fbpx Skip to content

How can Banks & Acquirers help SMB Merchants survive and thrive in a COVID-19 World ?


  • The COVID-19 crisis is unprecedented and led to the closing down of more than 60% of small and medium local businesses in France.
  • During the initial COVID-19 Lockdown period, Merchants that remained open and were using a Payment-based Marketing Solution, performed 22 percentual points better in revenue than the average Merchant.
  • This solution is allowing Merchants to communicate with their end customers throughout the crisis and will also help them on the reopening, once the lockdown phase is finished.
  • The world has changed: Merchant perception has evolved regarding what are the essential tools for their businesses and are preparing for a “Stop & Go” world where Marketing Communication with their end customers is part of a Merchant basic toolkit.
  • This represents a huge opportunity for Acquirers to help their Merchants access the tools they are looking for and that they need to not only survive the sanitary crisis but to emerge from it as stronger businesses.

Payment-based Marketing tools helping Merchants react to the COVID-19 disruption.

Within 2 months of the first cases being confirmed, almost half of the world population was experiencing some form of mandatory or voluntary lockdown restrictions, with huge impact overall, but in particular on the small and medium businesses that are a key component of most Merchant Acquirers portfolios.

In the case of France for example, by the week of March, 16ʱ, 52% of small and medium Merchants² had already stopped having card payment transactions, in advance of the official lockdown that began on March 17ᵗʱ at 12 AM. This trends accelerated and by the week of March, 23ʳ a low of 63% of the shops had stopped doing transactions and thus had closed their doors; after that date we saw a small increase in the number of open shops.

Merchants using payment-based Marketing Solution performed 22 percentual points better.

For those that could remain open and decided to do so, the use of the Payment-based Marketing Solution by Izicap made a significant difference, as can be observed in Figure 2. On average, the ~40% of Merchants that remained open, experienced a small drop of 5 percentual points in their revenues in the the worst week, when compared with the pre-COVID period.After that they have rebounded, but by the week of April 20th were still two percentual points below their Pre-COVID average.

On the other hand, the businesses that stayed open and used the Payment-based Marketing Solution, systematically outperformed the average businesses every week, achieving by the week of April 20th an accumulated increase in revenues of 22 percentual points when compared with the average Merchant.

This is a poignant demonstration of the practical and measurable value of having an end customer database and a tool to exploit it, adapting to market conditions, even the most unpredictable ones.

Best practices in the COVID-19 fight for SMBs

So, what did Merchants using the Payment-based Marketing Solution did differently from the other Merchants? In Figure 4 we summarize how Merchants have been using the solution in each phase of this crisis.

In addition to their own initiatives, Izicap has prepared a communication and training plan for Merchants that is being put in place and will be educating and advising the Merchants along each phase of the reopening. 

This is geared towards providing Merchants with “off-the-shelf” easily customizable tools to communicate with their customers, minimizing the impact of the crisis on their businesses.

Whenever possible taking the opportunity to strengthen their businesses by for example communicating changes to their pre-COVID service model (takeaway, home delivery), product line, positioning, etc… to which their customers were used to.

As demonstrated, we have seen very successful usage of our solution and remarkable results directly impacting Merchants’ revenues. But most of all, speaking with our Merchants, we detect that the Merchant perception concerning the success factors of their businesses has changed dramatically – We see more and more Merchants wanting to focus on building their end customer databases and having tools to communicate with them. We notice this is becoming for the Merchants a key component of a well-run business.

As an illustration of this change, we have seen already big variation in the usage of the platform in the first weeks of the lockdown. There has been a huge shift in the type of activities done by Merchants. Enrolments in the loyalty programs have dropped by 91%, since people were unable to go to the shops, but on the other hand the use of the solution to do campaigns has increased by 141%.

This tells us that the Merchants understand the value of their database and the campaign tool: our discussions with Merchants show that they will be using the solution more and more.

What was for some considered a luxury (“Nice to Have”) in the Pre COVID-19 World, has now become a bear necessity (“Vital” to survive). Not only because the opening of the economies after the lockdown is an uncertain science with constant risk of facing “Stop & Go” situations, but also because the very nature of the way to interact with your clients has radically changed.

Talking with our client Merchants, we can guarantee one thing: “The world has changed”. Their perception is that to stay in business they will need to adapt their business model, their business practices; Merchant Acquirers leveraging the payment data and their relationships with Merchants can be available to help them along their deep transformation journey.


Merchant Acquirers are in a unique position to make available the best Digital Marketing tools to their Merchants: they have access to the payment terminal and the invaluable payment transactions data as well as to the Merchants themselves.

By providing these kinds of tools to their Merchants, the Merchant Acquirers can differentiate their offering and increase their Merchant loyalty (practically reducing churn). By doing so they can also benefit from a very compelling business case combining low investment and very quick time-to-market (as quick as 4 months).

The most likely scenario moving forward will involve some kind of “Stop & Go” (as already seen in many countries) or at least the risk of being forced to “Stop & Go”for a significant period of time.

Acquirers need to bring to their Merchants the solutions that will help them overcome this difficult phase and succeed in the new post-COVID era. Most likely we will move from a situation where the market needed to push these type of tools to the Merchants to one where there will be market pull, as Merchants need the tool and will demand their providers to make it available. If the Merchant Acquirers are the ones providing these tools, the benefit will be huge for the whole ecosystem. There is a silver lining in all the recent events and that is that Merchants are reacting in an extraordinary way and Merchant Acquirers can be part of the solution to their needs.

About the Author

Izicap Co-founder
+33 (0) 6 10 53 40 34