Es­sen­tial shop­ping guide for a dig­i­tal com­merce gate­way

Financial Nigeria Magazine - - Contents - Suresh Ra­jagopalan By Suresh Ra­jagopalan

Dig­i­tal com­merce is pro­gress­ing rapidly. It is es­ti­mated to reach $4 tril­lion in 2020, fu­eled by growth in pay­ments and wide­spread adop­tion of smart phones, ac­cord­ing to eMar­keter. To fully cap­i­tal­ize on this op­por­tu­nity, pay­ment ac­quir­ers need an un­der­ly­ing pay­ment pro­cess­ing engine and grow in line with rapidly evolv­ing mar­ket and busi­ness needs. Fi­nan­cial Soft­ware and Sys­tems pro­vides a quick shop­ping check­list to em­power ac­quir­ers to select the right un­der­ly­ing in­fra­struc­ture and achieve their dig­i­tal com­merce goals.

Plug and play omni-chan­nel pay­ment pro­cess­ing

The fu­ture of pay­ments is real-time, open and un­en­cum­bered by busi­ness and chan­nel si­los. As con­sumers be­come more so­phis­ti­cated in their dig­i­tal en­gage­ment with brands, the Gate­way needs to sup­port the pro­lif­er­a­tion of new chan­nels. For ex­am­ple, if a mer­chant's tar­get cus­tomers show high en­gage­ment lev­els on its so­cial me­dia han­dles, al­low­ing cus­tomers to make a pur­chase from Face­book or Twit­ter, with­out be­ing redi­rected to a third-party pay­ment web­site can im­prove con­ver­sions and sales.

Pay­ment ac­quir­ers need to ef­fec­tively sup­port mer­chants in their dig­i­tal­iza­tion jour­ney by tak­ing the com­plex­ity out of the pay­ments in­fra­struc­ture and mak­ing it eas­ier for them to ac­cess pay­ment pro­cess­ing ser­vices with­out re­quir­ing them to know its 'nuts and bolts'. A uni­fied pay­ment pro­cess­ing plat­form for trans­ac­tions orig­i­nat­ing from any chan­nel (in-store, mo­bile, so­cial me­dia, on­line, IVR), with sup­port for a range of in­ter­na­tional and lo­cal pay­ment meth­ods can help mer­chants ex­pand their busi­ness. Fur­ther APIs pro­vid­ing a “plug and play” en­vi­ron­ment to en­able on­line pay­ments and mo­bile SDKs to fa­cil­i­tate in­te­gra­tion into ex­ist­ing na­tive apps, ac­cel­er­ate time-to-rev­enue from weeks to a few days.

For ac­quir­ers, the abil­ity to ex­tend mul­ti­chan­nel sup­port raises switch­ing costs and helps ring-fence mer­chant ac­counts. For mer­chants, how­ever, the abil­ity to con­sol­i­date cus­tomer pay­ments un­der a sin­gle pay­ment pro­ces­sor, sim­pli­fies ser­vice man­age­ment by elim­i­nat­ing calls to mul­ti­ple ven­dors as well as cre­ates an­nual sav­ings on pro­cess­ing fees, trans­ac­tion charges, and rec­on­cil­i­a­tion man­age­ment.

Sup­port­ing multi-in­stru­ment, mul­ti­c­ur­rency com­merce

Whether it is to im­prove do­mes­tic sales, or to achieve suc­cess­ful ge­o­graph­i­cal ex­pan­sion, the abil­ity to sup­port mul­ti­c­ur­rency com­merce is the key. Do­mes­tic cards, for ex­am­ple, are widely used for pay­ments in many Euro­pean coun­tries. An RBR study, “Global Pay­ment Cards Data and Fore­casts to 2021,” re­ported do­mes­tic cards form 28% of to­tal spend­ing across Europe, and more than 60% in Bel­gium, Den­mark, France, Ger­many and Nor­way, coun­tries where dual-badged debit cards are is­sued and used widely. Like­wise, in In­dia, Ru­pay forms 30% of all debit cards is­sued in the sub-con­ti­nent. An­other con­sid­er­a­tion is the num­ber of cur­ren­cies sup­ported and an abil­ity to of­fer cus­tomers an op­tion to pay in their do­mes­tic or lo­cal cur­rency.

