Coronavirus' contactless pay wave boosts NatWest's small-business plan

The coronavirus pandemic is driving a rapid increase in NatWest’s U.K. small-business merchant acquiring unit, with many being first-time card acceptors.

In the last two months NatWest has reported a significant increase in small and medium-sized enterprises (SMEs) transitioning from using solely cash to accepting contactless and card payments for the first time. Since the March 23 lockdown date in the U.K. NatWest reports 70% of all SMEs registering for its merchant acquiring service, NatWest Tyl, are new to card payments.

“We’re seeing an increasing number of small businesses begin to accept card and contactless payment for the first time, over recent months," Mike Elliff, CEO of Tyl at NatWest, said in a press release. "We know that much of this current trend is driven by necessity related to the current crisis, such as the need to accept contactless payments for hygiene reasons, as well as businesses moving to offer delivery services or accepting orders and payment by phone to reduce physical contact."

The British bank launched NatWest Tyl in May 2019 to target SMEs. The launch was an ironic twist as NatWest’s parent company, Royal Bank of Scotland, was forced to sell Worldpay, its acquiring unit, a decade earlier as a condition of a government bailout during the 2008-9 recession. In 2019 FIS acquired Worldpay for $43 billion.

NatWest has waived terminal fees for Tyl until the end of 2020 as a coronavirus aid measure. Since the U.K. lockdown, British consumers have dramatically reduced their use of cash, according to the national U.K. ATM operator LINK.

While there has been a slight uptick in recent weeks, overall cash withdrawals for ATMs remain more than 50% below last year’s levels, despite LINK’s 12-month pledge to maintain fee-free ATMs for consumers.