Payments Ecosystem Playing Its Part

By Bernard Foot, Strategy Analyst at MYHSM, the global provider of Payment HSM as a Service,

reviews how the payments industry has acted in the battle against Covid-19.

 In this article I thought I’d explore the world of payments and the recent activities aimed at tackling the Covid-19 crisis. I’m not focussing on the pre-existing technologies and products that can be deployed to help, but rather the actions and decisions taken since the outbreak of the pandemic. I’m sure that I have captured only a small subset of what is being done, but it gives a flavour of the way that the payments world is reacting to fight Covid-19.

Avoiding the use of Cash

Although there is no conclusive evidence that the use of cash is a factor in spreading the virus, most people and organisations believe that it is. Many shops will no longer accept cash at all.

I was buying groceries from a small shop recently that was not accepting cash, and to make matters worse their card terminal had failed: they were relying on the honesty of customers going home and making online bank transfers for the goods they purchased.

In the western world, value limits for contactless transactions have been raised to allow more purchases to be made using this technology. The increase to £45 in the UK seems somewhat conservative when you look at the new levels of $200 in Australia and $250 in Canada.

It’s also interesting that consumers are switching their purchases from credit to debit cards as they recognise the need to manage their finances in an environment where their income may soon be affected.

In Africa, a different approach is being taken. To encourage the use of mPesa for payments in Kenya, transaction fees have been waived for small purchases, hospital bills, sending money, and transfers between mobile money wallets and bank accounts. The transaction limit for mobile money has also been doubled. Similar actions have been taken by MTN in Zambia.

In the US, Walmart has introduced completely touch-free checkouts using their mobile app, which avoids the need for customers to touch the checkout screen to select their method of payment. In Florida cash is no longer accepted at road toll booths.

Cheques are still with us

Pakistan has taken steps to minimise person-to-person contact for people paying cheques in to their accounts. The payee can now present a cheque at the paying bank rather than having to go to their own branch: this will also speed up the payment from days to minutes.

Banks in Pakistan may also collect cheques from their customers, and customers will be able to drop cheques at drop boxes at their banks.

Merchant fees

To help merchants, Visa and Mastercard in the US are deferring changes to their fee structures.

In the US, Liquid Payments is offering their mobile based patient payments platform free for three months to healthcare providers to meet the increased demand for telehealth services.

Relief for consumers

In the US, banks are being encouraged by the government to provide support for card holders who will be experiencing difficulty in paying off their cards as a result of Covid-19 by eliminating ATM fees, overdraft fees and credit card late payment fees. Many banks are setting up hotlines for affected customers to seek assistance, and some are already offering deferred payments without penalty.

In the UK, the FCA is proposing guidance to banks expecting them to defer credit card payments for three months for consumers who are in financial difficulties as a result of Covid-19, although they are not requiring suspension of interest charges. The FCA is also requiring card issuers to review their charging rates to ensure they are in line with industry norms and do not penalise people on low incomes or with poor credit ratings. These measures are due to have come into effect on the 8^th April, following a consultation period.

Deferred changes

According to Bloomberg, Visa in the US may postpone a deadline for petrol stations to upgrade their fuel pumps to accept chip cards, which would be costly and require human resources that are no longer available to do the installations.

And PCI SSC (Payment Card Industry Security Standards Council) has extended the life of the PCI PTS POI v3.0 standard for 12 months because of the disruption to the supply chain caused by Covid-19 which would make it difficult to replace POI (Point-of-Interaction) terminals in time to meet later standards.

Staying Safe

A key weapon in the fight against Covid-19 is working from home. PCI have provided guidance in a blog called “Protecting Payments While Working Remotely” to provide best practice security for remote working.

One of the least pleasant sides of human nature that has emerged, is the desire of a few amoral criminals to rob us on the back of Covid-19. In the payments world, we are seeing various publications educating us about these thieves. For example, PCI have published a blog called “Beware of COVID-19 Online Scams and Threats,” and Proofpoint have published a blog “Coronavirus/COVID-19 Payment Lures on the Rise” which describes some credit card scams.