‘Cash is king’ is a well-known adage; looking at this statement, quite literally, it may be safe to say that this is not the case anymore.
People should have choices in life, and in the payments space, the concept is no different.
The pandemic has pushed us all to look at the way we make and receive payments. In a short period, the way we handle cash has evolved overnight.
Covid-19 has put a lot of businesses of various sizes in a tough financial position. It came as a shock to many, yet has accelerated a trend towards digitalisation, resulting in an increase in online transactions and contactless payments.
Consumers and businesses have similar needs from their payments provider; convenient, effortless, regulated and secure is the bare minimum required to achieve success.
On top of that, consumers may want to see a loyalty scheme attached to their payment method (you may think of corporations such as Tesco or Sainsbury's who already offer a Clubcard or Nectar loyalty scheme alongside their credit card offerings). For business owners, the value will be found in a payments solution that offers faster settlement time and lower transaction costs.
Giving people more payment options means businesses - who are the backbone of local communities - will have more opportunities to receive revenue quickly and at a lower cost when selling their products and services.
Payments account for more than 35% of global financial services revenue. It's clear that the concept of cashless - pushed by sanitation needs during the pandemic - is thriving (although we cannot forget that many communities are reliant on cash as a primary method of payment).
The rise of mobile banking has helped fuel this behaviour change; more people have access to mobile payment methods now than ever before. The amount of choice and speed at which you can access these options have also contributed towards this thanks to the rate of innovation coming directly from fintechs taking advantage of the opportunities Open Finance has thrust upon the industry.
This change in how we work with payments is beneficial to the UK economy as well. As a quick overview, the UK economy has had some of its most extreme highs and lows ever experienced in recent memory. These drops have had a knock-on effect for small and medium-sized enterprises (SMEs). SMEs account for a large portion of job creation and development of the UK economy. Though some businesses have had to close their doors, the pandemic increased the need for adaptation and transformation within the finance sector, particularly payments.
The unexpected nature of the pandemic offered a rare opportunity and increased need for a mass amount of businesses to become even more financially savvy, and consider new, up-to-date payment options. Many businesses pre-covid may not have had a strong online presence and platform, yet with the lack of in-person customer experiences, the majority of establishments augmented their social media presence to increase their sales forcing them to look at different types of online payment methods, thus proving that there is an appetite for a change in payments both online and offline.
Over the last 18 months, this digitisation and change in behaviour we have experienced in such a short amount of time may have taken a few more years to happen had it not been for the shift in lifestyle behaviour brought on by the pandemic.
Having said that, some things will remain the same; the need for a robust service and a deep level of trust necessary between businesses, customers and the financial provider.
As we see it, the new and old will and should coexist to cater for all audiences, including those who may not have access to new technologies. The payments revolution is taking place as we speak. Fast forward another 12-18 months and we will yet again exist in a very different financial world as the pace of innovation around payments services will only continue to accelerate.
About tomato pay
Community has never been as important as it is today, and watching the business and sole trader community struggle throughout the past year has spurred us on to take a more community-led approach to our business.
tomato pay is a simple, QR-code based payments and invoice app powered by Open Banking and built on our tomato pay API platform which offers both AIS and PIS capabilities.
Businesses and sole traders can benefit from our low-cost QR-code payments solution with no hidden fees, which saves them money compared to their current payment systems, gives them instant access to their money as cash settlement happens almost immediately, and access to all of their bank accounts in one place.
Businesses and sole traders can benefit from our quick and easy invoice solution. Invoices can be created within the app, with the option to give discounts and late penalties (pre-built into the app using gamification and behavioural science) and send nudges to remind customers and clients to pay. Plus, as you connect your bank account, payments are embedded within the app - so no need to give your bank details, and receive money owed instantly into your account.
Everyone can support their local communities thrive by paying their neighbourhood businesses in a cashless, hassle-free way. Join the waitlist.
tomato pay is an FCA-regulated authorised Account Information & Payment Initiation Service Providers (AIPISP) provider. You can find us on the Open Banking Directory, and on the FCA registered list here.