By Mohamed Chaudry, Group Chief Financial Officer of FoodHub
The year 2020 may well have sounded the death knell for the saying cash is king. As the pandemic took over our world, consumer behaviour altered considerably as people embraced contactless payment, e-commerce and delivery services for many of the things we once handed over notes to buy.
Finextra reports that research carried out by YouGov for the ATM network Link found that 58% of Brits are using cash a lot less often thanks to the pandemic, with 54% avoiding it altogether and using alternative payment methods.
Some 76% of those questioned by YouGov added that they think the crisis will affect their future use of cash over the next six months.
Adapt to survive
Many businesses, particularly those in the food sector, quickly worked out they needed to pivot and adapt if they were to survive. Social distancing measures, lockdowns and the economic downturn hit the hospitality industry hard.
Safe and convenient online payments provide food businesses with a solid foundation from which to operate. The year 2020 saw the rise of payment gateways and the size of the market is likely to escalate in the coming months, giving online merchants more choice over the gateways they choose to work with.
Many of these platforms are embracing the changes in innovative ways, adapting to the altered way of life and creating different ways to facilitate recurring online payments and members’ due models. They can also put in place order ahead services for restaurants and expanded delivery options.
‘Seamless’ payments process
As lockdown restrictions continue to drive more people online, the e-commerce industry needs to offer seamless online payments to maximise its soaring popularity. The right payments provider should be able to guarantee security, offer access to fast-growing markets and a plethora of relevant payment methods for each market, all components that provide expansion opportunities and a better consumer experience.
Payment providers allow food businesses to focus on their core business and meet new customer demand while they take over the non-core competency tasks. Platforms such as online food portals need to design their site or app to make it as easy as possible for merchants to onboard and customers to use.
As the use of online payments racks up, online security has never been more important. Increases in one inevitably result in the increase of fraud or cyberattacks. Platforms and businesses must ensure customer data is protected. Payment partners can ensure security is key, their greater size and expertise providing the added edge to small businesses that do not have that capability.
Building a loyal customer base
Payment security is what will encourage—and keep—customers who haven’t previously used online food portals. Building a loyal, local customer base can encourage businesses to consider expansion—perhaps opening more venues in their region or county or even nationwide.
Promoting the ways in which a platform can benefit customers and a community—in the midst of a pandemic, for example, many people will be conscious that their local takeaway/restaurants, etc., are suffering and they’ll be anxious to help—is another way to broaden a platform’s appeal. An app that doesn’t charge a service fee or take a commission from its partners is one way to do this.
Covid-19 has accelerated consumers’ whole-scale move to online payments faster than anyone can have imagined, and they want convenient, relevant and secure payment services for markets that have previously been served mainly by cash or card.
The pressure is on for retailers (and especially food retailers who want to survive) to ensure they can meet this demand.
