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Finance

COULD DIGITAL EXCLUSION IN PAYMENTS BE A BARRIER TO A COVID-FREE SOCIETY?

By Vince Graziani, CEO of IDEX Biometrics ASA

 

Cash is in decline in every country around the world. That has only intensified since the emergence of the COVID-19 pandemic, swiftly leading us towards a cashless society. Many retailers have stopped accepting cash altogether, instead encouraging customers to use contactless card payments or mobile apps to pay in a touch-free, and more hygienic way. Given concerns around the virus staying on bank notes for around 48 hours, and ATMs potentially being touched by hundreds of hands without a deep clean in between, many of us have instead embraced touch-free payments.

Touch-free authentication allows consumers to make a transaction without having to touch a shared PoS to tap in a PIN number, sign for their purchase, or hand over cash. It is common when tapping a contactless card or using a mobile payment app and is an increasingly vital step in the process of making the payments industry safe in the world of coronavirus. Yet, there is a significant segment of society that still rely on cash who are unable to embrace touch-free payment authentication.

As we move more towards a more digital-focused society, Government bodies are increasingly worried about the effects on vulnerable members of society. In particular, the elderly, those who remain un-banked, or those without a smartphone are still reliant on cash and could be left excluded in a digital-first payment ecosystem. In a post-COVID world, these same groups are those who could be most exposed to further viruses from cash circulation.

So, with touch-free payments important to improving hygiene, there is an important question to consider for those unable to access contactless payments: could digital exclusion be a barrier to a COVID-free society?

 

Bridging the digital exclusion gap

Those who are digitally-excluded have limited or no access to digital tech that can make life more convenient, such as a smartphone or payment apps. According to the ONS 9% of UK adults, or almost 5 million people, don’t have access to the internet, while in the USA, FCC data suggests around 42 million Americans lack broadband internet. As a result online banking would be inaccessible to many. In the UK, the Government-commissioned Access to Cash review found that 17% of the population – over 8 million adults – would struggle to cope in a cashless society.

Exclusion from the digital world can lead to lower skills and confidence, but it can also lead to social exclusion and a wider impact on economic problems. As payment technology continues to advance, the use of basic IT devices could become essential to access goods and services. While touch-free digital payments offer many benefits, not everyone is ready to embrace a fully digital society just yet. But in our new normal, we must also consider the need to remove the concerns around transmission of the virus on cash.

Therefore it is important to be more innovative in our approach to payments and ensure that Governments and banks work together to develop new digital payment technology in a more inclusive way, to bridge the digital exclusion gap.

Failure to do so will see those without access to digital services and payment options locked out from everyday services that so many of us take for granted and forced to continue using cash. Meanwhile more digitally-included members of society are able to avoid touching paper notes and coins or ATMs amid the threat of the virus. With more and more banking services moving online the need for simple and secure access to these digital services is more important than ever before.

 

How biometric technology can support digital inclusion

In The Access to Cash review, the commission highlights biometrics in digital payments as an innovative technology that will make payments even easier in the future, which will support the pace of change towards a cashless society.

Biometrics are likely to be key to revolutionising digital inclusion in the coming years. As people get used to using fingerprints and faces to identify themselves, biometrics will become a more familiar and accepted touch-free way to validate transactions. Now, fingerprint biometric sensors can be incorporated into smart payment cards providing a speedier, personal and more secure means for consumers to authenticate payments.

During a transaction, a consumer only needs to touch their finger to the sensor on their own payment card, and then hold it over the contactless card sensor. This will allow them to authenticate a payment of any amount, without a payment limit. By extending biometrics to payment cards, authentication will no longer rely on what you know, or what you can remember, but who you are. This is valuable for those who struggle with PINs as well as in countries with lower literacy levels or less reliable identification systems.

The use of fingerprint biometrics in smart cards are also an affordable way to ensure touch-free authentication in the payment process while effectively banishing the concerns people currently have about the implications of devices being lost or stolen. For those that don’t have access to a smartphone, they will still be able to bank and pay for goods securely and in a touch-free way without a large upfront cost.

