Payments Association’s announces ‘Weathering the Storm’ consultation on the impact of COVID-19
London, United Kingdom – 07th April 2020 – The The Payments Association, which encourages collaboration and innovation within new and existing finance companies, today announces the outcomes of its first COVID-19 consultation.
The detailed assessment, entitled Weathering the Storm: The impact of COVID-19 and what the payments industry, government and regulators should do about it emphasises the seismic change that COVID-19 will have on how we use payments to live, work and shop and the effect this will have on the shape and size of the payments industry.
The Payments Association, which represents 130 member companies that are responsible for transacting more than £6 trillion annually across the payments value chain, completed the report along with some of the most prominent leaders in the sector. It was developed in consultation with the Payments Association’s Advisory and Ambassador Boards, underlining a five-point plan which is designed to aid recovery, foster resilience and promote leadership during these challenging times. These include:
- Protecting the vulnerable
- Planning for an interruption in growth
- Taking a customer-first approach
- Regulators playing a loose-tight role
- Leading from the front
Protecting the vulnerable – Some groups in society are finding it challenging to pay and get paid. Currently, there are 13 million people in the UK who are financially excluded and in vulnerable groups, especially the elderly who are further impacted by the pandemic. Those people who are self-isolating and relying on others to shop or the millions of who are digitally excluded must be catered for in new and creative ways and payments companies must adapt their policies and services to mitigate this.
Planning for an interruption in growth – It is also important to plan for an interruption in growth. The stability of the payments industry is not challenged but growth and profitability will be, especially over the next two years. Analysts are forecasting activity could drop by as much as 8% to 10% of total revenues. This means the industry needs to plan to keep thriving and to not pull up the drawbridge to investment, visibility and innovation initiatives to mitigate a slower recovery after the pandemic.
Taking a customer-first approach – Additionally, a customer-first approach must be at the forefront. The payments industry is already adapting to changes in how it manages its customers, finances and operations, but it will take a long time to recover and require creativity and understanding.
Regulators playing a loose-tight role – The report also sheds light on the role that the regulators must play. The regulators could adopt a loose-tight strategy by showing flexibility in some areas and increased vigilance in others. For example, industry consultations should be postponed, but conforming to capital adequacy ratios or deadlines for SCA compliance should be adhered to vigilantly.
Leading from the front – Finally, it stresses the importance of leading from the front. It has uncovered inspiring illustrations of the industry stepping up to the challenge and leading by example in support of COVID-19 in creative and inspiring ways. Never at any other time in our history has leading by example for business, society and the economy been so important as now.
Commenting on the launch of the report, Neira Jones CEO, Phoenix Edge Ltd & Payments Association Ambassador, said: “It was a great privilege to have the opportunity to work on this project and the The Payments Association is to be commended for doing it so fast: not just an insightful paper for those who want to understand the impact of the crisis on our industry, but real help, actions and commitments, where it matters!”
Tony Craddock, Director General of the The Payments Association, added: “It’s not going to be plain sailing. We have to weather this storm as an industry. This paper identifies how we can do so, and then what needs to happen to ensure people can continue to pay and get paid, as we move into the recovery phase.”
Andrea Dunlop, Chair of the Payments Association Advisory Board, said: “In these unprecedented times, it does humble me to see the Payments Community come together in this way. Payments is an essential service and it’s important that we as a community ensure resilience during this challenging period. I hope that this paper helps to highlight the impacts that the crisis has on the Industry and some areas where we as an Industry can do more to make a difference.”
She added: “It’s important during this time that we embrace community and do our very best to help the most vulnerable in our society. Good leadership and social responsibility will go a long way with employees and customers. I believe that companies that go out of their way to help employees and their customers will come out stronger after this. Social Capital is the most needed currency now.”