March 29, 2024

In the context of legislative amendments and governmental coronavirus bailout packages, companies are aggressively lobbying in a bid to maximise their profits. In the US, commentators describe a lobbying gold rush — in the EU, opportunism under shelter of low-transparency virtual meetings: despite all the talk of criminals taking advantage of the outbreak, the table is set for a corporate feast of profiteering.

The widespread impact of national coronavirus isolation measures has led governments around the world to unveil massive financial bailout packages to protect their economies. In the US, President Donald Trump just signed off on a $2 trillion bailout package, the largest in history. While, in Europe, disagreement has delayed the exact outline for an EU rescue package, the European Central Bank predicts that €1.5 trillion is needed to protect member states.

Taking advantage of the feverish legislative pace during this period, companies are turning ever more to lobbying groups to pressure lawmakers into bending the spending criteria and the details in their favour.

“We see a lot of lobbying happening. There’s no doubt there’s a flurry,” said Margarida Silva, a researcher and campaigner for Stitching Corporate Europe Observatory, a pro-transparency NGO in Brussels. “Extra efforts on transparency are crucial in these times,” she said, noting that video-lobbying is blurring the line between casual calls and formal meetings.

A similar, though even more concentrated situation is being seen in Washington.

“The only industry that hasn’t been slowed down by the virus is the lobbying industry,” said Representative Ro Khanna, a Democratic congressman for California.

According to Khanna, lobbyists have been “inundating people on the Hill with emails, calls and texts.” The atmosphere has been compared to a sort of lobbying gold rush by political insiders, thematically consistent with the surge in global purchases of gold bars.

Fintech industry sees advantage

The Fintech industry is lobbying for greater involvement in the means of access to rescue loans in the US. An industry group representing notable non-bank financial companies, such as PayPal and Square, sent a letter to congress urging lawmakers to make use of their digital solutions for the distribution of bailout loans.

“Small businesses are not well served by traditional financial institutions, nor will existing federal small business loan programs deliver funds soon enough…Any federal small business loan program must leverage digital advances in the marketplace to ensure that stimulus can reach those business most in need,” the letter read.

What would be required, however, is legislation that waves the current regulatory obstacles in place, preventing these non-bank lenders from channelling SBA Disaster Assistance Programs. For some, this has the appearance of a bid to erode the traditional barriers in place preventing these firms equivalence with genuine banks. For them, the pandemic is a good opportunity to make sizeable regulatory ground.

A two-pronged approach

At the same time, alternative payments companies are subtly discouraging the use of cash on the grounds of outbreak control. They suggest, despite evidence to the contrary, that digital payments are a safer option for shoppers that limit their contact exposure.

“People default to what’s familiar, unless there’s something to jolt you out of it,” Jodie Kelley, CEO of the Electronic Transactions Association, said. “Contactless payments have come up as a new option for consumers who are much more conscious of what they touch.”

Small efforts to engage with the media and produce targeted articles build upon larger misinformation cycles and capitalise on existing hysteria. These are bolstered by the misguided actions of certain governments, already with pro-digital payments agendas, as has been seen in India.

Taken together, the evidence suggests that for digital payments companies, despite the crisis, the push continues and business is as usual.

Given that shoppers are just as exposed to transmission from a phone screen as a banknote, and that experts believe coronavirus is far more likely to be contracted from direct person-to-person contact, a certain level of gamesmanship is apparent in the efforts of these businesses.

Just as there might be a reckoning in the aftermath of the outbreak over those unnecessarily claiming financial assistance, those companies and individuals who have cynically used the crisis as a means for profit or that have engineered undue panic can expect harsh public scrutiny on the other side.

Facebook Comments

Add comment

Your email address will not be published.

Connect with Facebook

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Ralph Cook