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Navigating Covid-19: impact on the merchant payments ecosystem

Sebastien Slim, Regional Director at HPS, talks to POSitivity Magazine about the direct implications for the merchant payments ecosystem.           

- How do you see the direct impacts of COVID-19 on the merchant payments industry? Will there be changes In Transactions Volume and in business models/propositions (services) of payment providers?

“COVID-19 crisis has certainly shaped the way consumers shop. There is the need to be more cautious and respect security measures. Hence merchants face a new challenge: they must provide digital, contactless and frictionless payment methods to their customers. As a payment software provider, it is key to ensure smoothly their transition by enabling merchants to shift to cashless payment methods. 

While consumers were confined to their homes, global ecommerce transactions grew. However there is a certain decline on the overall revenues due to some remaining restrictions for industries - for instance the travel industry.”  

- How can payment providers help Merchants navigate through COVID-19 and in the new post-COVID reality to drive frictionless payments?

“There are different ways to do so: either facilitating the usage of existing contactless products or launching new frictionless payments.

For the first one, PowerCARD payment software allows to increase easily payments limits: for example change contactless limit from 30 to 50 EUR, as it is now required in many European countries. This change does not require any line of code and is available right away.

For the second one, during this unprecedented crisis, the World Health Organisation encouraged contactless initiatives to boost the usage of more hygienic payments. 

This crisis not only promotes the usage of contactless payments, but it also encourages the usage of any frictionless payments methods. As a matter of fact, HPS recently launched in Ghana and Saudi Arabia an universal and national QR-code payment solution. The implementation of those QR code solutions is timely as it coincided with the World Health Organisation’s advice to use contactless payments and avoid the handling of bank notes to deter the spread of Covid-19.”

- Shopping behaviour of consumers is radically changing. We are increasingly embracing digital wallets and contactless payments and many consumers are buying online the frequently purchased products/items previously (like groceries). Do you expect that Ecommerce will grow in the new "post-Covid" Normal and how this may affect the payment Industry?

“Except for the industries who are still facing some restrictions, ecommerce will likely continue to grow. 
However, the ecommerce activity has been deeply impacted by the shipping and delivery of the products which has been even more problematic during the quarantine.” 

- How can payment providers help merchants with setting up payment processes to cater to the changing shopping behaviour (from in-store to online/mobile)?                            

“To support merchants’ transition from in-store to online and/or mobile, payment providers shall offer an omni-channel solution, enabling seamless payments. It means they need to accept online payments in the exact same way they accept face-to-face payments: same “offer/capabilities”, same flexibility, same security, etc.

For example, after the lockdown when stores will start to reopen, merchants must be able to accept seamlessly the reverse of the transaction at a point-of-sale that was previously done online.”  

- A massive wave of chargebacks, spurred by the coronavirus, are expected in the payments industry as purchases, events, and trips are being canceled. Merchants are overwhelmed by disputes and cancellations. Customers demand to refund money for travel and accommodation. What are the new challenges for merchants, payment providers and the industry on the way to efficient chrageback managament?                                                                      

“This will drive for sure new processes to agree on customer requests to get their refund, get a voucher to be used later, etc. That being said, it is not because something is cancelled that it necessarily means a chargeback for the merchant: it really depends on their own regulatory environment and policies. 

However, the challenge for merchants will be volumes. Indeed, merchants facing a high number of chargebacks - at least higher than their usual average - do need a scalable platform to manage big volumes. Also, automation of chargeback can also be of great help to deal with this increasing number of chargebacks to reduce the manpower required to process those chargebacks.”