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March 24, 2020Blog Posts

Digital Payments Soar Amid Coronavirus Restrictions

Wall Street Journal

Digital-payment services are facing a surge in demand as efforts to stem the novel coronavirus pandemic result in housebound shoppers stocking up on groceries, prescription drugs, audiobooks and movies online.

Many e-payment providers are falling back on contingency plans put in place to handle seasonal bursts in online shopping, such as Black Friday, in part by tapping additional on-demand capacity in the cloud, industry analysts said.

In Italy, one of the first countries to order residents to stay home in a bid to prevent the virus from spreading, e-commerce transactions have soared 81% since the end of February.

“The surge is already happening,” Aaron Press, research director for world-wide payment strategies at International Data Corp., said about the sharp increase in e-payments. He said merchants are dealing with challenges in handling the sheer volume of payment-processing needs, whether their payment services are in house or third parties.

Dayna Ford, senior research director at research firm Gartner Inc., said despite increased retail traffic, overall revenue in the e-payments market is likely to decline this year, as online retail gains are offset by losses for e-payment firms serving airlines or hotels. She said the crisis could accelerate the shift to online payments as more services reassess their reliance on face-to-face transactions.

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