29 May 2020
Posted in Banking
Belgium’s soaring unemployment rate to hit its payments industry, says GlobalData
The severe impact of the virus in Belgium has led to a large-scale unemployment, which will result in declining consumer disposable income and expenditure, says GlobalData, a leading data and analytics company.
According to the National Employment Office, nearly 98,000 workers in Brussels – 30.1% of the region’s wage earners – have applied for temporary unemployment (as of end of April 2020).
Ravi Sharma, Payments Analyst at GlobalData, comments: “Retail customers and small businesses are particularly vulnerable due to falls in the consumer disposable income. To ease the burden, banks are offering various relief measures. For instance, IG Bank and BNP Paribas Fortis are allowing eligible customers to defer mortgage payments for a period of six months.”
However, consumers are shifting to contactless and online payments, which mean that these channels will see growth, despite overall falls.
Sharma concludes: “While cash payments are set to decline, a rise in contactless and online payments is expected in Belgium. Online purchases are likely to see a surge benefiting online payment solutions such as PayPal and Masterpass. Likewise, mobile wallets including Apple Pay and Payconiq are expected to benefit from an increase in contactless payments.
“Belgium’s buy ow pay later market is likely to face upheaval in the short to medium term. Increased unemployment and reduced consumer spending will impact the ability and desire of consumers to purchase goods on credit.”