De­liv­er­ing op­ti­mized check­out ex­pe­ri­ences

Shop­ping cart aban­don­ment rates, due to con­fus­ing and lengthy check­out pro­cesses, range between 10% and 30% across re­gions. Pay­ment meth­ods that in­volve redi­rect­ing a mer­chant's cus­tomers to an­other app or a web­site to com­plete the pay­ment fall in this cat­e­gory. Pro­longed re­di­rect­ion time or an in­con­sis­tent look and feel, in­creases the po­ten­tial like­li­hood of cus­tomers aban­don­ing the trans­ac­tion. Of­fer­ing mer­chants a white-la­beled ser­vice they can brand greatly im­proves trans­ac­tion com­ple­tion time.

Fur­ther­more, pay­ment pro­cesses such as two-fac­tor au­then­ti­ca­tion or 3DS se­cure,

in­tro­duce fric­tion in the check­out process and limit the num­ber of com­pleted trans­ac­tions. The abil­ity to sup­port fric­tion­less check­out pro­cesses, for ex­am­ple debit and PIN, (which en­ables cus­tomers to use their ATM PIN for trans­ac­tion au­then­ti­ca­tion) adds no­tice­able speed and sim­plic­ity. Fur­ther sup­port for re­cur­ring pay­ments by stor­ing pay­ment cre­den­tials and ex­e­cut­ing pay­ments “in the back­ground” with­out a cus­tomer's di­rect in­volve­ment op­ti­mizes the trans­ac­tion ex­pe­ri­ence.

On-de­mand scale to max­i­mize trans­ac­tion suc­cess

The de­mand for pay­ment pro­cess­ing ca­pac­ity is un­even and varies, based on day and time. For ex­am­ple, in In­dia, the In­dian Rail­ways, the largest e-com­merce mer­chant in the sub-con­ti­nent, ex­pe­ri­ences five times the nor­mal traf­fic in the “Tatkal” hour, (a two-hour in­stant book­ing win­dow for travel within 24 hours). An­other ex­am­ple is Ama­zon's third an­nual Prime Day in July 2017. The event set a record for global or­ders sur­pass­ing Black Fri­day and Cy­ber Mon­day. Dur­ing the 30-hour pe­riod, mil­lions of cus­tomers across 13 coun­tries pur­chased prod­ucts, sur­pass­ing 2016 sales by 60 per cent.

Ac­quir­ers need sys­tems to seam­lessly process a large vol­ume of trans­ac­tion, es­pe­cially dur­ing sea­sonal events with­out over-pro­vi­sion­ing ca­pac­ity. Such events present unique chal­lenges and re­quire care­ful peak ca­pac­ity plan­ning and pro­vi­sion­ing. Hy­brid de­ploy­ment mod­els en­abling ac­quir­ers to pur­chase ca­pac­ity on­de­mand to ser­vice high-traf­fic bursts can help ac­quir­ers main­tain a con­sis­tent qual­ity of ex­pe­ri­ence and do so at a rea­son­able cost.

The Gate­way provider needs to sup­port dy­namic scal­ing and descal­ing of pro­cess­ing ca­pac­ity on-de­mand, to en­able smooth trans­ac­tion han­dling dur­ing high-load pe­ri­ods. Fur­ther­more, built-in ca­pa­bil­i­ties such as in­tel­li­gent trans­ac­tion rout­ing between ac­quir­ers helps load-bal­ance traf­fic dur­ing pe­ri­ods of in­tense trans­ac­tion den­sity. Like­wise, batch pro­cess­ing for off­line trans­ac­tions al­le­vi­ates ca­pac­ity con­straints. Mer­chants can up­load a file di­rectly onto the Pay­ment Gate­way, elim­i­nat­ing the repet­i­tive and time-con­sum­ing process of send­ing each trans­ac­tion in­di­vid­u­ally. When the Gate­way re­ceives the batch file, it makes a sin­gle call to the net­work to get ap­provals on all the trans­ac­tions at once.

Strength­en­ing se­cu­rity to tackle evolv­ing fraud risk

The free­dom to pay any­where, any­time, and on any de­vice comes with an in­crease in re­spon­si­bil­ity to se­cure cus­tomers' sen­si­tive pay­ment data. Data se­cu­rity is a top pri­or­ity and re­quires on­go­ing, it­er­a­tive mea­sures to stay ahead of fraud­sters. Mer­chants lose money, but th­ese in­ci­dents also eat away at cus­tomer trust and in­crease op­er­a­tional com­plex­ity.

