Over the last couple of months, the pandemic has not only changed consumers’ spending habits but also forced businesses to rethink the way they operate. For many small businesses, the economic situation sparked a long-overdue conversation on digitization, with payments being one of the most critical aspects to keep operations up and running. However, big change often brings big opportunities. While digitization in payments now is essential for businesses to stay alive, it yields opportunities to increase internal efficiencies and improve customer experience in the long term.
Let’s have a closer look at how the pandemic is accelerating the digital shift in payments.
Consumers desire contactless
Back in March, in the early stages of the pandemic, the World Health Organization recommended the use of contactless payments to reduce physical touchpoints when making money transactions. Since then, there has been a clear trend in Canadian spending habits:
“While we have seen a continued shift towards digital payments over a number of years in Canada, there’s no doubt that the prevailing pandemic has accelerated this shift - and will likely act as a catalyst in transforming the Canadian payment landscape forever.”
- Tracey Black, President and CEO of Payments Canada
Businesses require contactless
The dramatic shift in consumers’ preferences ultimately forced businesses to adapt the way they accept payments in order to stay alive. But not only the B2C sphere saw a significant decline in cash and cheque payments. Businesses who still strongly depend on cheques for B2B transactions soon realized the incompatibility of cheques with social distancing guidelines. Additional hygienic aspects, office closures and remote working mandates created an uncomfortable wakeup call for accounting departments that still rely on manual, paper-based processes.
As a result, many businesses found themselves under pressure to migrate to digital payment methods to limit revenue disruption as much as possible.
As challenging as it can be to implement a logical and frictionless roadmap to digitization under the pressure of keeping a business alive, the pain points that have presented themselves over the last weeks aren’t necessarily new. The need for modernization in the way businesses process payments has long existed, the changing environment following the pandemic only brought it to light.
Yielding the opportunities of digitization
In today’s world, businesses will benefit from moving away from legacy systems in the long run. Digital payment alternatives are an opportunity for businesses to improve both AP and AR processes and efficiency. Integrating payment technology with back-office processes simplifies accounting processes and increases transaction visibility internally. On the other side of the transaction, there is also an opportunity to improve the payment experience for customers and suppliers - which could ultimately make the difference between completing a sale and turning to a competitor that involves less friction in the process.
In for the long run
Despite all the challenges and uncertainty brought by the COVID-19 pandemic, times like these can also foster innovation and positive changes in the long run. It is fair to say that COVID-19 has accelerated innovation in small businesses, and these innovations are here to stay.
Implementing new payment methods will not only provide the speed, convenience and hygiene needed to combat this crisis, but it will also create a better digital payment infrastructure for businesses in the future.
MazumaGo enables businesses to move away from cheques.
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