As the world eagerly waits for Covid-19 to ease its grip and life to start normalizing, the technology sector is really coming into its own, positively impacting shipping and other industries, writes Stuart Ostrow, Founder and President of ShipMoney.
While the need for increased operational efficiencies had already resulted in the maritime sector embracing digitalization, the pandemic accelerated the movement away from the decades-old practice of Cash-to-Master towards digital payment solutions, such as ours.
In the current global reality, ships face tremendous logistical challenges as they attempt to get cash on board to pay seafarers. Some ports have literally run out cash and others are refusing to allow crew to leave their vessels, resulting in seafarer inability to transfer money home. This has caused hardship for families who depend on the support, as well as significant anguish for the seafarers.
Many ships are also experiencing challenges getting in and out of port. Even when they do manage to get alongside, how easy is it for the stevedores, ship agents and suppliers to get on the ship? Disruption of deliveries to vessels does not only include goods, but also cash. And if seafarers cannot get off the ship, how can they spend their money?
These problems are forcing many shipowners and managers to rethink the way they use cash in favor of virtual and card-based transactions.
As crews experience the advantages of having access to digital payment solutions, I anticipate there will be a reluctance to return to the old Cash-to-Master system. Our virtual cards, for example, use Visa’s virtual card technology and let crew members access their wages from anywhere in the world. Onboard or at home, they have the same advantages that the land-based community takes for granted, such as mobile top-ups and card-to-card transfers, online shopping and use with mobile wallets.
There are any number of issues which crews come up against with Cash-to-Master; the additional costs of making wire transfers, waiting for wire transfers to complete, and the risk of carrying cash on your person to name a few. And for the ship’s master, particularly on a cruise ship or passenger ferry, there is a the very real danger of carrying on board the enormous quantities of cash needed to pay every staff member at sea.
A large number of shipowners and managers have started migrating towards digital payments but, as can be expected when a familiar system is in place, there tends to be resistance to change. However, because Covid-19 has created a scenario where Cash-to-Master is simply untenable, many companies who might have postponed adopting a digital payment system, now feel real urgency. And as seafarers increasingly experience the advantages of using a card system instead of cash. I believe digitalization will become a key consideration when choosing a management company, in the same way that access to wi-fi is crucial today.
Seafarers have been weathering incredibly difficult times; many are stranded on ships, and even if they are able to disembark, it is almost impossible to get a flight back home. The pandemic has finally created the environment in which the maritime industry is going to move away from cash. And for some time, digitalization has been making inroads, Covid-19 is the catalyst for its adoption.