Earnings Review: Being resilient and finding the blue skyJuly 30, 2020 | By Sachin Mehra
In today’s report of our financial performance for the second quarter, Ajay, Michael and I noted the impacts of the pandemic on consumer behavior over the past several months. The world has become more digitally-driven, accelerating the adoption of technologies that was already underway, but now at faster pace. There is a strong consumer pull for our contactless technology and a growing aversion to cash. Merchants are looking to establish and strengthen their digital presence.
And, that accelerated shift to a digital life – sparked by the increased demand for online shopping and safe ways to pay in store – that’s exactly what we are built for. We operate one of the largest, most sophisticated, high-speed networks in the world. It’s this technology and infrastructure that has let us enable businesses of all sizes to continue to operate and adapt to the new requirements of their customers.
During our call, we shared some thoughts on the broader spending environment. Leveraging the four-phase framework we are using to manage the company though this situation, we believe that most markets have entered into the third – Normalization – phase domestically. This is where we have seen social distancing and travel limitations begin to relax and spending gradually recover. And--because it’s important to look at the broader trends, rather than focus on one specific number on a week-to-week basis--the trends we shared through the week ending July 21 show continual improvement. That’s a good sign.
As we look at our second quarter and what lies ahead, we believe there are a few key themes to focus on:
The shift to digital is real
People are using electronic payments more, relying on contactless for peace of mind in-store, even as they shop and spend more online. Our consumer research notes this will continue, with more than 70 percent of consumers planning to maintain this preference for online shopping, even after the pandemic subsides. This is where our Click to Pay capabilities – enhanced with the NuData AI and machine learning technology – will create a better experience for consumers in the U.S. and around the globe.
And, we will continue to support small businesses – 90 percent of all businesses across the globe – as they work to quickly establish a digital footprint and an online presence. Our Digital Doors program provides simple, straightforward access to payment gateway, cybersecurity and other resources to support this effort.
A desire for greater peace of mind
Whether it’s protecting businesses’ systems or being able to help our customers accurately forecast and plan for what’s ahead, we have seen an increased demand for our services offerings. During the call, we specifically cited how we are scaling our cyber capabilities to help address some of the pain points from today’s world through solutions from our recently acquired companies like RiskRecon and Ethoca.
Greater demand for more payment choices
With our multi-rail strategy and continued focus on real-time payment solutions, we're the one network that can deliver effectiveness, peace of mind and flexibility across all payment types in one package. We are innovating and partnering to create solutions that meet the needs of all the parties – consumers, fintechs and financial institutions – as seen in our support of Open Banking and planned acquisition of Finicity.
The foundations of our business – our strategy, our products, our services, our people and our culture of decency – have served us well in these unexpected times. We have had the good fortune to be able to turn the changing dynamics of today into a positive and a catalyst for our organization. And, in turn, we continue to be able to be the trusted resource and partners for government, our customers, businesses and the end consumer. That’s our commitment and focus today and every day, because, ultimately, the only way we get through this time is if we do it together.