E-commerce during a pandemic: surviving the cash crunch with digital payments

The events of the past few months have been unprecedented in global commerce. The closure of high street stores across much of the world on the one hand gave a massive boost to online sales, however, at the same time the pandemic has stretched supply chains, and supplier relationships, to breaking point. Although cash is king once again, it doesn’t provide any kind of insurance if goods and services aren’t delivered by suppliers.

With such little room for error and under huge financial pressure, e-commerce players should turn to digital platforms. Not only do they deliver immediate payment to ease supplier cashflow concerns, but they can also offer recourse to refunds in the event of disputes, and even generate additional revenue on each transaction.

Supply chain pressure

These are challenging times for businesses. The delicate ecosystem of buyers and suppliers has always been exposed by legacy payment systems like BACS and cheques. These traditional processes can incur extra bank charges and administrative overheads, and are blighted by human error, which can lead to delays and payment misdirection. Add the extra pressure of the COVID-19 crisis and you have a recipe for serious business disruption.

Online firms like daily deals site Wowcher, which has a huge network of suppliers, rely fundamentally on these businesses for their revenue. Any B2B payment problems could ultimately impact the end customer experience, and even lead to cash shortages at supply-side companies which may imperil long-term survival. Needless to say, it makes business sense to ensure that suppliers are paid as quickly and efficiently as possible.

Time to go digital

One answer is to use digital payment platforms like Virtual Account Numbers (VANs) which offer a highly efficient, low-cost, and low risk way to pay suppliers. Each VAN is a 16-digit, single-use number backed by the Mastercard network. Rich data and controls can be added to each transaction to support automatic and immediate reconciliation, improve auditability, and reduce the risk of fraud.

Even better, for ecommerce providers there is the added benefit of having all transactions supported by the chargeback scheme. That means that in the event of non-delivery or non-performance finance teams have a clear mechanism for recovering their funds. Optal also offers cash rewards on each transaction, helping ecommerce businesses create new revenue streams at a time when many are struggling financially.

Digital is the future. For e-commerce providers, traditional bank payments are an awkward legacy hangover from decades past which may not fit well with the ecommerce digital journey for retail business — adding cost, risk, and complexity.

We’re all going through tough times at the moment, but unlike many previous financial crises, we know that this time, recovery is just around the corner. This makes it more important than ever that organisations look after their suppliers throughout this difficult period by ensuring bills are paid quickly and protect their own businesses against supplier non-performance. It will benefit everyone in the long run.

Contact details:

Bradley Eccleshare
Chief Marketing Officer

M +44 0 7525 929198
T +44 0 20 3892 4928

About Optal Ltd

Optal is re-inventing how payment processes work across complex industries. By stripping payment processes of their customary inefficiency, Optal helps companies boost profitability across a growing number of sectors around the world.

Optal issues Mastercard branded payment products, driving its focus on developing and bringing to market, game-changing payment solutions. Optal’s working capital solution, Invapay, turns underutilised credit lines into a dynamic resource to manage cashflow.

“Invapay” and “Invapay solution” means Invapay Payment Solutions Limited, a private limited company in England and Wales, authorised and regulated as an Authorised Payment Institution by the Financial Conduct Authority under the Payment Services Regulations 2017 which is a wholly-owned subsidiary of Optal Limited.

Talk to us to discover how Optal can add value to your organisation.

General Enquiries: +44 (0)2038 924 928
Invapay Technical Support: +44 (0)3308 387 490

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