If there’s one thing for certain for small business today, it’s that nothing is certain.
Flexibility will be essential to survival, and the pressure is on for small- to medium-sized businesses (SMBs) and financial service providers to migrate online as their customers continue social distancing. Travel companies are at a virtual standstill, and business across all industries is a far cry from what it used to be.
Prajit Nanu, CEO at Nium, recently told Karen Webster that companies should probably get used to the idea that what was once considered "normal" may never return. But for many businesses, that presents a new chance to pivot or adjust business strategies.
"It all starts with accepting that the world as we knew it in 2019 is no more," he said in a recent discussion.
Pinpointing the Opportunity
While certain markets are indeed thriving — in particular, eCommerce, digital learning and online gaming — Nanu noted that some businesses will face greater friction than others when adjusting to the reality of a market in which physical interactions with customers aren't likely to return for some time.
That interaction includes the way individuals both shop and pay for goods, and for small and micro retailers, the migration online is crucial to not only preserve revenues throughout the pandemic, but also to prepare for the new normal of customer shopping and payment habits.
It's unlikely that post-pandemic, shoppers will immediately flock to brick-and-mortar stores, pay with cash, and stand in lines, said Nanu.
In preparation for this shift, he added, small retailers have been approaching service providers like Nium to facilitate this offline-to-online migration, seeking not only eCommerce-as-a-Service providers, but providers that can also facilitate the ability to accept and send payments digitally and online as well.
Finding New Revenue Streams
For financial service providers as well as SMBs, there is also the opportunity to open up new revenue streams as a result of the inability to service customers in-person. That's where Nium's Remittance-as-a-Service offering comes in, explained Nanu, likening the product to a "Shopify for traditional remittance services."
While consumers and businesses are no longer seeking physical locations to send and receive cash, particularly across borders, the demand to move funds between friends and family around the globe hasn't slowed.
Although banks in Singapore and other markets around the world began discussions of becoming "branchless" well before the pandemic, as Nanu explained, the collaborative as-a-Service approach can accelerate a transformation that is no longer simply strategic, but an absolute necessity for many service providers. And for some SMBs whose traditional revenue streams have otherwise dried up, implementing remittance services on their own digital platforms can be a vital lifeline of capital in troubling times.
Enabling finserv and non-finserv companies to white label a remittance technology means "you're giving them a platform that allows them to move money digitally and build payments," said Nanu.
Embracing Flexibility Amid Uncertainty
For the businesses that are able to survive the market downturn, their migration to facilitate online commerce, provide global remittance services to their own customers, and send and receive payments between their own business partners and employees digitally will position these firms to thrive in what's likely to become a world where queues at the storefront are an anomaly.
Companies in the travel industry are in an especially precarious position, said Nanu, pointing to one Nium client, a company with 40 percent revenue growth pre-pandemic and whose business today is essentially "zero."
The travel industry's troubles are hitting banks, too, which have seen that users aren't as willing to use their credit cards for travel rewards as often as they once were. By collaborating with these financial institutions, Nanu said Nium can also open up new revenue streams by wielding SMB credit cards rather than bank transfers to move funds, landing more transaction volume on card products while enabling payers to be able to finance that transaction.
This kind of flexibility in how businesses service their customers and embrace the digital ecosystem is imperative for company success today and tomorrow. It's also key for Nium, whose turnkey remittance and payments services are facilitated by application programming interface (API) integration.
Nanu noted that this is in stark contrast to other traditional remittance service providers that are largely brick-and-mortar businesses often dealing with physical cash — although, he added, Nium positions itself as a complimentary service provider to these players, not a competitor.
For these financial service providers, as well as SMB retailers, travel service providers and companies of all sizes, industries and geographies, being able to pivot or adjust market strategies will differentiate the companies that survive from those that don't. Many factors remain uncertain, from the future of the travel industry to consumers' willingness and ability to eventually congregate again. As such, embracing technology that can flex with businesses' shifting needs can be vital.
"Anyone who believes that he knows what life will look like post-COVID is crystal ball-gazing," said Nanu, "because I don't think anyone knows the answer yet."