• Nick Bencivenga

Covid 19… 7 characters that changed everything about how we operate.


Everyone has been impacted in some way, shape, or form. Over 130,000 of our citizens have tragically lost their lives, and more will fall. It’s a loss of truly epic proportions - more US citizens have perished than in World War I, these numbers are hard to fathom. In our quest to minimize the damage, we’re all making changes. Masks. Everywhere! Social distancing. Reducing large gatherings – effectively cancelling sporting events, concerts, and religious services. This has left us all in a new state of “normal” that is requiring businesses and consumers to adapt, and quickly. There are many aspects of our society that will slowly get back to the way it used to be. We imagine that haircuts will be most celebrated. But there will also be several parts of our society that will invariably change, either modestly or severely. Payments and business are no exception – in fact, as the “front line” of society, businesses regularly push innovation and societal change. So, what does AND think that Covid-19 will do to payments in small businesses, in the near and long-term? We’ll discuss our thoughts, and how we recommend preparing for the “new normal”.

Rise of cashless

It’s been a growing trend for decades already – the typical American consumer uses cash less and less. As of 2019, cash was used in only 26% of all transactions, spanning only 11 transactions per month. That’s a 4% decline from the year prior, too. American consumers have already spoken on the usage of debit/credit cards – they like them, they use them, and they’ll continue to use them. Our opinion is that this certainly won’t start changing anytime soon. Even without the ravages of Corona-virus, we’re of the belief that cash would continue to lose popularity, particularly amongst younger consumers. Corona-virus is only quickening this trend. Now, consumers are pre-paying purchases online that they’d have almost certainly paid for in-person. Naturally, that excludes cash as an option. Customers are also now much more aware of the potential for viral-transmission via surfaces such as cash – so they are actively avoiding paying by cash, even when given the option. Also consider that some of the most “cash heavy” establishments (such as restaurants) are the ones being hit the hardest by Covid-19, thereby reducing cash usage even more. We’ll be clear in saying we don’t think cash is ever “going away”. Not in our lifetimes. It has far too many purposes. However, our society is rapidly adopting a digital payment system that excludes cash for numerous reasons – health, physical simplicity, and digital loyalty/rewards. As such, we think cash will continue to stagnate or reduce its presence in many retail business establishments. As a business owner, you can stay ahead of this by ensuring you offer easy NFC (contactless) options, online payment options for order-ahead (when applicable), and restaurants can consider cashless tip outs for their employees (we recommend Kickfin!)

NFC makes the final leap

If you ever travel internationally, you’ll invariably notice something that almost every American picks up on. The rest of the world is a little… ahead of us, in terms of payment technology. They used chip cards for a solid decade before we did. They put PIN numbers on their credit cards (we’re just starting to do that now) and they also pay with their phones and digital devices with far more frequency. The disparity is due to several factors – limited market competition in the wireless space, outdated technology and consumer finance laws, a payment industry with financial incentive to “stay the course” – there are numerous reasons. End of the day, we can say with certainty that there has been mass adoption of several technologies in varying countries and regions that far exceeds what the US has implemented. As such, we’ve benefited from years of testing and data analysis – we can say with certainty that these technologies reduce fraud, and keep both consumers and merchants safer. AND is of the belief that the new Covid-19 landscape will accelerate the NFC technology in particular. Also known as “contactless” or “Near Field Communication”, NFC is already in place in America. We’re sure you’ve seen it – Apple Pay, Google Pay, Samsung Pay, there are plenty of them… all of them employ some sort of wallet-system where consumers can load cards into their device, and pay by “tapping” their device against an accepting terminal. Or, they can use “tap-to-pay” cards, as well – this requires you to still carry the card, but you don’t have to physically insert/swipe the card. Just tap. Naturally – this technology allows the consumer to stay physically “separate” from the merchant. This is a big benefit, both real and perceived – consumer usage of NFC has already drastically risen to 51% during the outbreak. In addition, 56% of surveyed MasterCard consumers stated that they intended to continue using NFC after the pandemic ended. In just the first quarter of 2020, contactless usage has already increased 40% over last years’ numbers. Cash was down to 15% and 13% in grocery stores and restaurants in April 2020, respectively. We don’t see this trend abating. It makes total sense – consumers want a safe way to pay. Not only is NFC incredibly secure, it’s also a safer way to avoid physical transmission of Covid-19. It also allows for a digital record of consumer transactions, and increases merchant communications with consumers if loyalty programs can be implemented. We see both businesses and consumers continuing to promote NFC as a payment method, and encourage our merchants to accept NFC payments whenever possible!


