When the going gets tough, the tough hunker down and solve problems. Adversity ends up creating strong businesses, as the market meltdown of 2008 demonstrated, and some payments industry leaders see the current downturn as more of an opportunity.
PYMNTS’ Karen Webster caught up with CITCON Founder and CEO Chuck Huang for our ‘Inside the Mind’ series, and against a backdrop of serious upheavals on a few fronts, he kept coming back to the mantra of business innovation and resilience in the face of mild to severe chaos.
Webster observed that despite learnings from disasters past, the global economy is facing a unique assortment of challenges now, and merchants need thoughtful, helpful partners.
Noting that CITCON isn’t large in terms of its workforce, he said “the is fact we are working on a global scale. We’re dealing with a lot of what will help merchants expand globally. It’s very hard to refer back to a particular year [when planning what] we’re going to do [going forward]. I think 90% of our time is still thinking about our own business. We’re pretty much heads down trying to figure out where we can provide value and solutions for merchants.”
Timing for that kind of thinking is propitious, as merchants in local market and those selling cross-border are dealing with the same old issues of cross-border money movement and supply chain snarls that are constant but compounded at times like the one we’re going through now.
Acknowledging the impact of war in central Europe and malingering COVID problems in China and other parts of Asia particularly, Huang said clients are mainly focused on doing business almost regardless of inflation, outbreaks and political tensions making headlines.
“There are geopolitical issues, but if you have a business in Europe … nobody will pull out. Everybody is trying to figure out how do I work around these issues,” he said. “Another example is [how] COVID lockdowns in China impacted some merchants. Yes, some businesses get impacted, but everybody is figuring out how to work around and resolve those issues.”
See also: Citcon Integrates With Bold to Enable 150 Payment Methods
On Not Getting Psyched Out
As much as factories can’t get materials, ships can’t unload cargo and there aren’t enough drivers to get those goods to distribution centers when they do reach shore, Huang believes there’s also a downbeat mentality that also needs to be overcome.
He told Webster that “from our point of view it’s changing. In a sense, whatever happens, including COVID, including geopolitical issues, does have some impact on people’s mind,” adding that he’s more concerned about long-term unknowns than short-term interruptions.
What he is concerned about in the now is manufacturers and merchants having access to finance to keep things rolling and meet the demand that’s out there.
Looking at the rising cost of scarce capital, he said when capital gets more expensive “it slows down the expansion pace for pretty much for every business. That is going to happen. It will not happen on every project level, but it certainly will happen, for example, on the roadmap side. If a client wanted to [spend] 5 cents originally, in the next 12 months, he probably will cut down to only 2 cents, or nothing. That can certainly impact everybody.”
With all the negativity in the air some companies contract, he said, while others take the carpe diem route and seize the prospects that arise from difficult macroeconomic conditions.
“We have clients all around the world. What I have seen them do — and it’s the same thing for us — is continue looking for new business opportunities, even given the slowdown of the global economy,” Huang said.
“If you look at particular sectors, someone is in cross border e-commerce, someone is focusing on, for example, education platforms around the globe, there’s still plenty of growth opportunities.”
He used gaming a distance learning-remote education as examples of sectors that leveraged product, logistics, pricing and a host of other factors to flourish during the past 2-plus years.
See also: Citcon Brings eCommerce Payments to South Korea, Japan
The Strong Will Emerge Stronger
When it’s time — perhaps in late 2023 or early 2024 — to hand out awards for who came through the fire stronger and smarter, Huang’s winners will be the resilient businesses.
He told Webster “I’m very impressed by the entrepreneur or business owner who operated in this uncertain environment. For example, even now, COVID is lasting much longer than everybody [expected]. But a lot of businesses already started planning in terms of the reopening, [strategizing around] how to expand my business once COVID is under control and global travel is back. Those kinds of things are starting to happen.”
Travel is among his go-to use cases along those lines, as battered travel and hospitality brands were ready to take the bookings when pent-up demand was unleashed in recent quarters.
Noting how hard travel businesses were hit by the pandemic and now inflation, Huang said “you start to see them kind of grow in the last couple months, because everybody is anticipating a kind of recovery and … preparing for reopening.”
“The nature of business growth versus decline still largely depends on the business themselves. Even in some challenging sectors, you still see that people can grow their market share.”
Another example is crypto — possibly — as he told Webster that more CITCON merchant clients are inquiring about it. “Evidently we have quite a bit of merchants that want to participate in one way or another to explore the capabilities of crypto payments because crypto payments has not been enabled for lot of use cases, and it was absolutely a core use case when crypto was invented.”
Interest is showing up around crypto acceptance in the luxury goods sector. He said, “even for some domestic merchants, for example luxury brands, they’ve showed interest because the crypto owner in general is normally in a more affluent group.”
As for CITCON itself, he said they’ll “be watchful in terms of the global economy, as well as the financial markets. That’s for kind of the long term. For the short term, we have plenty of projects. Internally we want to make sure our team is focused and working more effectively.”
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