July 9, 2020
Businesses urged to use the new financial year to review and crisis-proof their payments systems
Leading end-to-end payments provider Monoova is urging businesses to review their payments systems amid changing business models and consumer payment habits in the wake of the COVID-19 lockdown.
Monoova Head of Growth Tyson Hackwood says most budgets forecasted at the start of the 2020 financial year were “blown out of the water” by the pandemic, but those with good digital payments systems and processes in place were better able to weather the storm.
“Digital payments have become increasingly important as many businesses have pivoted their service delivery to stay open during lockdown, from restaurants fully embracing takeaway to physical gyms migrating services online and via fitness apps,” he said. “The growing concerns around touch payments have also caused businesses to find new ways to monetise their goods and services.”
“At Monoova, we think of the new financial year, as an opportune time for businesses to consider how to ‘COVID-proof’ their payments system by ensuring it is prepared for any future crisis (health or otherwise) that could cause disruption, and able to handle any fall-out of the post lockdown recession.
“The ability to accept faster payments is becoming increasingly important. Businesses can no longer afford to have a lengthy debtor list in this challenging climate,” he said. “For instance, we have seen a sizeable increase in micro-wholesaling across many sectors during this time as businesses make smaller, more frequent transactions with suppliers to meet changing customer demand.”
Upfront payments set to grow as businesses look to minimize risk
Mr Hackwood said leveraging more efficient payment structures like the New Payments Platform (NPP) should be a priority for Australian businesses this new financial year.
“Through a faster payments system enabled by the NPP, businesses can accept partial payments from customers before the delivery of a good or service. Through partial billing, a business’ exposure to loss is diminished with some of the costs of materials or delivery already covered.
“Businesses also have the option to encourage upfront and on-time payments by prioritising service delivery or offering an enhanced service experience or discount to customers. We expect more businesses to offer partial and upfront payments to customers as they navigate this challenging climate.”
While use of the NPP is steadily growing with more than 384 million payments processed since launch1, Monoova said many businesses still do not have full visibility of the benefits of the system and continue to heavily rely on more traditional payment systems like credit cards and PayPal.
“For businesses dealing directly with customers, there is simply no faster payment method than the NPP – and all that’s needed is an email or mobile phone number to get started,” said Mr Hackwood.
“We recognise how difficult it is for businesses to get the right advice on payments systems. Monoova is working alongside its clients to help close the education gap for businesses across Australia.”
Monoova’s top tips for business to improve payments systems this new financial year:
1. Reserve Bank of Australia, Two Years of Fast Payments in Australia, March 2020.