Digital Transactions Authoritative, insightful and timely information for payments professionals
The Covid-19 pandemic sent shock waves through nearly every industry—not least the global supply chain. Every piece of the supply chain was impacted, from manufacturing and production to fulfillment. And because supply chains are the backbone of commerce, the implications radiated beyond supply-chain hubs and essential workers to also impact daily consumer behavior.
However, shocks to the system (like Covid) often drive lasting and positive change. If we can take a step back and analyze what we’re seeing, we’ll recognize from a supply-chain payments perspective that the pandemic helped solidify what was already in the works: modernization. This benefit comes with increased safety and efficiency.
Contactless payments have been around since the 1990s and have only increased in popularity as banks, credit card companies, merchants, and retailers have come on board with solutions. Anecdotally, this makes sense. When is the last time you paid for groceries with cash or check? The average consumer today relies less on checkbooks and cash and more on payment platforms available in the marketplace.
Over the past year, there’s been a greater sense of urgency to re-evaluate how payments are completed. This is because scientists discovered coronavirus was able to latch onto physical, traditional currency like cash, checks and coins the same way it survives on other surfaces, according to CNBC. This sentiment was echoed by the World Health Organization, with a recommendation that consumers pay in a contactless way rather than with cash. As a result, digital payments are now used for the sake of safety, rather than just sole convenience.
This same digitalization trend could be seen in the supply-chain ecosystem, albeit at a slower pace. With the onset of the pandemic, grocery and supply-chain centers had to quickly adopt rigid safety policies, including payment protocols. This meant carefully monitoring access to facilities and ensuring all transactions were as safe and remote as possible.
One implication of these standards was that professional truck drivers weren’t allowed inside warehouse and distribution facilities to complete payments. Instead, drivers had to rely on contactless payments. Many drivers and supply-chain workers had used a remote checkout solution prior to the pandemic because of convenience and to save time. These payments are now viewed with greater urgency.
Supply-chain essential workers were arguably the most impacted by the pandemic when it comes to payments. Traditionally, businesses in the warehouse, trucking, and logistics industries have relied on tedious payment processes, like various paper forms, that leave room for human error or even fraud in some instances. By making the payment process digital and instant, these payments become simplified, processing time is reduced, and customers see maximized revenue collection.
Supply chains are extremely vulnerable to ripple effects. For example, the onset of Covid set off a chain of manufacturing and fulfillment events that made it difficult for consumers and essential workers to find personal protective equipment and basic household necessities like cleaning supplies.
On the flipside, efficiencies can also create ripple effects that carry out through the entire supply chain. Deploying a digital payment solution can improve efficiency at warehouse locations by allowing drivers to unload goods quicker. The benefits of this efficiency can be seen in reduced facility backups and maximized pay for drivers, all while getting goods to facilities (and consumers) in a seamless way.
As we look ahead to building smarter supply chains and ensuring lasting recovery, digitalization will be key, and payments are a vital piece of that transformation. If finances aren’t digitized, it’s typically indicative of other back-end problems at an organization and makes it harder to run more sophisticated businesses or apply for loans. Digitized payments provide greater visibility into business operations and allow for a more stable business and efficient payroll system.
The pandemic ushered in a sense of urgency when it comes to modernized payments, ensuring this supply-chain shift will have lasting permanence beyond Covid recovery. Those without a strategic payment solution will remain vulnerable and less equipped to meet the modern demands of today’s supply chain.
—Robin Gregg is chief executive of RoadSync Inc., Atlanta.
