How Payments will Combat Economic Uncertainty in 2023
From supply issues to soaring utilities costs, global businesses are now facing a very different environment to the challenges presented by the pandemic just two years ago. For those businesses based in the UK, political uncertainty, including the continued fallout from Brexit, three Prime Ministers, on top of a looming recession is all adding smoke to an already cloudy horizon as we enter 2023.
The cost of doing business is already rising – and we expect this to continue into 2023 as businesses enter a period of consolidation and cost-cutting to combat rising inflation and expenses. In tandem, the customer base will shrink as spending is scaled back.
Planning for this uncertainty is not easy. But as we step into the next year, agility will be key. Those that are able to react and adapt to new challenges and create a sustainable economic model for growth will be best equipped to survive. Crucially, taking advantage of the fintech and payments industry to maximise efficiency, cut costs and navigate changing regulations will be highly beneficial in creating a competitive edge.
Here are my predictions on how businesses will benefit from payment innovation and expertise in 2023 to combat economic uncertainty:
Cost-cutting efforts will push business towards payment solutions that facilitate speed of delivery and overall efficiency.
Inflation is the silent killer of businesses and personal wealth. That is why heading into 2023, in this period of economic volatility, businesses will be forced to take a step back and consider how they combat fluctuating costs while streamlining operations and responding to customer demand for reliability and speed of delivery.
We’ve already seen the Bank of England’s efforts to support businesses by raising interest rates, but next year, businesses will look towards the payments industry for more help. So much so, that businesses will increasingly adopt modern payment tools to build speed and efficiency into cross-border products and services – helping to manage liquidity with instant settlement, keep customers happy, unlock new revenue streams and offset inflationary pressures. By increasing the speed of cross-border products and services, businesses can ensure they reliably pay and get paid in real-time, every time.
Fundamentally, those who can modernise their processes successfully will be better equipped to survive this uncertain time with stable and reliable finances.
Payment provider innovation will allow businesses to accelerate their global ambitions.
Many, if not all, businesses aspire to operate globally – taking advantage of talent, market appetite, and regulatory opportunities around the world. However, international expansion is often part of the long-term roadmap – a goal that follows funding, momentum objectives, or customer acquisition.
But today’s economic challenges will see businesses accelerate these global ambitions in the relentless pursuit of growth. Opportunities to expand their customer base and drive new revenue streams become harder to ignore when combatting inflationary challenges and squeezed budgets.
As businesses adopt this global mindset, they will increasingly lean on payment providers as a reliable and flexible financial bridge into these new markets. With this support, businesses of all sizes will feel equal to larger enterprises, both in terms of resources and market opportunities. Unlike ever before, they will be able to leverage the same payment infrastructure to receive and send money in local currencies, at low exchange rates and in real-time. In turn, this will build trust with new markets and mitigate the effects of economic uncertainty.
As regulatory challenges persist, businesses will look for partners to remove the headache.
In 2023, businesses will become increasingly attuned to the complexity of changing global regulations. It’s here that payment providers will play a key role in removing compliance as a hurdle to international growth, customer acquisition or revenue generation.
Fundamentally, leaders want to spend their time focused on business growth, product development and customer experience. And so, managing different regulatory environments can quickly become burdensome and costly. Many do not factor into their roadmap that each market may require a new license to move money or different compliance standards for onboarding customers and verifying identities.
As being compliant and adhering to regulations is of utmost importance, it can ultimately draw attention away from more strategic endeavours that lead to growth. This means that as budgets are squeezed in 2023, businesses will want to ensure time and resources are spent on what will help, not hinder, the bottom line. The right payments partner will remove this headache, managing global regulatory compliance needs and requirements in real-time, so crucial resources and budgets are available to be allocated to growth.
Navigating uncertainty next year will require a considered approach. Businesses will need to consolidate both to drive efficiency gains but also to hone in on the most productive parts of the business. For many, payments industry innovation and technology will be key differentiator in mitigating economic uncertainty. The need to streamline the business, facilitate speed and reliability in payments and remain regulatory compliant under new frameworks will all push businesses toward payment providers. It’ll be these partnerships that will help businesses unlock growth opportunities and offset 2023’s cost pressures.