- July 29, 2020
- Posted by: iPay Editor
- Categories: best high risk merchant account provider, best high risk merchant services, Economics, high risk payment gateway uk, Retail Merchant Account
There is a huge impact on supply chains due to recent world events. It definitely matters for high-risk merchants. The payment gateway and merchant account will be affected as soon as there is a disruption in orders. It can happen quicker than you expect!
Does your business rely on Asia for manufacturing and order fulfilment? Does your business process payment in Hong Kong banks? Are you selling luxury goods and the products are stuck at the borders?
The global pandemic is already changed the entire world. How about the new Hong Kong security law? What about tensions in Indian and Chinese borders? It is advisable to have a long-term strategy to secure payment processing abilities for your business.
In this blog, let’s understand how recent world events has affected the e-commerce world globally. Let’s learn a few strategies to mitigate recent world events’ influence on your business and ensure that you can continue to scale and grow.
How High-Risk Merchants Are Affected by High-Profile World Events
It is not really hard to find the world events that are disrupting supply chain for high-risk merchants:
There is increased tension in the Indo-Chinese border. Due to this many customers had order fulfilment issues. This has resulted in a high amount of refund and chargebacks. India has halted the clearance of several commercial and industrial shipments in response to this. In most major Indian airports and seaports there is a huge disruption to Cargo and freight shipments. Due to the COVID-19 and world tension, there is a supply chain disruption for high-risk merchants.
Hong Kong Security Law
After months of protests, a new security law in Hong Kong has come into effect. There is been a swift reaction. A few major tech companies have already pulled out the businesses and a few others are not co-operating with Hong Kong authorities.
This move has, in turn, has increased tensions between the US and China. Even Britain who ruled Hong Kong until 1997 is also unhappy by the move. Huawei has been removed from the 5G network by the British government as a reaction to this.
The US has imposed widespread sanctions and also ended Hong Kong’s preferential trading agreement.
A few Asian countries are not able to return to pre-COVID output levels. There is no enough sourcing of materials. Transportation of goods has been wrecked due to local quarantine.
It might take a good 6 months to 1 year for a full recovery.
There is a huge impact on the payment processing of e-commerce merchants due to these events. The most serious problem is the recent Hong Kong law for payment processing. Hong Kong is the banking capital of Asia. The companies that rely on Hong Kong based banks will be devastated. It affects both payment processing and regular banking. If your supplier is working in an unstable region your orders and customers will definitely be affected.
What Are The Ways In Which High-Risk Merchants Can Mitigate The Impacts Of Global Events
- Business Continuity Plan
Several factors are totally out of control in a business. However, you can work on a few factors to ensure there is not much impact on your business. It is advisable to set up a comprehensive Business continuity plan (BCP). To mitigate the effects of huge global and local events such as a pandemic, natural disasters, trade wars you need to put in plan a contingency plan. You can start by having a reserve in your bank account. This will act as a shield and help cover losses incurred due to unforeseen events. COVID-19 is the best example of how it’s damaged almost all the sectors. However, businesses who had better cash reserve have coped the best.
- Increase Local Inventory
It is advisable to have a little surplus in the local inventory. If you make use of local warehouses so that you can ensure you always have a backup supply. In case if there is hold or interruptions to your usual supply you can make use of the inventory. If there is no interruptions then replenish your excess with new stock.
- Meet customer expectations
Your consumers will have expectations from you and it is vital that you fulfil it. Shipping time is crucial. You need to change the 2 days delivery to probably 15 days and then surprise your customers by delivering early. This will avoid chargebacks on a bigger scale. Most importantly keep your customer updated about delivery status.
- Cancellation And Refund Policies Needs To Be Easy-To-Read
Always make refund policies crystal clear so that there is no chargeback claim by the customer. It is always better if the policies are short and easy to understand.
- Diversify Payment Options
Have an additional payment processing options preferably different locations. As the saying “don’t put all your eggs in one basket” it is advisable to have various options available.
At iPayTotal we have helped various merchants diversify their payment gateway to mitigate the effects of the supply chain. Contact iPayTotal today. Call us at +44 800 776 5988 or email at firstname.lastname@example.org