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HOW 5G WILL REVOLUTIONISE RETAIL PAYMENTS

Steve Villegas, FinTech and Partnerships Leader at PPRO

 

Retail has increasingly become a mobile function to meet the needs of a constantly on-the-go consumer base, especially with the rise in popularity of mobile E- wallets. The introduction of 5G will only enhance innovations in retail technology and in turn, benefit the consumer.

While still in its infancy, there is an expected global 5G rollout coming soon which will lead to a more interconnected global economy of merchants and consumers. Faster internet speeds and a decrease in latencies will lead to even faster, more seamless payments made via a mobile device and usher in a new era of innovation. Mobile payments are an increasingly popular payment method and the arrival of 5G will only fuel and further accommodate the growth of this trend.

 

The Rise of Mobile Shopping

Across the globe mobile payments are on the rise. According to PPRO research, 45% of global e-commerce transactions are completed on a mobile device. From Europe to Asia, we are seeing very high adoption of e-commerce being completed on a mobile device, at 43% for Western Europe and 55% for the APAC region. Faster 5G speeds will only enhance these shopping experiences leading to unprecedented rates of mobile transactions.

Consumers worldwide are looking for easier and faster ways to shop. If they see a new game their friend has or an interesting looking jacket on the train, they want to be able to instantly make that purchase on the go. With broader coverage areas and faster speeds, 5G will turn these preferences into a global reality.

 

Faster Speeds Create Seamless Experiences, For Consumers and Retailers Alike

Faster internet speeds and lower latencies will lead to better consumer online transaction experiences; this is especially for true mobile shoppers. 5G is expected to speed up data three times compared to 4G/LTE. So, utilising mobile payment methods will lead to a smarter and more customised payment process for consumers. This will be the key for retailers and online merchants to capitalise on the benefits of 5G.

Commerce is quickly shifting towards mobile. Faster data with less latency will result in an ever-higher adoption of mobile payments due to ease of use. A consumer will be able to see a product in an ad and instantly purchase it online, no matter where they are. Faster internet speeds will open the door to vast mobile retail possibilities.

 

The Role of E-Wallets

Increased internet speeds will lead to higher volume and ease of online, mobile transactions. Mobile E-wallets are already a widely adopted payment method and majority have direct access and interfaces specifically for mobile adoption.  The popularity and adoption of these payment methods will only continue to rise with the arrival of 5G.

According to PPRO research 23 % of US e-commerce payments occur by e-wallet and this figure jumps to 49% in China. They are also the leading form of online payment across all of the APAC region at 40% of online transactions. E-wallets have become an increasingly preferred payment method due to their ease of use and seamless smartphone integration. Their adoption is very high in Asia and Europe already, while the US is not too far behind. With faster 5G speeds all regions should see a major uptick in mobile payment usage.

The two largest mobile e-wallets in Asia are Alipay and WeChat Pay, so offering these payment methods will be vital to reaching mobile, online shoppers. In fact, WeChat Pay had 980 million users in China and in 2017 was used by Chinese consumers at a rate of one million transactions per minute. These figures will rise even higher with the rollout of 5G.

By 2021, U.S. cross-border e-commerce will reach $203 billion. The introduction of 5G will likely inflate these figures even further as the ease and facilitation of shopping on a mobile device continues to progress.  Retailers and Merchants that embrace these different mobile payment methods will be ready to take advantage of this growing opportunity.

 

Better Mobile Experiences Leads to Further Online Shopping

The launch of 5G will provide more internet access, currently there is only a 49% global internet penetration.  This will lead to more online consumers worldwide and create even faster websites. Broken down this is a 10X decrease in latency and up to 100X more network efficiency.

Advancements with 5G will allow for easier online shopping experiences to an even broader spectrum of digital consumers.  In fact, Adobe reports 5G will boost e-commerce revenue by $12 billion by 2021. Offering mobile adapted e-wallets will prepare retailers to take advantage of this trend.

After 5G, consumers will truly be able to pay and shop wherever and whenever they want to, with little resistance and receive instant confirmation of their purchases. Merchants should see a boost in revenue due to even more seamless mobile shopping. A combination of merchant and shopper apps and faster 5G speeds will cause consumers to naturally move towards mobile commerce. We are already seeing this adoption worldwide, as in France, mobile e-wallets comprise of 21% of online transactions and after the 5G rollout this percentage should shoot up.

Merchants who don’t jump to offer these consumer-friendly payment methods like e-wallets and realise the spike in transactions completed on mobile devices will miss out on a billion-dollar growth opportunity. 5G is the launching pad to worldwide mobile transactions, it is now up to merchants to embrace the mobile trend the same way global consumers have.

 

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Finance

HOW TO MANAGE YOUR CASH FLOW IN UNCERTAIN TIMES

CASH FLOW

While the world is constantly changing, probably at a faster pace now than ever before, businesses need to manage cash flow and costs to drive success in uncertain times, says Matthew Thorpe, partner at Haines Watts Essex.

 

Managing people and expenses

There are certain costs that you just can’t avoid as a business – to keep your operation running seamlessly, but scrutinise the detail and cut down on any non-essential expenses. Check things like your SaaS subscriptions and look out for costs that auto-renew and if you do cancel, remember to also cancel your direct debits too.

You might want to put a freeze on hiring new people, but ensure that other roles and responsibilities are clearly and efficiently assigned across your team. The Coronavirus Job Retention Scheme (CJRS) has been introduced by the Government to help UK employers access support to continue paying part of their employees’ salary to avoid redundancies. Affected employees are classed as “furloughed workers”.

Once furloughed, the employee cannot work or they will not qualify for the scheme. For businesses that perhaps need to go further, there may be some roles they don’t need any more, but businesses should work sensitively with people to manage this.