Zero-cost becomes far more normalized

Zero-cost processing is the act of “passing along” credit card processing costs to your customers, be it through a surcharging model, or cash-discounting program. In either program, you’re rewarding customers with lower costs on cash-purchases, and effectively raising prices on card-based purchases. Historically speaking, consumers have treated this with a mixed bag in America. One industry in particular has really gotten us used to cash-discounting: gas stations. Every. Single. One of them. They all offer a lower, cash/debit based price. And we all accept that if we use our credit card, we’re likely paying another 10¢ per gallon, give or take. We’re fine with it. We also see these types of programs at government offices – you’ll pay a “processing” or “convenience” fee to pay by debit card. Or you may now see some stores charging a 50¢ fee for any non-cash transaction. It’s there. Not in some industries, but it’s definitely there in others. And now that Corona-virus is a part of life, consumers are seeing how hard small businesses are truly getting hit. They’re seeing just how badly their businesses have been ravaged – how life may never be the same again. There’s a new-found empathy for local, small businesses in particular, but all businesses in general. This is a tough situation! And there’s not much they can do about it except lose money! So there’s a bit more of an “understanding” that businesses who are still operating are doing so on much slimmer margins. They have less room to play around, less room to wiggle and offer discounts, less room for error or theft. They have to tighten up – we all do. One of the quickest ways to tighten up is to reduce that big monthly credit card processing bill. Many businesses easily pay $1,000 or more to process their credit cards every month. Not chump change – add it up, you can easily be talking about $10k - $20k/year or more, depending on how much you process. Consumers are starting to understand this. Particularly now – they’re recognizing that running a business is expensive, and that rewards-card they get to travel with costs money. Many consumers are more than willing to make one small concession to help patronize a business they appreciate – they’ll pull out their debit card. Or, they’ll pull out cash. But you have to ask! If you don’t ask, if you don’t give a reason to do it, customers will pay with the card that benefits them the most. We see this trend of “asking” (with a form of surcharge/cash-discounting) accelerating in the future. Rarely do zero-cost merchants lose sales. It just doesn’t happen often – almost everyone carries a debit card that they’re willing to use. And you’d be surprised how many consumers are actually happy to help out, when you make the simple ask. Once they make the human connection of “this person runs an expensive business, and I’m costing them more money,” most people will either absorb the small fee, or pull out their debit card. The other factor to consider – paying via a credit card is a big advantage for customers paying for high-ticket goods. They fully recognize that they need to use a credit card, because they need that big credit limit in order to pay this off over time – they don’t have all of the money today. As such? They’ll likely be far more receptive to a small surcharge fee, as it’s worth it to them!

Online ordering/delivery is part of every grocery store and restaurant’s services

This has already taken hold. Cooking is now… cool again? People are eating at home with far more regularity, and although they’ll start getting back to restaurants eventually – there will be a minor cultural shift in the way we prepare/cook food, and how much time we spend at home to eat it. In particular – now that more of us will be working at home, that means they’ll also be eating at home, too. Hello, takeout! Now that consumers have gotten a “taste” of delivery services, there are many who won’t want to go back. And why go to your favorite restaurant if they’ll deliver to your door anyways? These small shifts in consumer mindsets will add up to big changes in the food and beverage industry. In particular, restaurants and food service merchants may need to do the following to stay successful:

  • Offer multiple payment avenues. If customers want to pay and order online… let them! Many consumers now expect this as an option with restaurants. They like being able to order ahead now. They want to pay you first, tip you first, and just make this easy. So let them! It’s important to either build this into your website, or work with a POS that allows you to export your menu online with a few clicks (like Clover POS). If customers prefer to pay in person when they arrive, offer that they can pay by NFC, to avoid contact.

  • Consider in-house delivery, or a third-party service. You’d be surprised at how receptive consumers are to paying significantly more to have a shopper/delivery. Now that grocery stores are delivering, consumers are becoming trained to pay “shopping fees” as the new normal. Restaurants are charging delivery fees and service fees where appropriate. Our recommendation: don’t go overboard. If you can avoid extra fees, great! Your customers will appreciate it. But if you opt for a third-party company to handle delivery, that’s also nice – it allows them to charge those extra fees, and consumers are already quite receptive to them. Regardless, though – many food vendors are adding delivery where it never would have been dreamed of in the past!

