Andreas Demleitner is a Founder at Peach Payments
Darren Franks is a Founder at TalentintheCloud International
Simon Hardie is a Founder at Findexable
This article is a compilation of dicussions, from which we have put together three (3) things, businesses can do, to increase transaction volumes and retain business, in a downturn.
Darren hosted Andreas and Simon, on a one hour and a half talk. They talked about what COVID-19 is doing, to their businesses and the general eCommerce industry.
We at Ultraswift team also collated some of the points, that stood out to us, as we also navigated lockdown period in Ghana and South Africa. This topic is most relevant to the period March 2020 till August 2021.
Where is the payments industry now?
Overall, there has been an increase in digital payments being made for goods, services and remittances. Credit and other offshoots of this, as a payment method, have also increased and in some markets, are also getting a facelift, in terms of regulatory oversight and technological adoption.
Buy Now Pay Later (BNPL) as a payment method, has seen a growth not only in customer adoption, but also in terms of investment transactions, from venture capitalists and corporate groups, into more recent and growth stage BNPL businesses.
Quick bits as for a big picture look :
– 30% spike in overall economic activity, when COVID-19 began in South Africa
– And then down from there with no market, in some industries, from lockdown.
– $200bn loss in revenue globally, from McKinsey report.
Parts of developed world, with strong established digital economies such as the US, Western Europe, drop off in physical eg, supermarkets, etc have seen spikes in volume (also including Italy and Spain). General opportunity for companies who will invest in helping customers to get online.
Working together, rather than competing, to increase transaction volumes and retain business
Many businesses have found a great way to outsource, pool resources or tap into new networks more aggressively. These businesses have done this in order to unlock opportunities and solve problems, during this period. Marketplaces have been one implementation of this. Retailers, who are still in functional growth phase, either in marketing, product development, logistics functions, etc, have achieved this. For some established retailers, a pivot was either forced or opted into – an example is Edcon’s Edgars, in South Africa.
How some SMME’s retained business
An Ultraswift portfolio company and partner, AYA Africa is an example of a curated marketplace. On AYA Africa, anyone can purchase African art and products, from AYA Africa’s community of great local brands. Some of the brands onboard are as Anim Naturals, Fleur Intimates, Essentials By Masika, African Scents, Umbala Clothing and more. In order to retain business, the team not only raised funds during a downturn. They also grew the vendor base 10 fold, in 5 months. A culture of “failing fast” and learning to adapt and adjust also helped to secure growth, for their investors, employees and of course, the creators.
Increasing transaction volumes – Established players
There has been triple digit growth for many Software As A Service players. A good example of this is Zoom. The firm’s sales in the last three months of 2020 were up 370% compared to the same period in 2019, hitting $882.5m. Food delivery, working from home and of course, any essential services, have all seen an increase in online adoption and overall sales.
This also shows us that, the trends are, as we’d expect, highly dependent on lockdown implementation and region. That being said, the greatest and most exciting shift, for everyone in the payments and eCommerce space, is short term increase in comfort or trust and shift in behaviour of users, towards online channels, for purchase. This is spearheading some developments in alternative payment methods and underserved segments and communities. Have a look at some payment methods such as 1ForYou, the developments in Mobile Money in West Africa and a AirBuy; a simplified wallet and payment platform.
Innovating for team members
There are also great opportunities from a human and personal perspective, especially if we look at how behaviours are also shifting in favour of remote working. How can teams motivate themselves and use digital tools to collaborate and continue working together, from a far ? Processes that were slowed down, by the need for physical implementation, will now be accelerated with digital solutions. There have been challenges, from mental health, gender based violence and obesity perspectives. Another important note to be sensitive to, is that many of us lost loved ones, friends and colleagues, to the pandemic. While we’ve lost, it is a great time to look at building the future we want, where the present has not been favourable.
All stakeholders need to come together to support a collective approach to solve some of the challenges in order to increase transaction volumes and retain business. This will do a lot, to drive forward online value delivery. Some businesses have also had to change some aspects of value offering, to adjust for changes in the market. Some have had to do this in partnership with others, to be able to continue delivering on that value.
What makes a difference?
Clear communication with team members has made a difference. This shows empathy and support across business, personal and community aspects of life. It has been an important part of the recovery process for many. Some aspects of many businesses needed to be realigned, redefined or restructured to adapt.
Business development function, for example, would not happen the same way without the physical implementation of the discipline or function. However, there is the opportunity to engage more easily, with C-suite and team leaders. This is because they are mostly in one place and able to focus and control their environments much easier. Buchule Sibaca, a Founder of SMTax, noted that their business development accelerated during the lockdown. They have been able to decrease the complexities of logistics. They did not need to travel to Johannesburg, from Cape Town, to secure meetings and get things done.
Options to increase transaction volumes or pivot in FinTech
Here are the three (3) things to highlight, to achieve increase in transaction volumes and retain business.
Assisting merchants
Talk to businesses to find out what is going on. Listen and understand the nuances to unlock opportunities. As an aggregator, strengthen your brand by being consultative and share some enabling content.
Partnerships
Be aware that most likely, there has been a shift in priorities with many partners in general. Most promising partnerships are moving quickly. In addition there are some partnerships that were not obvious, but have also seen exploration and development.
Orientating from physical to digital
Smoothness and quickness is a key consideration here. People are generally more accessible now that many are remote and in one place more often. Once we’ve understood what the challenges are, we explore the partnerships that will help implement quickly and effectively. The rest is for a collaborative, quick and iterative way to transition product, processes and people (team and customers) to the digital space.