FinTechs can be valuable allies in times of crisis.
That isn’t surprising. We’re all intertwined in an increasingly global economy, and a geopolitical or economic crisis anywhere can end up having ripple effects everywhere else. The pandemic made that abundantly clear as supply chains around the globe were snarled after ships got stuck in bottlenecks.
But digital-native firms (including Payoneer) can bring a range of advanced technologies to bear that help companies solve those problems in ways that weren’t possible in an “offline” world, Allum said.
“Many of the efforts are done through the lens of trying to keep customers’ earnings ‘consistently coming through’ as priority, despite the challenges throughout the world,” he said.
Acting as Change Agents
Commerce tech providers like Payoneer can act as “change agents” that shift the ways in which individuals, families and enterprises get their funds, their goods and their services directly — quickly and transparently.
Allum pointed to Spain as an example. A lot of day-to-day commerce there still usually relies on an offline retail network. During the pandemic, many consumers could not get the goods they needed. Payoneer partnered with Amazon to show merchants how to move their physical retail operations online (and get paid too).
Keeping money moving in times of economic stress might be viewed as something a lot like a utility, said Allum.
“FinTech platforms like ourselves give businesses access to the global economy, taking the heavy lifting out of going global,” he said.
And in doing so, they’re removing uncertainty from the equation as client firms broaden their reach — where, on their own, they might have to grapple with regulatory and tax compliance, localization and foreign exchange (FX) optimization, among other challenges.
The role FinTechs play here is to help commercial clients navigate those issues and get to market quickly.
Gig Economy Growth
In many economies, gig work is becoming firmly entrenched, and the pandemic only further cemented the desire of many workers to find project-based work to supplement their incomes or replace lost full-time work, Allum said. Many gig workers have had to pivot to find new opportunities, sometimes branching out into new markets. Platforms such as Airbnb have been lending humanitarian support to the crisis unfolding in Ukraine.
As these and other global events unfold, enabling cross-border payments remains a critical part of the picture, Allum said.
“Businesses, generally speaking, are much better to onboard more remote freelancers than ever — and highly-skilled workers in low-cost markets can use digital tools to access countries such as the United States and Europe,” he said.
FinTechs need to take a risk-based approach toward creating a “portfolio effect” for companies where rules can change quickly. Those providers need to target geographic diversity, yes, but also need to keep track of Black Swan events (such as the pandemic).
Take, for example, Brexit, where any number of firms are dealing with fragmentation and uncertainty.
But with agility on hand and advanced technologies at the ready, Allum told PYMNTS FinTechs can help smooth out bumpy times for small- to medium-sized businesses (SMBs) and global platforms alike.
“We can all be part of the solution,” he said, in the bid to keep funds flowing to where they are needed most urgently.