Finance
Knowing the best alternative payment methods
By Danny Chazonoff – Chief Operating Officer at Paysafe Group
With government advice in a number of countries instructing people to self-isolate or remain in lockdown during the COVID-19 outbreak, consumers have limited access to their usual ways of paying – cash being no exception. Many supermarkets and key stores that remain open are switching to contactless payments with a view to reducing the spread of the virus. Here’s our advice when considering what alternative payment methods are available to us:
- Contactless comes into its own
In 2019 we asked consumers what the maximum amount of cash was that they would lend to a friend. The majority answered up to £50. However, with limited access to banks and ATMs it’s challenging to maintain payments in cash. In addition, as the WHO has advised consumers to wash their hands thoroughly after handling physical notes and coins, the perception that we should no longer be touching or even using cash has understandably embedded itself. It’s therefore understandable that both payer and payee are reluctant to use cash for P2P (peer-to-peer) payments. Cash usage in Britain has halved recently, according to Link, which operates the UK’s biggest network of ATMs.
In response, UK Finance raised the contactless card limit for in-store spending from £30 to £45 in a bid to cut the need for physical contact in shops amid the current pandemic. Additionally, mobile phones are also an option for payment as users can already make contactless payments above £30 where accepted by retailers.
- Use digital wallets to deposit and withdraw
If consumers find themselves unable to reach food shops or pharmacies, we’ve seen local communities rally to support. However, the safest way to transfer money to each other is to make P2P payments using digital wallets. These wallets, such as Skrill, have user-friendly deposit and withdrawal methods linked to a bank account. It also doesn’t rely on sharing financial details; in many cases, only the recipient’s email address is required to make a transfer. With one simple integration you can accept card, bank and local payment methods and be connected to millions of Skrill wallet holders. It also has a One-Tap, a single-click payment platform that’s ideal for mobile-friendly recurring payments.
Payment providers that offer people the opportunity to financially support and assist each other in a way that doesn’t compromise their financial security and wellbeing is a great option for people at this time.
- Go mobile
One of the main reasons people have shied away and avoided digital commerce previously is because of a reluctance to share their financial details online or have a digital record of their purchases, and so instead relied on traditional payment methods. However, as COVID-19 continues to affect society as we know it, now might be considered the best time to introduce mobile payments to everyone.
Asa traditional banks are providing more online options, there is an expectation to see a surge in adoption. These services offer customers a variety of payment methods such as UPI, credit and debit cards as well as internet banking. Already, mobile transactions have soared 81% in Italy, since the end of February, according to estimates by McKinsey & Co.
The current situation with COVID-19 could also mean that we see a surge in adoption for mobile wallets like Apple Pay or Google Pay. Similar to contactless cards, mobile phones are embedded with near-field communication technology that can be used for proximity payments via radio waves, and are used in much the same way. Mobile wallets are known for their smooth and seamless customer experience.
All devices are supported, meaning customers can check out from a desktop, laptop, tablet or smartphone. These bring extra layers of security because they’re housed within the confines of your device, and transactions are made using authentication, monitoring and data encryption to secure your personal information. Soon, we’ll see the move transcend to personal biometrics for authentication.
- The rise of eCash: Cash consumers shop online
As more people turn away from handling cash and the shift to digital commerce will be a challenging adjustment for cash consumers, particularly for those who are unbanked. That’s why during this period of both social and economic uncertainty, it’s vital to provide a smooth transition from retail to online payments. The most effective way for online businesses to accept cash is by incorporating an eCash solution into an online checkout. This can be done by enabling a customer to pay for a product or service through using a prepaid account that is topped up by cash, or by allowing a consumer to make a purchase using an online platform which can be completed at a physical pay point (e.g. a supermarket) with cash. This gives the buyer the option to maintain cash as their primary payment method.
- Effective remittances will be a huge support globally
With global travel bans in full force, the need for foreign workers to send money home needs to be instantaneous, simple to use and cost effective to keep some people financially solvent.
This is where effective remittances channels come into play. Combatting the specific issues, including financial inclusion for those needing financial support for the first time, or new access to digital payment methods because of displacement and isolation is of high importance.
Services like Skrill Money Transfer are designed to help and support expats and people living overseas, not just in this crisis, but continuously. The service allows people to send money home to their families more securely, more efficiently, and at a lower cost compared with traditional bank transfer services which also require both sender and recipient to have a bank account.
Be safe and secure
Being agile with payments is a necessary in these tumultuous times, however it’s also important to remain savvy in regard to security. There are some people that are using the situation as an opportunity to scam others by claiming to be their bank, as well as fraudsters using online marketplaces to sell goods that don’t actually exist.
For your own peace of mind, remember that banks will never ask you for your full PIN or password via email or phone, or request you move money from accounts. Before you buy anything online, do research to ensure the seller is genuine. And use a credit card if you have one, as most major credit card providers insure online purchases.
Ultimately, as long as you have awareness of what alternative payment methods are out there, it empowers you to decide which one is right for you. In both the short and long-term, the impact of needing to rely on digital products and services is going to be significant. Digital merchants also play a key role when thinking about the evolution of their checkout, especially if they want to attract new customers and retain loyal ones.
