As the COVID-19 situation continues to impact businesses and lives worldwide, we are here to support you as best as possible.
Maria Prados, VP of Retail and B2B at Worldpay has answered some of the key questions impacting B2B at the moment.
Q1. How is B2B being hit by Covid-19?
A: Many B2B companies are likely to have one or more key aspects of their supply chain disrupted, impacting businesses across the globe. From the beginning of this crisis, manufacturers of items like electronics and automobiles that rely heavily on China have been severely affected. Now that the pandemic has got a grip globally, the impact on B2B is pervasive, with companies cutting spending to accommodate stripped down services or equipping swathes of their workforces to work from home. As a result, businesses are reducing non-essential spending and investments. The focus for many is survival first and foremost, and beyond that, damage limitation.
Q2. How different is the picture based on the industry?
A: Like with Retail, different B2B sectors will be experiencing different challenges, depending on their industry and reliance on human capital. It’s hard to keep a production line working whilst social distancing, but technology companies may fare better. However, those producing Fast Moving Consumer Goods (FMCG) may experience increased demand as they’re producing essentials people need. Then the issue is how to keep production going safely.
Q3. What can B2B companies do to help the situation?
- Look into automating processes
They should be looking at how to automate the basic processes to increase efficiencies and be ready to scale fast when the new normal comes. By automating payments for example, you can free up time to concentrate on the things that matter most to your business, like expanding sales channels, reaching new customers and taking and processing orders.
- Go straight to the consumer
If applicable, look at your B2C channels. Retailers may be struggling to fulfil certain demands: you can build your relationships with the end consumer by letting them come straight to you. Loyalty forged during this period may be long lasting, changing how people shop.
- Enable new ways to pay
Allow new ways for your customers to pay you that take into account their changing needs. Some companies might need flex around how they pay; others may want to pay quickly. Make sure you can accommodate both while you maintain a healthy cash flow.
- Proactively manage your credit and collection risk
It is inevitable that collection risk and bad debts may increase with the slowdown of the economy – particularly worrying if you are dealing with small and medium enterprises. To minimize the risk, you may want to review their existing payment terms.
Consider offering credit cards as a payment option. You will be able to receive the payment earlier reducing the collection risk. Plus, your buyers get to enjoy up to 50 days of extended payment terms (longer than the existing payment terms of, for example, 30 days), while enjoying the rebate/points from their credit card issuers.
- Build your networks and your credibility
The strength of your business extends further than your product or service offer. Ensure you’re adding value to your networks by sharing your expertise, solidarity and support. People have more time to listen now, so use this time to build your future customer base, even if they aren’t currently spending. Investing your energy in cultivating strong, sincere relationships will set you in better stead when this period is over.
MERCHANT SERVICES SCAM ALERT
We have received reports of businesses being contacted by callers claiming to be representatives of a merchant services provider. These callers are telling merchants that their current provider is shutting down due to the COVID-19 situation. They proceed to tell the merchant they need to switch processors to continue accepting electronic payments.
If your business is targeted, please know that this is part of a scam and not legitimate. Worldpay will continue to be your trusted partner and support your payment processing needs.