Cash and Sex! But What Will Covid-19 Do For Payments After 2020?
Covid-19 lockdown has already 'hit' many aspects of our lives: so let's predict some of the potential impacts upon payments. Predictions will always be contentious, but we can guarantee more accuracy than almost any forecast from January 2020.
Whilst family life has been enhanced, children have bonded more with their parents (usually a good thing!), school education has been impacted (probably a bad thing!) as has the loss of extended family contact. However, home DIY projects have risen dramatically too (not sure if this is good or bad!).
There has been less litigation, less reported violence, less prostitution, less casual sex, crime, and illness. We have all become cleaner and more hygienic (at least when we do go out). Hand gel, wipes and toilet paper sales have out-stripped razors, condoms and shampoo sales.
But what about payments?
More obviously in payments, we know that:
- Contactless payments have dramatically increased (to 78% of over the counter (OTC) sales) and rising,
- Cash use has 'fallen off a cliff' (60% fall) – if 'Cash is king' then 'the king is dead' or at least: 'on his last legs!',
- E-commerce payments have displaced face-to-face payments – driven online shopping, home delivery, 'click 'n' collect' and other models,
- Food consumption has moved from restaurants to home cooking and take-aways,
- Amazon, ASOS, Boden etc. have flourished and struggle to recruit staff to cope with sales growth; and home entertainment products sales have rocketed.
Financial crime has grown exponentially too, especially push payment scams and remote payments fraud, and driven a need for multi-factor authentication in e-commerce payments (the timing being good, but not perfect!). OTC fraud has been under control, but with less travel: cross-border transactions and forex revenues have been largely killed as well.
So prediction time…….
1. Strong Customer Authentication / EMV3DS2.x
With Covid-19 and more e-commerce the UK needed to expedite complex SCA systems changes, certification and communication. But the FCA deferred enforcement from March 2021 to September 2021, which is now two years behind the original 'EBA date'.
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