Coronavirus update for business: No handouts for Domino’s, a random act of kindness and are neobanks on the out?

Revolut prepaid credit cards. Source: Revolut's Twitter page.

No pizza the action

Having not emerged as the COVID-19 success story many would have expected, Domino’s Australia has reportedly declined to accept any government stimulus package, claiming it would rather not rely on the state.

“We’re privileged enough to trade, so why would we be [taking stimulus]? Anything we take on just delays the future of the country and has to be paid back at some point,” chief executive Don Meij told the Sydney Morning Herald.

At the same time, the global franchise is also looking to local suppliers, saying the disruption has caused the business to give a little more thought to supply chains.

Right in the feels

In Melbourne, one cafe owner has been on the receiving end of a random act of kindness that gave his business a $750 boost.

The Timbuktu Cafe in Brighton East was gifted the money by two pensioners, who slipped it under the door, with a note to owner Pierre Patole.

The pair had each received a stimulus payment from the government, the note explains.

“The government says the $750 is for us to spend on the economy,” it said.

“I need nothing that I can think to spend it on and have thought that I would like to donate it to you business Pierre,” it went on.

“You are certainly part of the economy and we very much admire your efforts to create a wonderful new family focused business. Plus your ever smiling welcome despite these hard times.”

Patole told Nine News he was “lost for words” at the gesture, and would invest the money into the business and use it to help pay staff wages.

Don’t bank on it

In Europe, the birthplace of the digital bank, neobanks are seeing a decline in downloads, even as other financial tools see an uptick, according to fintech news site Sifted.

Despite speculation that the digital banking giants could do well as people become more accustomed to dealing with online businesses in lockdown, big names like Monzo, Starling and Revolut have seen a notable dip in new signups in March, compared to February.

The same trend is also noticeable among the smaller, lower-profile apps.

We don’t have the data to show whether this trend is also true in Australia, but in a year so far defined by financial disruption and uncertainty, it wouldn’t be a surprise if would-be converts are being a little more cautious.

Two-horse race

Peter Gray, co-founder of fintech Zip has claimed the economic downturn caused by COVID-19 will sort the wheat from the chaff in the buy-now-pay-later space, suggesting it will become a two-horse race between Zip and rival Afterpay.

Challenging economic conditions cause strong businesses to get stronger, while smaller competitors struggle, Gray told Business Insider Australia.

Most newcomers follow Afterpay’s model of splitting payments into manageable chunks, he noted, but don’t differentiate enough.

“Most of the challengers are going head to head with Afterpay’s model, but they don’t have the strong customer base, they don’t have strong repeat transaction behaviour and they don’t have a differentiating factor,” Gray said.

“So it feels like they’ll struggle and either have to consolidate or simply fall away.”

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