The news over the past week, as COVID-19 pandemic unfolds as both a public health and economic crisis in the U.S., has brought new meaning to the phrase “blink and you might miss something” as the dominos have continued to fall for the last seven days.
As the number of cases, and number of deaths, have climbed, social distancing measures have become more strict to the point of becoming shelter-in-place orders in some areas. That in turn has led to more businesses being closed, and more workers laid offers and furloughed, which thus spiked unemployment numbers to a new all-time single week record of 3.2 million.
But for all the genuinely worrisome news out there this week, OnPay Solutions President and CEO Neal Anderson told Karen Webster during the latest edition of The Week In Payments, there was also a fair amount of encouraging news — from direct relief efforts to the power of the digital infrastructure and the hope that what has been a deeply unpleasant crisis might just be the push an awful lot of firms needed to finally bring their payments processes into the 21st century.
Help Is On The Way
In a week where the competition was fierce, the biggest headline news was the roughly $2 trillion in funds passed by the Senate in a coronavirus economic relief package now on its way to the House and ultimately the president’s desk. The stimulus bill is intended to staunch some of the unprecedented economic damage done by the COVID-19 outbreak.
“I really have to give kudos to the federal government for recognizing the need certainly for small business, for citizens and for larger enterprise firms. I don’t think anybody could have predicted, just three months ago when we were celebrating the holidays, that one person getting sick 8,000 miles away could literally affect almost everyone on the entire globe,” Anderson said.
The government assistance, he said, is going to be critical — from the small mom and pop shops gutting it out on main streets across the country to the enterprise and medium-sized firms OnPay more typically works with. Especially, he noted, in segments of the economy where the damage has been acute, like airlines, where customers are physically barred from using their services.
Government assistance isn’t all of this, as the wave of firms drawing down on their credit lines and making sure they’ve got liquid funds at hand has been a vital resource, he said. And then there is the equally critical, if slightly more difficult to quantify, commodity of patience, he added — patience on the part of commercial and consumer landlords, and underwriters holding loans.
“Some of this is really about a matter of timing. And if it is just a two, even a three-month, event and everyone can see there’s a light at the end of the tunnel, the smart thing to do is be patient,” he said. “The reality is once these companies can come back to work and can start their businesses back up from where they left off, they will start paying rent again.”
There might have to be adjustments made to loan and lease terms — and payments added onto the end — but the critical idea to keep in mind, and limit the carnage that will be caused, is to realize the question is when payments are going to happen, not if they are going to.
The Web Comes Through
And while it might sound a bit optimistic to imagine a world where everyone goes back to work and starts paying bills again, Anderson noted that the steady drumbeat of bad news has the unfortunate downside of drowning out the good. The world at the moment is not devoid of reasons for optimism, even if they do feel in particularly short supply.
The web, he pointed out, has held up remarkably well — given how much of the world has had to go digital on dime, more or less overnight, because of the coronavirus crisis.
“The internet as a whole I don't think has ever been stressed like it is today and the good news is I don’t read about anybody complaining about bandwidth and speed or the technology to work from home not being there when they need it,” he said.
It is a particularly heartening accomplishment, he said, when you consider that alongside all of those now working at home, millions of students now are in virtual school logging on at the same time as their parents — and the backbone infrastructure is holding up so well.
Will it inspire a massive conversion to work from home? Maybe, Anderson said, noting that he is and always be an “in office team” kind of guy, because he thinks there is something to that collective experience. But what the successful high-stress field test the digital infrastructure is getting right now will allow is for firms to be more flexible when they consider how and where to place their workforce and structure their teams, he said.
And that, he said, will more than likely be an advancement for the better.
He and Webster also agreed, however, that parents nationwide will soon leap at the opportunity to send their kids back to good, old-fashioned analog schools just as soon as they are legally allowed to do so, no matter how solid the infrastructural support for home-based telelearning is.
Speaking of jumping on opportunities …
Killing the Check — For Real This Time
While COVID-19 has caused an incredible amount of damage and misery in its brief but potent reign of terror, it might just end up causing one casualty that no one will miss.
The paper check.
Long since abandoned by consumers as a relic of a pre-digital payments era, the check persists, hanging on in the world of government based and B2B payments. Or at least it did. A whole lot of public officials and CFOs, Anderson noted, are about to get a crash course in just how inefficient, outdated, insecure and expensive using checks can be. Especially in an emergency such as both groups are facing right now.
“I think CFOs and controllers are going to come back to work kicking themselves that they still have check processes in place,” Anderson said, noting that an awful lot of OnPay’s business during this particular crisis is now in emergency check printing for firms whose employees are all now remote and who have no way of printing, packaging or handling their checks. Until now, he noted, checks felt like the “easy way” to do it — because to send a check all that’s needed is a name and address. A direct disbursement, on the other hands, needs a digital account to go to and a way to authenticate that the person who owns the account is also the person or entity the payment is meant for.
For a long time, he noted, businesses have stuck with checks purely over that piece of inertia — they just didn’t want to take on the trouble of collecting and verifying all of that account data from their seller network. Being caught flat-footed with a physical payment means without a physical workforce to manage it — or facing the possibility of having to send a few hundred million paper checks to U.S. citizens who needed that money a week ago — seems likely to create a large-scale opportunity for a lot of players to get religion when it comes to digital disbursements, Anderson said.
“I think everyone is now very awake to the idea it is time to move on from the check and fully embrace an electronic payment network here in the United States,” he said.
Because necessity is, was and always will be the mother of invention. The needs these days are many, and they are pressing. And while one can regret the circumstances that have brought it on, it is also possible to be impressed at how inventive the entire world is getting in response.