The ongoing coronavirus pandemic has drastically altered consumer behaviors and priorities, by both accelerating existing trends (e.g. decline of cash) and creating new ones. Incumbents must adapt to a world changing at a greater pace than expected. These new trends represent a wholly different threat and may now require banks and payments providers to make a strategic about-turn.
In aggregate, these trends are changing some of the fundamental economics of consumer payments. High margin revenue lines like cross-border payments are suffering, but there is more revenue to be gained from offering e-commerce-friendly payments technology. Use of cash, and associated ATM fees, are declining but there are greater strains on digital and phone customer support channels.
As the economic model shifts, payments companies are faced with a choice: either be a commodity player, soaking up high-revenue, low-margin business or invest in finding the new high-value propositions that customers will pay for. We believe there are four themes to consider when evaluating your payments priorities in 2020.
To find out how we’re helping our payments clients seize new opportunities in the wake of COVID-19, please contact the author.