Commerce used to be purely physical. Then, we moved online and went mobile — and global.
eCommerce is now made up of a range of interconnected ecosystems, where consumers engage in a wealth of activities that span online and offline interactions, and even cross borders.
For instance, a consumer in Asia can play a game on a platform based in the United States and use a digital wallet to pay for it, and a family in Brazil can buy electronics to be shipped, choosing PIX to pay. Even social networks have embedded payments, and the connected economy grows day by day.
Yuval Ziv, president at Nuvei, told PYMNTS’ Karen Webster that these ecosystems add a level of complexity to commerce even as they bring the world to consumers’ doorsteps. Merchants issue cards associated with brands, checkouts vary depending on the region and sellers can gain or lose sales depending on how well they gauge the interests and preferences of their chosen markets.
The mobility industry offers a case study here, he said, where travelers used to have to get cash at an exchange kiosk, carry the new denominations with them and pay with coins and bills. However, the rise of apps and payment platforms made cross-currency transactions into a user-friendly experience, completed with a single click.
The payments processing industry has changed throughout the past seven years, to the point where even the notion of what payments processing is has changed. That’s happened as FinTechs and other startups have entered the space and disrupted those back-office functions.
“In the past, payments were considered to mainly be a cost center,” Ziv said. That’s no longer the case.
Now, he said, payments can be revenue drivers. Payments managers are taking part in high-level strategic discussions, interacting with marketing departments and helping craft initiatives that target new customers and seek to beef up loyalty with existing customers.
That shift comes in tandem with the fact that there’s much more data available now than there was just a few years ago. It’s become easier to drill down and gain visibility into acceptance rates and the end-user experience.
The infrastructure that works behind the scenes, he said, must be able to divert traffic — ensuring, for example, that if a transaction is declined for insufficient funds, there is another alternative payment option available, keeping the consumer engaged with a merchant.
To get there, Ziv said merchants need to customize their payments functionalities and promotional offers across parameters that include product, location or even seasonality (during holidays, for example).
Marketplaces offer a springboard for boosting global reach. There are special challenges in place for those platforms, Ziv noted, as they strive to onboard sellers and facilitate payments and payouts in as streamlined a manner as possible.
Taking it to the Next Level
“Customization takes this all to the next level and makes sure loyalty and confidence are increased throughout the shopping experience,” Ziv said.
As companies across a range of verticals seek to broaden their markets and tap into new customer bases, he said that “access to data that helps understand the needs and preferences of users is becoming incredibly important.” That data can help the enterprise do more than just put preferred payment methods out in the field — it can also be harnessed to ensure that consumers actually complete their transactions.
Ideally, Ziv said, the merchants would leverage that data so that the shopper today that comes again tomorrow would be “remembered” for the card and digital wallets they used, with everything set up and in place for the next transaction.
Related: Nuvei, Wix Team on Streamlined Payment Processing
In order to capture as much business as possible, merchants have to accept the Visa and Mastercards of the world. More recently, they have also had to make sure they work with PIX in Brazil, for example, or iDEAL in the Netherlands. In countries that have large unbanked or underbanked populations, traditional credit cards may not be prevalent, but prepaid cards may be favored by consumers.
Beyond the consumer-facing interactions, marketplaces need to know how to split payouts between different sellers, across different payment modalities. Different verticals have nuanced payouts. Online gaming, for example, is marked by micropayments.
“If you are missing these payment methods — even if it’s just one out of several — you’re leaving aside portions of your audience and reducing acceptance rates,” Ziv said, especially when it comes to subscriptions or recurring payments.
Tokenization, he added, can play a role in satisfying those payment preferences while also managing fraud and reducing false positives. With tokenization, the merchant outsources liability while conforming to 3D Secure specs and requirements, Ziv said. Along the way, the billing cycle gets shortened as merchants “recognize” users across all manner of transactions.
“There’s a smoothness to flow that streamlines the entire transaction and increases conversions as users transact safely,” he said.
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