 

We have a duty to provide cost-effective touch-free payment methods

While tackling digitally exclusion remains complicated, advancements in biometric fingerprint technology are leading the way to a more inclusive payment method. By placing an emphasis on usability, the benefits of touch-free authentication can be made available to all.

As we move towards a cashless society, Government bodies have a responsibility to work with payment method providers and banks to ensure those who remain unbanked have access to cost-effective touch-free payment methods, such as biometric payment cards. This will limit a potential second wave and protect vulnerable citizens from the spread of future viruses during the payment process.

 

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Finance

HOW TECH CAN ALLEVIATE WORKPLACE ANXIETY IN THE FINANCIAL SERVICES SPACE

– Raj Krishnamurthy, Freespace

 

Financial institutions are attempting to understand the short, medium and long-term challenges the pandemic has had on the interconnected financial system and global economies. It’s hard to ignore the major role it has in contributing to GDP in the UK. According to a House of Commons briefing paper in July 2019, financial services contributed £132bn or 6.9% of total UK economic output at the end of 2018 and the UK financial services sector was the seventh largest in the OECD at that time. There were also 1.1 million financial services jobs in the UK, 3.1% of all jobs at that time.

The industry also has a pressing concern on its doorstep – the issue of surplus commercial real estate and the wellbeing of its workforce. The latest CBI/PwC financial services survey found 74% of companies have been revising their office requirements and 88% of the financial services firms polled said the pandemic had resulted in a greater shift towards remote working.

Trends such as flexible start and finish times, a shake up to the traditional five-day working week and refurbished headquarters to allow for social distancing are now commonplace across the financial services sector. The eventual ‘return to work’ for this crucial sector is of national importance and workplace technology can play a central role in supporting this. For example, the Freespace booking app has been designed to help employees plan their day into work. Enabling the reservation of a clean, socially distanced desk for employees to use on their days at work, the app also helps manage communications and questionnaires to ensure employee wellbeing. Futhermore, it helps users to coordinate their visits into work with an inner circle of colleagues ensuring they are there together on the same days and find safe spaces in the vicinity of each other easily. The app, which integrates with smart tags on the desks, also becomes a key tool in office based contract tracing.

Raj Krishnamurthy

Two further strategies are also proving popular to reduce the impact on business operations. The ‘split group’ solution separates employees into different weekly groups in the event that one group becomes infected. This supports business continuity by isolating the group that has been infected at home until the risk of infection passes. Meanwhile, the other group continues to work from the office.

Alternatively, the ‘split desk’ strategy enables the alternating usage of desks between days, creating maximum usage of the space overall and more time for cleaning teams to react to the demand. Our SPOT micro-location service can help demarcate a space to achieve this outcome digitally. This is a critical time and organisations must do a lot of thinking when it comes to making their workplaces as safe and productive as possible.

A large professional services firm deployed our social distancing solution to support the phased reopening of its offices across the UK. This features a combination of sensors and digital systems designed to help identify and communicate which available spaces are safe for employees to use. To support its ‘split desk’ strategy, a digital tagging system using colour-coded SPOT tags on each desk physically identifies which workstations can be used on each day of the week. These align with colour-coded sensor screens that depict office layouts and display coloured dots which indicate where employees can sit depending on the day of the week. Only permitted desks, meeting rooms, phone booths, floors and other work zones will be displayed on the digital screens, ensuring employees do not accidentally access restricted areas.

 

Turning to technology

Employers will keep workplaces hygienic and allay people’s fears if they communicate the right information, at the right time and to the right level of detail—and the most effective way to do this is by providing employees with mobile apps and installing digital signage throughout the workplace. While there will always a place for static posters, digital platforms allow for the instant and dynamic delivery of messages at the exact point they need to be consumed.

Displaying live data on socially distanced spaces to use, cleaned space availability and cleaning regime updates will help to guide staff and reduce cross-contamination. Facilities teams can also use the technology to deliver methodical cleaning practices and reassure occupants by highlighting the preventative infection control measures that they are undertaking.

