Much like Ebenezer Scrooge on the eve of Christmas, the payments industry has been transformed by very recent events. Always one to turn a situation on its head and find the positives, Compass Plus likes to think that the turning tides of payments have come as a gift from 2020 past.
In the first of our three-part series, a collection of our industry experts at Compass Plus told us what they thought about the impact on the industry, and the change of consumer habits that have occurred during 2020 – the year that no one could have predicted.
The opinions you will read below belong to:
Sergey Putenikhin – VP, Eastern Joint Regional Directorate Managing Director, Asia Pacific
Aleksei Chumakov – Head of Business Intelligence, Russia
Nayan Raut – AVP, Regional Business Development Director, Asia
Carlos Seer – AVP, Business Development Director, LAC
SP: When the pandemic occurred, it made us all look at payments from a different angle. I think the payments industry will continue to progress in the same way and 2021 will see even more electronic commerce and less physical means of payment.
NR: The major impact of 2020, seen globally across all industries, is COVID–19. In banking, we saw a push for the digitalisation of payments, options for paying deferred equated monthly instalments (mortgage payments for example), delayed bill payments, etc. In remote places where the infrastructure was not ready, cash was still the main factor for commerce. Where cash was limited, we saw an increase in credit use. All of these situations saw the industry learn on its feet and create new waves of innovation in the payments ecosystem, such as neobanks, small finance and credit societies, and more digitalisation. I believe that these trends will continue into the future.
AC: As the 2020 pandemic is still here with us and continues to affect people's lives and businesses in general, I think 2021 will continue to embrace the impact of this 'new normal' with the boost of online payments, contactless payment options, and remote working, which, in turn, will continue to affect the industry.
CS: Traditionally the EFT industry has spent millions in marketing campaigns aimed at influencing the consumer to adopt new payments technologies as they become available. The task is basically to transform consumer habits in terms of a preferred payments method. In Latin America, different circumstances and idiosyncrasies makes embracing certain technologies slower or not yet adopted. However, in 2020 we’ve experienced unexpected conditions that allowed some of these technologies to flourish:
- The current pandemic has accelerated the adoption of electronic commerce in Latin America, although in many sectors and countries development is still in its infancy. For example, e-commerce penetration in Latin America stands at 5% of retail sales, which equates to roughly a quarter of those in China and a third of USA.
- Latin America also saw an explosion in food delivery services, including growth in new users searching for the services. With this growth, e-wallet solutions saw a big boost in usage.
I expect that consumers in my region will return to old habits once the present conditions go away, but this may occur without completely abandoning the newly acquired habits, thus saving the industry significant efforts and resources compared to previous programs aimed to promote the acceptance of new payment instruments.