and cheque processes are being left behind. New more modern digital technologies, like Interac® Bulk Transfers, Digital Wallets, and white label Prepaid cards are being used more and more as a better solution for delivering funds for a wide variety of needs.
According to a study by Ipsos Reid, from 2014-2019, cash usage declined by 4% – that is a 4% decrease over the course of five years. In comparison, 2020 saw an 8% decline in cash usage in just the first six months. The study also points to a shift in not just what people use to pay, but also how they pay. In an effort to avoid touching unsanitary keypads and to shop at stores that stopped accepting cash, Canadians desire for contactless payment increased. And it’s not just a traditional tap. Of the 85% of Canadians who own a smartphone, 4 in 10 have used their phone to make a purchase in the past six months.
At TruCash, we’re at the forefront of these trends, creating new digital solutions to help our clients reduce their reliance on cash, with innovative and flexible solutions that reduce administration and provide safer access to funds, whether in-store or online. Take advantage of new, innovative payment methods to help reduce your reliance on cash and join the digital revolution.
Consumer Demand for Online Payments is Exploding
According to a Global Online Payment Methods 2020 study, almost 50% of global shoppers were using digital payments more than they did post-pandemic. Clearly, whether you’re a global retail behemoth, local business, restaurant, or government department it’s important to realize that the current pandemic is accelerating trends that will shape global growth for years to come.
One relatively new payment tool that is providing an opportunity for businesses is the Virtual Prepaid/ Debit card. Used like a credit card delivered via email, these modern methods of delivering funds are proving to be more than just a fad. They are flexible, can be used online at any merchant that accepts major credit cards, and can be co-branded to the needs of any client. What’s more, the cards can be sent to hundreds of thousands of clients, with a click in seconds.
Another interesting trend is the explosion in use cases for these new methods. While typically used for incentives, forward-thinking brands are finding new and exciting ways to utilize these convenient payment tools to overcome obstacles that come with the new norms. Example: In one case, a company hosting a virtual event for hundreds of their employees wanted to send everyone a gift card to purchase their hosted lunch. Seems simple enough, however, ensuring that everyone gets a payment that can be used across a wide variety of merchants became an issue. Enter the virtual card. Employees simply click the link in the email they received and spend their cash like they would with any major credit card. Regardless of location or dining preferences, each received a personal reward.
Consumers are Looking to Support Local Businesses and Restaurants
The push toward modernization does not stop at small businesses – cities, and municipalities are adopting digital supports to help boost shopping locally. The tourism industry continues to be one of the hardest hit by the COVID-19 pandemic. With constantly changing rules, lockdowns, and restrictions, local businesses are struggling to stay afloat.
According to CoStar Advisory Services, more than 11,000 store closings have been announced this year as the pandemic has ravaged retailers’ business models. While store closures and booming digital growth online threaten local business owners, it also offers an opportunity for cities and tourism departments looking to boost the local economy using the support available to them. Utilizing modern payment tools for value-added incentives – like digitally-enabled prepaid cards tied to an online banking app – cities are helping increase municipal spending, while driving up to 60% of recipients to local restaurants, directly impacting their local businesses.
Virtual Meetings and Events are the New Norm
Employee rewards and corporate events have changed. For decades, high-performing organizations have used incentive travel as an effective management strategy, but as IRF President, Stephanie Harris notes, while travel incentives are not a viable option at this time, recognition, motivation, and rewards are still critical aspects of any business.
“Although incentive travel has been postponed, employee motivation and recognition continue to be critically important during these challenging times,” said Stephanie Harris, president, IRF (Incentive Research Foundation). “Incentive program owners are shifting their 2020 strategies to focus on virtual recognition events and providing alternate awards—while planning a return to incentive travel in 2021.”
Incentives come in many forms, but the draw of extra money, especially in these uncertain times can make all the difference. Again, pointing to alternative incentive rewards as indicated by the IRF – digital incentive cards provide users with a flexible, easy-to-use reward, that can be reloaded over time for additional desired behaviour. Co-brand digital payment cards in particular work well for such programs as they can be co-branded by the company providing them unparalleled flexibility for employees to spend rewards on what truly matters to them.
Client Service Quality Has Become a New Business Requirement
Whether you run a physical store or eCommerce store, it’s beneficial to communicate to your customers not only the steps that you’re taking to keep them safe, but that you truly appreciate their business. COVID-19 Christmas for many people will be particularly difficult. As we all adapt to the “new norms’ it’s important that your employees be upbeat, helpful, and above all safe.
One un-sanitized workplace or one infection can mean the difference between success and failure. Ensure your employees communicate effectively and safely. Implementing monitoring tools for both service and sanitation can help keep everyone accountable while offering employee rewards for reaching above and beyond these measures will be money well spent.
Choose an incentive that helps promote COVID-19 friendly measures, while communicating your brand and message. Prepaid cards in particular have been a preferred option for years as they provide choice and convenience in where, when, and how they can be spent and sent. Contactless card options also help clients stay safe while providing unparalleled choice in reward spending options. According to a new Mastercard global consumer study, 76% of Canadians say contactless payments are now their preferred way to pay when making in-store purchases citing convenience, safety, and cleanliness amid the COVID-19 pandemic.
Looking Forward: Predictions for the Future
No matter what challenges you face in 2020, implementing new more modern digital payment technologies can help overcome many challenges large companies, governments and small to medium-sized businesses currently face. Whether your providing value-added incentives, eliminating cash, distributing stimulus funds, or helping small businesses compete in this unprecedented time, TruCash has the tools to make your program a success. If you’re looking for help in rising above new challenges, TruCash can help.