  • Get creative. Our local frozen-treat company got a truck and started doing home-deliveries to drum up business, with an order-ahead requirement online. Delivering alcohol is now allowed in many stated (where it was previously banned for delivery) so many restaurants are having fun with advertisements and offerings – consumers are looking for outlets right now! We recommend building your brand/voice, and looking for opportunities to connect with your customers. Now is the time!

New focus on cleanliness and social distancing

It should go without saying, but every retail business is going to have to change the way they do business in an in-person environment. Starting with the obvious – there are now many new legal mandates, depending on the state/county in which you operate. Certain industries are still heavily restricted in how they operate. Restaurants may have new seating capacities or table requirement, as do many bars and salons. Any business with a “queue” system is recommended to encourage the 6-foot rule by placing stickers on the floor or using guards/barriers to create customer separation. Businesses are strongly encouraged to offer hand sanitizer where appropriate, particularly in environments where the touching of products is unavoidable. Masks will likely become much more common in our society, and although we suspect their usage will be reduced once the main waves of the pandemic subside, they’ll be used much more prominently than the pre-Covid days. Hopefully, a vaccine can make all of this a moot point – but until that day, businesses are advised to encourage healthy interactions that respect social distancing guidelines, and CDC best practices. If not for social reasons alone, it’s a wise financial move to keep the virus out. Negative publicity, lost revenues, lost workers, and clean-up costs can add up quickly. It’s something no small business owner wants to deal with, so we recommend strong pro-activity for the foreseeable future.

There will be peaks and valleys

There are several industries that have seen a very harsh reality since Covid-19 struck. In particular, any business in the travel and entertainment industry has likely been severely impacted. Airline travel is down 90+ percent, cruises are halted, oil prices have plummeted amongst a skyrocketing supply of crude. In short – everything related to travel has come to a screeching halt, and re-opening will take time. Restaurants and personal care services (salons/barbershops) are another hard-hit category. When the stay-home order hit, these were the places that just couldn’t be patronized. But, they’ll come back. States reopen, businesses start back up with precautions, and retailers will get their clients back. Our concern, however, is not the first wave. It’s the second. In almost all major outbreaks, there’s been a second wave after the populace thinks the first is gone. We think that there is still a significant likelihood that some businesses are mandated to close a second time in 2020, or early 2021 due to a revitalized threat of Covid-19. We don’t want to be doom-and-gloomers. At the same time, history has taught us many lessons, and one of them is that viruses are hard to contain and regularly make a second (and third/fourth) resurgence. We think it’s prudent for merchants to prepare for the worst, and hope for the best. What does that mean in this circumstance? It means getting financially prepared to go through this whole ordeal a second time. Speak with your employees, and share expectations – that way, everyone is on the same page ahead of time. Use these times wisely, to build out online ordering or delivery services. Communicate with your customers that you’re ready for whatever happens. That way, you’re not caught off guard by a shut-down. You’re ready to make the best of it, and get your customers the goods/services they need in the best possible way, as quickly as you’re able.

We truly hope that a vaccine is created as quickly as possible, and that the 2020 shutdown is a one-time deal. It’d be wonderful if that’s the case. But, we’re operating under the assumption that Covid-19 is here for at least a few years, until a vaccine is created, tested, and distributed at a widespread level. The scientific community generally paints an 18-24 month realistic time-frame for that scenario. A recent poll of CEOs at large American retailers indicated they expect the Covid-19 business impacts to last at least until the end of 2021 - these business leaders assume this isn't going away soon. So, for the next 2 years, we likely have to be prepared to handle Covid-19 on a regular basis. Use this time wisely. If you’re able, adapt your business to changing consumer demands. You can also take this time to reinvest in your business, update your branding or voice, or implement new marketing, technology, or hardware. It’s rare that you get time off like this.


1. https://www.frbsf.org/cash/publications/fed-notes/2019/june/2019-findings-from-the-diary-of-consumer-payment-choice/

2. https://www.digitaltransactions.net/more-than-half-of-u-s-consumers-now-use-some-form-of-contactless-payments-mastercard-says/

3. https://www.bankrate.com/finance/credit-cards/food-delivery-survey/

4. cnbc.com/2020/06/29/top-ceos-see-impact-from-coronavirus-lingering-until-at-least-end-of-2021.html