 

Cash is king

In uncertain times, owner managers will need to keep operations going to ensure financial stability. You should look to manage debt more efficiently by negotiating extended payment terms with creditors. You could also renegotiate loans for longer repayment terms to give yourself a lower monthly payment, helping the business to set some cash aside each month.

 

Daily forecasting

As a business owner, you need to create a cash flow projection and update this regularly if you are to improve things. You can do this using financial information to create a picture of how the business will look in the next 12 months. The forecast needs to show revenue sources and expenses, which will show the ups and downs of business income and can be used to make sure that enough finance is in place.

 

Good house-keeping

While banks and other finance providers recognise that the cashflow of a business may be disrupted by the impact of Covid-19, they are still going to want to see that you are viable and continue to trade in these uncertain times. Make sure your business is organised and don’t let disorganisation cause unnecessary issues. You can evidence this by having detailed forecasts; current order books and projections (as best as possible).

Having instantly accessible, accurate financial information allows you to plan effectively, spot issues before they become problems and manage your money in the most efficient and rewarding way.

 

Embrace technology

Software is now incredibly user-friendly and accessible from anywhere. For a business owner embracing the technology, this means:

  • Invoicing can be done instantly when a job is complete, emailed to the customer with an easy to use link to a payment platform.
  • Comparison websites can automatically monitor and help maintain lowest cost for things such as light & heat, insurance etc.
  • Technology can be used in place of face-to-face meetings. It can also enable them to adapt production lines to different demands.

All of these things and more, used properly, can make managing your business finances quicker, easier and often cheaper.  You will also be able to bring clarity to where your business stands and prepare for the next steps.

 

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Finance

HOW FINANCIAL SERVICES CAN GET TO GRIPS WITH RISING SUPPLY CHAIN RISK

FINANCIAL SERVICES

By Alex Saric, smart procurement expert, Ivalua

 

UK businesses have never been more dependent on their suppliers to help them deliver goods and services to their customers. Be it retail, manufacturing or financial services, suppliers have a vital role to play when it comes to innovation and meeting customer expectations. However, as supply chains become increasingly global, businesses are potentially exposing themselves to more risk than ever before.

This is especially true in financial services. Whether it’s the impact of geopolitical events like Brexit or global tariff wars, supply shortages, security or the businesses impact on the environment, an organisation’s failure to identify and mitigate risk could see millions wiped off its share price, and its corporate reputation left in tatters. Risk can present itself anywhere and at any time, so financial services firms must be ready to address it. However, many simply don’t have the ability to evaluate suppliers for risk factors, leaving them wide open to business operations being hindered, or being slapped with financial penalties.

 

More suppliers, increasing risk

One reason why financial services firms aren’t able to evaluate suppliers is the breadth and scale of today’s supply chains. For example, French oil company Total said in in a recent human rights briefing paper that they work with over 150,000 direct suppliers worldwide. This is just one example of how large and varied the roster of partners has become. Research from Ivalua has found that financial services businesses on average are working with around 3,600 suppliers annually, which is evenly split between UK-based and international partners. That number is expected to rise, with 60% expecting the number of suppliers they work with to rise.

The expanding nature of suppliers is only going to expose financial services firms to more potential risk than ever before, yet 78% say they face challenges gaining complete visibility into suppliers and their activities.

A lack of supplier visibility leaves businesses unable to identify and mitigate against supply chain risk. In fact, almost three-quarters (73%) of financial services firms have experienced some type of risk during the last 12 months. These include; supplier failure (43%), environmental impact, such as pollution or waste (35%) and supply shortages (45%). Supply shortages can be among the most damaging to a business, as seen by both the KFC chicken shortage which closed stores, and the summer 2018 CO2 shortage which caused companies such as Heineken and Coca-Cola to pause production, impacting supply across Europe during the World Cup.

 

Businesses unprepared for the worst

One way financial services firms can better prepare for risk is to ensure they know what to plan for to reduce the impact. However, whilst some say they have a contingency plan in place to deal with risk, many of them are unprepared. Financial services firms admitted to not having comprehensive and deployed contingency plans in place to prepare the supply chain for risk such as; natural disasters (68%), supply shortages (67%), geopolitical changes (65%), environmental impact (63%), supplier failure (62%) and modern slavery (50%).

In order to effectively prepare for these types of risks, it’s vital that financial services businesses fully understand their suppliers, their business environment, global variations in regulations, geopolitics, and a host of other factors. But for many, there are multiple challenges when it comes to gaining this understanding. A prevailing factor is an inability to gain visibility into all suppliers and activity because supplier management data is stored in multiple locations and formats, making insights difficult to access. This leaves teams unable to review supplier activity and assess compliance.

 

Making supplier management smarter

It’s imperative that financial services businesses are able to respond or prepare for supply chain risk. Clearly, much more needs to be done to ensure they have complete visibility of suppliers, especially in an era where regulators can levy heavy fines for GDPR breaches and scandals spread in minutes over social media. These types of risks can be reduced in the future if procurement teams have a 360-degree view of suppliers which will help with contingency planning and risk management.

For example, in the instance of supply shortages, plans could be put in place that identify alternative suppliers to ensure any shortages do not impact end users. This type of supplier collaboration is paramount when it comes to managing and mitigating against supplier shortages. When it comes to regulations, financial services firms can’t allow a lack of visibility to limit their ability to ensure all suppliers are compliant.

To do this, teams must take a smarter approach to procurement that gives complete visibility into suppliers throughout the supply chain. This will allow financial services firms to identify and plan for risk, reducing the potential damage, and ensuring they are working with and awarding business to low-risk suppliers. Supply chain risk is rapidly becoming an overarching concern for financial services firms, but by providing the ability to assess suppliers, they will have all the insights they need to mitigate the impact on business operations.

 

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