How Discover is supporting Black business owners, small merchants during the pandemic

Discover is working to help Black-owned businesses and other merchants maintain foot traffic — safely — through the use of the card network's payments technology and its marketing heft.

At the center of these efforts is Jasma Ghai, vice president of global payments product and delivery at Discover and one of PaymentsSource’s Most Influential Women in Payments in 2020.

“About 40% of Black-owned businesses are not going to survive the pandemic and they are three times less likely to get funding from government programs and banks,” Ghai said. “That’s why Discover decided to step in and help out Black business owners through a program called Eat It Forward."

The program allows consumers and businesses to nominate a Black-owned restaurant to win a $25,000 award out of a prize pool of $5 million. "We thought that given the current situation, these small business owners could use the extra money to help them get through the crisis," Ghai said.

The Eat It Forward sweepstakes began July 6 and goes through Oct. 31, and the reaction from the community has been overwhelmingly positive, Ghai said. While the sweepstakes has only 200 prizes, Discover received over 27,000 nominations through late August. It’s likely that the total number of nominations could exceed that level by thousands.

Additionally, Ghai noted Discover is spending a lot of energy on helping small businesses tackle the challenges being thrown at them by the pandemic.

“It’s been hard for small businesses. They have been hit the hardest,” Ghai said. “Small businesses are having to get creative to survive, especially if they are primarily brick and mortar-based. Some big challenges include having to get online if they weren’t there already there, along with having to reinvent the POS technology for the store as consumers want the flexibility to pay using contactless.”

This has dovetailed into Ghai's role in driving overall consumer and merchant adoption of contactless payments.

“We have seen a 46% increase in contactless volume in our first fiscal quarter ending March 2020 compared to one year ago," she said. "In the March-to-July time frame, the total number of merchants that were asking for or had adopted contactless increased by 30%. I don’t think contactless is a trend anymore; it is here to stay. It’s not just millennials going contactless, it’s across our entire portfolio.”

Ghai noted that Discover is accelerating the conversion of its card portfolio to meet both consumer and business demands for contactless cards. Last November,Discover had recommitted to contactless cards, stating that it would issue them when a customer’s card came up on its expiration date. During the pandemic, Ghai and her team stepped on the accelerator. Now, Ghai’s expectation is that the majority of Discover’s portfolio will be contactless by the end of 2020 and that it will be 100% contactless by the end of next year.

Even though Discover’s cards are going completely contactless, Ghai said, the card brand continues to work in supporting its cards going into mobile wallets as well, since the company understands that a one-size-fits-all strategy will not work.

“We recognize that contactless payments could come from a card, Apple Pay, Venmo or other form factor,” she said. “Just as consumers and merchants will need to adjust, so will Discover. When EMV was new our customers were unsure, but with contactless it took a pandemic to get consumers to switch. Already over half our customer base has decided that they want some form of contactless.”

The move to contactless payments is something being experienced not just by Discover or in the U.S. alone. It’s become a global trend, as consumers are increasingly opting for more ways to socially distance while shopping in stores. In May, Mastercard announced that 78% of its in-store transactions in Europe had become contactless.

“The pandemic has accelerated everything surrounding contactless,” said Lily Varon, senior analyst in the digital business strategy practice at Forrester. “Not only is consumer adoption of contactless payments growing, it’s also driven the acceleration of merchant acceptance of contactless, which is requiring new POS hardware or enablement of the contactless function on existing terminals where it’s available.”