A year has passed since the onset of the pandemic which has dramatically changed the way commerce operates. To curtail the spread of the virus, many businesses have been shut down, leading to the surge of eCommerce.
Due to the unprecedented spread of the virus, governments around the world have been forced to impose lockdowns. And businesses are groping their way to survive and thrive. The payment industry was compelled to ramp up digitalization that ushers into the surge of eCommerce platforms.
The pandemic has drastically changed the landscape of how to do business as more people stay at home. And lesser people leave their homes to buy daily necessities or go shopping in a mall. In a spur of the moment, eCommerce has become the name of the game. And accommodating digital payment determines how far the businesses can reach a wider scope.
Some have projected that the vaccination program will reach the majority in a year or two, hoping to make COVID-19 manageable. Many have high hopes to revert back to the old ways of doing business. But it will never be the same as pre-COVID again.
According to the report from the World Economic Forum, COVID-19 has simply fast-tracked the shift to eCommerce. This was affirmed by the 2020 report of McKinsey Global Payments, highlighting that cash transactions have fallen sharply.
In general, the pandemic has just condensed the 5 years’ worth of transitional change into just less than a year. Ramping up especially the areas where normally will take time to evolve: customer behavior, business models & mode of payments.
How then, should a business position itself to stay ahead in an increasing effort of digitalization? There are at least three main issues to watch out for:
1. Limited Customer Reach – over a billion adults in the world remain unbanked and many more do not have any credit card. Many of these unbanked do not have the proper documentation that commercial banks normally require.
2. High Transaction Fees – common payment companies normally charge a range of 3 to 7% of the total transaction amount. For the eCommerce retailers selling fast-moving consumable goods, this high fee can take away much of the profit margin.
3. Cash Flow – it has been said that cash flow is the lifeblood of any business. Credit card transactions are typically cleared between 2 to 4 weeks that can sometimes be prolonged when certain issues arise.
Given these challenges, there’s a growing retailer who integrates cryptocurrencies transactions, says Alchemy Pay, the first Fiat & Crypto payment system. Anybody with a data or WiFi connection can trade cryptocurrencies, even without any bank account.
Some businesses consider these as a way to tackle some of the issues mentioned above. To avoid high volatility, anyone can opt to choose stablecoins such as USDT, which is known as Tether. USDT is a cryptocurrency that is backed up by the real fiat currency reserves so the value remains stable.
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