What is the likely impact of the virus on the business-to-business (B2B) payments?
If cashflow is the lifeblood of any business, then the B2B payments system represents the arteries and the veins. For a body to be healthy, blood must flow efficiently to and from the heart. For a business to be healthy, cash payments must also move efficiently in both directions.
It may well be that 13 March 2020 will be seen as the day on which the COVID-19 virus became a truly global pandemic. That was the day that the World Health Organisation noted that Europe had become the epicentre of the pandemic, with more cases and deaths than the rest of the world combined, other than China.
Now that the virus is manifestly not a China-only problem, and governments worldwide are taking steps to protect people and economies, it is worth asking what this means for B2B payments.
Just as the COVID-19 virus is stressing the bodies of infected people, so it will likely also put B2B payments systems under stress. In 1Q20 money will, as a result, flow in a completely different way relative to any of the quarters of 2019. The Global Financial Crisis (GFC) of 2008-09 also generated a lot of stress within the world’s financial system, but could be addressed by the authorities with radical monetary and fiscal policies. COVID-19 has generated a wave of drastic changes outside financial sectors.
Some businesses have already experienced a drastic fall in activity - with the result that they are making and receiving far fewer payments than previously. Obvious examples include hotel chains, airlines and many other businesses that are involved in some way with the global tourism industry. This is a part of the stress.
The consequence is that counterparty risk is much more important than previously. In plain English, a key question is: will the business that is due to make a payment to my business in two days time still be in operation? In the world of payments, the related question is: what happens if my B2B payments services provider goes bankrupt?
At Safenetpay, this is something to which we have given a lot of thought. These abnormal times require extra measures. We have been working with our third-party service providers to better understand the impact of the COVID-19 virus (and official responses to it) on their businesses.
We have contingency plans in place and anticipate no disruption to the services that we provide our clients. To protect the safety of our employees and their families, all our colleagues are working remotely from home which enables us to provide a ‘business as usual’ service to all our clients. Our customer support team, and the systems that they use, are also operating as normal.
Besides, we are a licensed payments services provider headquartered in London, where we are authorised by the Financial Conduct Authority (FCA - the UK’s main financial regulator). Our services comply with the strictest security standards - which protects your and your clients’ money. As a client of ours, you receive a UK account number with a sort code and an EU IBAN. We are a part of the SWIFT network and a MasterCard-registered payment facilitator. As our client, you benefit from the safety that comes from long-established and well-regarded payments infrastructure.
Further, we keep your money in ring-fenced accounts in top-tier UK and German banks. Your money is completely separate from the money that we need to carry out our business. Even if we were to go bankrupt, your money would be completely safe.
What security does your B2B payments services provider offer?