This article was originally published on Payments Journal, authored by Andres Ricaurte, SVP and Global Head of Payments, Mphasis.

While it is too early to fully assess the impact of the coronavirus on consumer behavior, what we have seen signals a sea change in how we shop and pay for items and services — and how companies meet changing patterns of demand. Here is what we know so far:

Retail sales declined 10%, with some using the term retail apocalypse, while e-commerce purchases are expected to rise 18%, according to industry research. Fortunately, as shopping from home became the new norm, Main Street and was “virtualized” by platforms like Shopify; while others like Instacart helped brick and mortar stores stay afloat. Meanwhile, restaurants and other social venues are re-factoring to become at-home experiences.

While rapid change can be disruptive, it can also provide opportunity for transformation. Foremost among those businesses that will evolve due to the pandemic are payment companies, which touch almost every aspect of American business and consumer finances. Recognizing that habits are made and broken in periods of change, payment companies are implementing aggressive tactics to retain and acquire clients.

One priority is convenience. For instance, Afterpay, a buy-now, pay-later (BNPL) provider and Klarna, which has implemented retail psychology to promote more mindful shopping, have reaped the benefits of easy to use features. Meanwhile, American Express has invested heavily in safeguarding its brand and maximizing service to customers experiencing hardship due to the virus or its economic impact. These measures include lower monthly payments and relief from interest or late fees. “[Our] brand needs to be cared for, the brand needs to be invested in and we will continue to do so through tough times and through the good times,” said CEO Stephen Squeri.

To further stay competitive in this environment, every major payment player is upping the ante on rewards. Chase and Amex are both expanding their rewards coverage in services that are in the client’s path of relevance such as online streaming and Instacart. In fact, Discover, permanently changed their travel rewards construct altogether. Consumers are expressing optimism for their own finances and the broader economy, as evidenced by an accumulation of travel miles for future trips. Airlines are even postponing the expiration dates to retain those passengers.

None of this is happening for free. Banks and payment companies are in a balancing act between protecting the brand, retaining and growing customers, adhering to regulation and maintaining return to shareholders.

Expected losses from outstanding credits are rising, and customer disputes are skyrocketing as cruise lines, airlines, and many other industries face a deluge of refund demands. While passengers are looking to the US Department of Transportation to enforce rules that airlines must offer refunds for cancelled flights, regulations such as Section 75 of the Consumer Credit Act – which holds credit card providers jointly liable for any breach of contract or misrepresentation by retailers – are driving credit card companies to increase their dispute loss provisions.

In fact, Amex tripled its provision for loss, while Barclays saw profits slide as the firm sets aside another £1.6 billion for coronavirus-related loan losses.

Some payment processors have been forced by the coronavirus-induced slowdown to hold back funds as a cushion against losses when all those refunds for flights, cruises and vacations start to kick in. This presents another headache for companies as they try to adjust to limited revenue in a world of shutdowns and re-openings. In fact, Square’s explicit stance to increase holdbacks in its merchant payments earned them major criticism from their clients and the market.

As quarantines and social distancing continue to give birth to new commerce and payments habits, we will see acceleration in a few important areas. First, payment choices across both digital and physical transactions will continue to expand. From contact-less payments to cashier-less check-outs, virtual and invisible payments will continue to exponentially grow.

Second, loyalty will take a new and richer meaning as providers seek to become a more integral part of how their clients cope with these uncertain and challenging times. This will give birth to a new wave of features and value propositions. And third, partnership and co-opetition between payments and commerce providers will intensify, as players will continue to realize that staying in the path of relevance requires them to be ubiquitous and seamlessly available regardless of how and where their clients seek to transact.