American multinational payments giant Visa confirms that Visa transaction volumes have witnessed an alarmingly sharp decline this month given the coronavirus pandemic that’s wrecking far greater havoc on a global scale, Reuters reported on 30th March 2020.
The coronavirus outbreak is inarguably one of the devastating catastrophes to have hit our planet in recent history, and needless to say, no industry or business can safely claim that they have escaped the resulting mayhem caused by the pandemic.
Payments giant Visa kicked off 2020 with considerable excitement by launching its blockchain-empowered Visa token service in January. The firm went on to claim that the new initiative could generate as many as one trillion US dollars ($1 trillion) in e-commerce transactions. However, as none of us would have expected, things started going downhill soon after.
Visa transaction volumes paint a gloomy picture for 2020
On Monday, Visa declared that it noticed a sharp fall in consumer expenditures through its network this month. Besides the four percent (4%) plunge in the growth figures this year, as compared to last year, the firm is expecting no more one-digit growth figure in the second quarter of this year. Needless to say, the anticlimactic figures are a result of restrictions imposed by the outbreak.
In the statement, Visa explained that the decline in growth is the outcome of severe social distancing measures and lockdowns imposed by countries throughout the world. People are unable to move out, travel, dine in restaurants, shop, or spend on entertainment and recreation. This has caused a week-on-week reduction in Visa transaction volumes.
Meanwhile, the frightening increase in the unemployment rate as daily wage laborers lose their jobs amid lockdowns, businesses closing down with insufficient capital to sustain themselves, and people growing increasingly wary of expenditure and savings is making things worse for the company that’s so far managed to monopolize the retail industry.
Result? The otherwise rapidly-growing Visa transaction volumes started to hit the skids around the second week of March when countries enforced cross-border travel restrictions and urged people to stay at home to contain the fast circulation of the virus.
Other payment giants too, feel the pressure. Is crypto the answer?
Meanwhile, Visa isn’t the only centralized payment network to face the setback. Other payment processing companies and Visa’s top contenders, Mastercard, Paypal, and American Express, have all expressed concerns over the virus impact and suggested a significant slump in the growth figures earlier last month.
And while this declivity is likely to prompt payment companies such as Visa to rethink their business models and make amendments in growth strategies to stay profitable, some experts claim that it is time individuals and companies realize why decentralized networks like Bitcoin and altcoins were created.
It was precisely for times such as these that the alternative payment setups, autonomous of the flailing economy, could come in handy instead of taking eleventh-hour decisions about service changes.