The Impact Of The Pandemic On Industries: A Payments Perspective
This is according to Andrew Hardie, CEO of Pay@, a leading bill payment aggregator offering secure payment solutions. “Having a multitude of clients operating across a variety of industries has afforded us the unique ability to not only see the effects of the crisis and lockdown on certain sectors, but to also provide them with a broad-spectrum of bill presentment and payments solutions to manage their liquidity at this time.”
He unpacks some of the fascinating trends that took shape over the course of 2020:
TV comes out tops
The hard lockdown between March and June saw South Africans – and indeed those in similar lockdowns around the world – turning to their TVs as other entertainment alternatives were unavailable. This resulted in a 24% spike in satellite TV payments in March, compared to February 2020. In fact, MultiChoice Group CEO Calvo Mawela recently revealed that the group added 1.2 million 90-day active subscribers over the last six months, representing 5% growth year-on-year.
Insurance is on the up
After a small drop at the outset of lockdown, Hardie and his team noticed an uptick in the number of people acquiring life insurance and funeral cover. Between May and now, there has been an increase of 163% in average premiums collected per month, with this trend showing no sign of slowing down. One contributing factor was the fear caused by the Coronavirus, which saw many people taking greater action towards protecting and caring for their families’ futures, should something happen to them.
Money transfers surge
During the initial five weeks of lockdown, Pay@ also experienced a severe drop off in money transfer type payments; but thereafter transaction volumes have grown roughly by 250%. The closing of South African borders meant that the market could not access informal transfer methods, such as taxi and bus drivers delivering cash to loved ones in other countries. Instead, people looking to send money abroad turned to more formal and regulated channels, which is one of the reasons for the increase seen there. Interestingly, there hasn’t yet been a decrease in transaction volumes, despite the borders having reopened, with remittance payments still growing month on month. This is likely due to people returning to work and making up for those months when they didn’t have an income.
Payments in the municipality sector have remained stable, although they did suffer a 13,4% decrease in terms of the transaction volumes when the pandemic first hit. A major factor contributing to this was the uncertainty at that point in time, which saw people prioritising paying for food over making municipality payments, particularly amongst low-income earners. Once the nation had more clarity, we saw municipal payments increase again to pre-lock down levels. Another contributor to the decrease was the confusion created by some municipalities providing payment breaks while others did not.
Some of the hardest hit industries in terms of bill payments at the height of the COVID-19 lockdown included travel, traffic fines, debt collection, and loan repayments.
“Since the country has progressed to more lenient lockdown levels, Pay@ has seen transaction volumes revert to pre-lockdown or better levels for all industry categories, except for the travel industry for obvious reasons. In fact, overall year-on-year growth of bill payment volumes and values was significant in 2020. In the new year, serious ongoing economic constraints could affect people’s disposable income and subsequently potentially bill payments. However, we continue to experience the opposite for now in terms of the month-to-month increase we are seeing in transaction volumes.
“More than ever, efficacy around the collection of bills is critical for the liquidity of businesses and we look forward to continuing to play a strong role in 2021 in this regard across all the industries sectors that we serve,” concludes Hardie.
For more information, go to https://payat.co.za.