The “platformization” of various business verticals promises to streamline online commerce.
For example, digital freight platforms, such as Uber Freight, Convoy and Transfix, have transformed the traditional logistics and transportation industry. These platforms connect shippers with carriers using digital marketplaces, leveraging technology to optimize routes, reduce empty miles and streamline operations.
There are consumer-facing platforms as well, such as Airbnb, which disrupted the traditional hotel and lodging sector.
But as Annabelle Frank, chief commercial officer at Loyalzoo; Landon Stafford, vice president of integrations at Groups360; and Joe Meuse, vice president of product at Spreedly, said during a panel discussion with PYMNTS, simply matching supply and demand is not enough. That may be the essential value proposition of a “platform” approach, but when it comes to payments, customizing according to customers’ preferences is essential, regardless of how complex the behind-the-scenes processes and technology might be.
As Spreedly’s Meuse stated, “Nobody wants to go fish out your wallet when you’re making a purchase. And if it’s an impulse type of purchase, you are highly likely to abandon your cart and walk away if you have to go find your card.”
Offering the right mix of payments options, at the right time, can help cement a competitive advantage for these platforms and the merchants they onboard.
Spreedly has an orchestration platform in place that facilitates payments processing for client firms, including platforms and their sub-merchants.
Frank’s firm, Loyalzoo, provides loyalty solutions for small- to medium-sized businesses, enabling those SMBs to set up their own memberships and recurring payments programs and save cards on file. In doing so, those merchants can operate “as a brick-and-mortar store but be able to use card not present payments,” she said.
When a customer walks in, the payment card is saved on file and the customer can walk back out, having paid with their loyalty programs, wielding their mobile devices.
Of the payments themselves, she said, “the transactions just take a couple of seconds — and you feel as if you’re having an experience. Combining eCommerce with in-store payments has been a big shift.”
Groups360 brings global hotel chains and travel organizers arranging group bookings together, Stafford said.
“If you think historically about booking group rooms,” he said, of the meetings and events industries, “this has always been done through an RFP process. The ability to purchase directly or to commit to a purchase has never been put in the hands of a consumer on an electronic platform before.”
This increases room “take” rates and reduces the costs tied to the sale, he said.
Frank and Stafford said that along with their efforts to transform the interactions between the two sides of their platform models, payments are a critical consideration, and complexity is a hallmark inherent to those transactions.
As Stafford noted, “we do have a multitude of types of payments that are required.”
The payments can be scheduled, or done as pre-payments, to name just two examples. The ability to move a three- or four-week negotiation process to a two-minute transaction online remains the core objective.
“What’s happening in the back end are tremendous amounts of evaluations about the type of customer, the type of business, the supplier requirements for that business, and, therefore, the way our platform would initiate transactions with a gateway or an orchestration partner,” he said.
In the age of eCommerce, no merchant can go it alone, Meuse said.
“It’s complex for a single merchant to orchestrate and optimize their payment stack,” he explained. “Even if you’re a global business, different parts of the world, different business divisions” might mean that half a dozen processors might be in the mix. The challenges are even more pronounced for platforms that have thousands of merchants, each of them with several gateways that they may want to use.”
Meuse said that about half of his firm’s customers are platforms, and “an overwhelming number of merchants that we end up providing solutions for come through those merchant platforms.”
In detailing their respective relationships with Spreedly, Frank and Stafford said that having their platforms partner with a platform, so to speak, ensures that payment details are kept secure, that 3DS and compliance mandates are satisfied, and that alternative payment choices are offered on a market-by-market basis.
Orchestration, said Frank, helps migrate data from one processor to another, giving merchants the flexibility to stay with the card processors they prefer, while ensuring that authorization and conversion rates are high.
The panelists noted to PYMNTS that payments are no longer a cost center. They can be a strategic endeavor that sets one platform apart from another, as multiple payment types and alternative payment methods can be used in a single transaction.
“There’s a lot of change happening,” said Frank, surrounding how customers behave, how merchants behave, and how those two worlds are merging together.”
And, Meuse said, with payments orchestration in the mix, “the world of payment methods is opened to your platform.”
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