Technology has the ability to sense and learn when and where spaces are in use. This enables an organisation to keep its premises clean and compliant. Occupancy-based data can also keep heads of HR, facilities management (FM) and commercial real estate (CRE) abreast of individual and collective behaviours, allowing them to make educated decisions on optimising real estate. To evidence the cleaning history of a desk so employees know when it was last used and cleaned ahead of their arrival. To help staff plan their day at work so that they are assigned a safe work space and know who among their colleagues are working in the office on that day.

The sudden change brought about by COVID-19 has highlighted several misconceptions about the workplace. Office-based workers, even those who were previously sceptical, will now accept that technology is going to play a key part in how the workplace experience is delivered. Employers across the financial services space will still need to reassure their teams that their working environment is going to be safe with the goal of being equally productive as it was prior to the pandemic.

 

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Finance

WHAT DO YOU GET IF YOU CROSS A GLOBAL PANDEMIC WITH A LATE PAYMENT EPIDEMIC?

Glen Morgan is co-founder and CEO of itsettled

 

How to respond to the most typical reasons for non-payment.

Covid-19 has affected businesses, and smaller businesses in particular, in a number of ways. The main challenges include a massive drop in sales revenue, weakened cash flow and reduction in orders. And these combine to threaten the future viability of the business.

UK SMEs have been in the midst of a late payment epidemic for a number of years. Covid-19 has added an extra layer of complexity onto that, and an obvious (and in many cases, valid) reason for debtors to delay or even default on overdue invoices. It’s an awful situation to be in, and efforts to help businesses to get back on their feet are ongoing and essential.

But what if you’re on the other side of the transaction, as the business that’s waiting to get paid? Here’s some practical advice for how to respond to the most typical reasons for non-payment:

 

Reason 1 – We have ceased trading or are about to enter Liquidation/Administration.

If this reason is used then you’re well within your rights to ask for proof. If this cannot or will not be provided, continue with your collections process as stated and agreed with the customer at the outset of the relationship. Only non-genuine businesses will object to providing proof.

Examples of the type of proof that would be acceptable are the name of a proposed Insolvency Practitioner or details filed at Companies House.

 

Reason 2 – We can’t pay as we don’t have any money.

Again, ask for proof. This would typically be in the form of three month’s worth of bank statements and management accounts. You might also ask if they have received any Government backed support such as CBILS or Bounce Back loans.

If they are unwilling to provide this information then it is likely to be an excuse, not a valid reason. If they have received financial support and have had cash injected into the business then you should expect payment according to agreed terms, since this is the reason it was lent to them in the first place.

 

Reason 3 – We can’t pay this all in one go. Can we pay in instalments?

You should firstly request the same proof as stated above. Providing their cash flow has been impacted, be prepared to agree a payment plan that will take the customer no longer than 3-6 months to pay the debt owed. For future transactions with that customer you need to consider proforma or advance payment to ensure the position does not worsen.

 

Reason 4 – The invoice has a query on it.

Ask them not only to provide the details of the query but also to confirm when this was originally communicated to your firm. If the invoice was raised before or during the lockdown period then they should have made an attempt to query this invoice before.

When they provide details of the query, resolve it quickly. Be prepared to reject queries for older invoices and rely on your terms and conditions, which should highlight the timeframe in which queries are accepted. If they state that they were closed for a period during lockdown and therefore have only been able to query this now, again, ask for proof.

 

Reason 5 – We can’t pay as we’re waiting for payments from customers ourselves

Again, ask for proof (do you spot the theme here?!?) such as bank statements, the number of customers that owe them money, and how much is overdue. If they’re unwilling to provide this, for whatever reason, then proceed with your collections process.

We’re in a period of unprecedented and extreme uncertainty, and it’s essential that we all support each other through it. But let’s be 100% clear. This is money owed for work that has been done, so if your customer is unable to pay, for whatever reason, then they should be open and honest with you and provide the required proof. If this isn’t provided then you need to do what’s best for your business and continue to pursue full payment of the debt owed.

It doesn’t seem as if Covid-19 is going away any time soon and the issue of late payment is one that has plagued small businesses for years. Waiting for someone else to help you tackle this issue doesn’t seem very practical, so it’s time to take control of your own cash flow.

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