After many weeks and months of social distancing, the world is now actively and audibly wondering when the economic recovery will begin.
The recovery, he contends, is already underway. The pandemic and the recovery aren’t two separate events that will happen in sequence — but are two connected happenings playing out contiguously.
“I’d even hesitate to use the word ‘recovery’ because it implies that there’s a stop to the crisis and a start to the recovery. I just don’t think anything like that is going to happen. In fact, I’d say that in a way, the recovery started on day one of the crisis,” Forestell told Webster.
Started, he noted, in the form of the adaptations that consumers, merchants, workers and businesses made to their habits and behaviors and in how they flipped to digital nearly overnight. Digitization has been the trend of the last two decades, but the last several weeks has fast-tracked the timeline on that transformation dramatically and likely irreversibly. Consumers have learned to like substantial aspects of their new digital lives, which means the digitization of society will keep right on accelerating even as its phased reopening commences over the next several weeks and months.
“Our job [at Visa] is to make those adaptations as easy, seamless, secure and fast as possible,” Forestell said, adding that what he and his colleagues at Visa are seeing is that the other side of recovery won’t look like what existed before, at least concerning commerce and payments.
That’s good news for consumers, great news for the payments ecosystem but a mixed bag of news for retailers, particularly the Main Street small- to medium-sized businesses that have been, as a group, slow to embrace digital. Meeting consumers and transacting with them in a mostly digital world, is not only important now, but has become an immediate priority. It’s also somewhat unfamiliar ground and one of the reasons, Forestell said, that Visa, along with its partners, is launching a series of initiatives over the coming weeks and months to help SMBs build what’s next, instead of trying to get back to what came before.
Doing that, he said, is a partnership play, working across the payments ecosystem to help SMBs quickly and smoothly shift their business online. Allowing them to respond to what Forestell said are the “six truths” of a digital world, defined by a consumer using remote payments to trigger a merchant interaction: Moving inventory and commerce online for consumers to see and buy; enabling choice in how consumers take possession of those purchases, including pickup and delivery of orders made online; integrating new payments options including subscription commerce to create new business models; enabling instant payments, including instant deposits of daily sales; enabling contactless payments acceptance; and managing chargebacks and disputes.
“There is so much innovation that can come out of this. [SMBs] are creative, innovative, entrepreneurial spirits,” Forestell noted. “If they just have the knowledge that these tools are available, they’ll take them, run with them and uncover commerce potential they never thought about before.”
Clearing The Digital Hurdles
Although businesses of all sizes have successfully made the physical-digital leap in the last several years and even managed to build full and rich omnicommerce experiences for their customers, Forestell told Webster, the majority of SMBs have only begun to clear that threshold. In fact, going into this crisis, many of these Main Street SMBs were offline-only players — and now suddenly facing a world where offline business, with a handful of rare exceptions, has been shut down and stayed that way for nearly two months.
The slow pace of adoption, he noted, isn’t technology — between tokenization, tap-to-pay, instant payments and a host of other innovations, the technology is available and accessible. An increasing number of players now offer turnkey and customized solutions for specialized verticals that make the consumer-facing sales experience slick and straightforward but integrate fully into the back office to manage inventory, invoicing and scheduling.
No matter how antiquated the system or small the shop, Forestell noted, there is almost certainly a technology on-ramp.
The challenge, he said, is the “cold-start” problem and getting those SMBs to make that first step into digitization.
“I don’t think there’s that much of a challenge in almost any vertical at this point in facilitating digital commerce. But the technology exists; the capabilities exist. It’s clearing through the backlog and making it happen,” Forestell noted.
Powering The Pivots
The world we live in six months from now, Webster and Forestell noted, might be a place where one has a monthly subscription to their favorite local restaurant to deliver them a meal right off the menu once or twice a week. “Eating out,” Forestell joked, could be something we do more of around our dining room tables then the dining tables in those restaurants. A business shift — and a new consumer experience — made possible with access to the right digital platforms.
Whether or not dining out becomes dining in, the world, he noted, is certainly going to include a consumer who has radically upped her digital sophistication in a host of ways already emerging, not to mention things that are likely still taking shape. Contactless payments were desirable for many reasons before COVID-19 — but they will now be associated with health and safety, something PYMNTS data shows over and over again is something that concerns consumers of all demographics.
— VisaNews (@VisaNews) April 16, 2020
The world will also include merchants who have upped their digital sophistication, now keenly dialed into the ways that digital payments can help manage their businesses more effectively, including their cash flow. The entire world, Forestell noted, has gotten an object lesson in the importance of liquidity of late and consumers, small businesses and big businesses realize the need to access and move money digitally in real time with security.
“There’s no reason merchants can’t get access to their digital sales on a daily basis, or pay their workforce on a daily basis, instantly,” Forestell said. “All these things should happen in real time and all too often they just don’t yet — that will have to change going forward.”
It will also mean giving these Main Street SMBs access to the tools that can help them navigate new business realities, including processing and handling disputes and chargebacks. Visa has already seen the signs. He noted that in the current high-tension, uncertain environment, there is a lot more room for misunderstanding between merchants and consumers. Although those exacerbating factors will fade in time, in a world where more contacts are digital, there will be more room for misunderstandings — and a need for a more efficient way to resolve them.
“There weren’t that many opportunities for there to be a misunderstanding between me and my local restaurant when what I did was sit down, order some food, eat it, pay for it and leave. As we move to this remote environment — which is where everything is heading — there’s a lot more opportunity for misunderstanding.”
Forestell told Webster that Visa and its partners recognize the task ahead and the urgency associated with helping SMBs recognize that although the economy will recover over time, it’s never going to reset to the “digital optional” point where it was at the start of the year. And that the entire commerce ecosystem will be better for it.
“I’m a big, big believer in the digital medium being so adaptable, customizable and so context-rich that it almost always results in a better customer experience,” he said. “It’s hard to believe that there’d be any reversal at all, but rather a progression of more innovation and richer customer experiences.”