As of March 20, 2019, arguably the hardest hit industries as a result of the COVID-19 crisis are travel, hospitality, and retail. As governments are making efforts to limit social interaction and people are self-isolating and working from home, economic activity has slowed down worldwide.
As many signs point toward an impending general economic recession, no industry is spared from the reality of reduced commercial movement. Payments as an industry are mostly based on software, and are moving completely mobile and online at a fast rate.
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However, just because e-commerce can’t keep up with demand in this period and people are buying more services from home doesn’t mean payment companies have been spared completely. The general pressure on businesses both large and small is being felt in their share price – in the last 10 days, all payments companies have taken a hit.
Ingenico is a relevant example that business is never ready for a crisis. Its share price soared to a high of €142 on February 19, 2020, only to fall by 55% in one month to a yearly low of €64. The massive increase followed Ingenico announcing its merger with Worldline.
It is never a good time for a pandemic or a crisis to hit a business, regardless of how well or not it may be doing. Companies that were struggling before will have a much worse time than companies, specifically in the payments industry, which have been performing well over the past years as people have become increasingly comfortable with remote and online transactions.
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By GlobalDataNot all is bleak on the horizon for payments companies, however. As the crisis will eventually subside, economic activity will gear up once more and merchants will open up again or launch new enterprises. Payments will be at the forefront by facilitating transactions. Payments companies are arguably in a better position than other industries to weather the COVID-19 storm.