In ad­di­tion to manda­tory PCI cer­ti­fi­ca­tion to se­cure the trans­ac­tion en­vi­ron­ment, trusted Pay­ment Gate­way providers de­ploy to­k­eniza­tion tech­nol­ogy to shield against fraud­u­lent ac­tiv­ity. To­k­eniza­tion is the process of sub­sti­tut­ing a cus­tomer's PAN (Pri­mary Ac­count Num­ber) with a “to­ken” – in­for­ma­tion that is use­less to a hacker. As part of the PCIDSS cer­ti­fi­ca­tion, card data is en­crypted from the mo­ment the card is swiped, while the data is in tran­sit, all the way to au­tho­riza­tion, pre­vent­ing a mer­chant's sys­tem from ever see­ing or touch­ing the sen­si­tive PAN data. Col­lec­tively, th­ese se­cu­rity mea­sures can dras­ti­cally ra­tio­nal­ize PCI com­pli­ance scope and costs.

De­liv­er­ing unique rev­enue-gen­er­at­ing, value-added so­lu­tions

In­creas­ingly, large-scale mer­chants are ap­proach­ing dig­i­tal pay­ment ca­pa­bil­i­ties as strate­gic to their over­all cus­tomer en­gage­ment, rather than an es­sen­tial cost of do­ing busi­ness. To cap­i­tal­ize on this op­por­tu­nity, ac­quir­ers need to in­te­grate ad­ja­cent busi­ness ser­vices and en­able new func­tion­al­ity to lock-in mer­chants and grow their share of the busi­ness. Rather than de­ploy mul­ti­ple stand­alone so­lu­tions, look for ven­dors with a breadth and depth of ex­per­tise to lower over­all cost of own­er­ship and speed time to mar­ket. So­phis­ti­cated ven­dors an­swer this call by help­ing ac­quir­ers de­liver more value to their clients' pay­ment ex­pe­ri­ences. A suite of cus­tom­iz­a­ble, easy-to-in­te­grate, added value ca­pa­bil­i­ties in­clud­ing wal­lets, gift cards, data an­a­lyt­ics and loy­alty, can help mer­chants in­crease bas­ket size and help pro­ces­sors dif­fer­en­ti­ate their of­fer­ings.

As­sur­ing 24/7 sup­port for non-stop pay­ments

Dig­i­tal com­merce is, by def­i­ni­tion, a 24x7 op­er­a­tion. Slow ser­vice re­sponse or un­planned dis­rup­tions, even last­ing a few sec­onds, can have an ir­repara­ble busi­ness and rep­u­ta­tional fall­out, trig­ger­ing mer­chant at­tri­tion. To cre­ate dif­fer­en­ti­a­tion by of­fer­ing a higher level of mer­chant ser­vice, fi­nan­cial in­sti­tu­tions must as­sess the pay­ment pro­ces­sor's global reach and breadth of ex­per­tise to pro­vide world-class sup­port as well as de­liver an as­sured and con­sis­tent qual­ity of ser­vice. A com­pre­hen­sive set of ser­vice man­age­ment tools and ca­pa­bil­i­ties to proac­tively mon­i­tor trans­ac­tion streams around-the­clock in real-time and iden­tify and trou­bleshoot po­ten­tial problems be­fore they ever es­ca­late into an ac­tual event are cru­cial.

Trans­ac­tion in­sights such as mon­i­tor­ing re­sponse time and cor­re­lat­ing with aban­don­ment rates, iden­ti­fy­ing heavy traf­fic mer­chant lo­ca­tions can aid de­ci­sion­mak­ers make vi­tal de­ci­sions that im­prove the speed, qual­ity and re­li­a­bil­ity of ser­vice they can of­fer to mer­chants.

The list of pri­or­i­ties may vary based on tar­get mer­chant de­mo­graphic and stage of ma­tu­rity of the ac­quir­ing mar­ket in a re­gion. For in­stance, in highly com­pet­i­tive, new-growth mar­kets, scale and pric­ing may be the most sig­nif­i­cant con­sid­er­a­tion whilst added value ser­vices may be higher on the list in more ma­ture ac­quir­ing mar­kets with high card and mer­chant pen­e­tra­tion. FSS has proven cre­den­tials in the ac­quir­ing space and helps lead­ing fi­nan­cial in­sti­tu­tions, Cen­tral Banks and for­ward-think­ing mer­chants around the world to de­velop omni-chan­nel pay­ment ac­cep­tance ser­vices.

The free­dom to pay any­where, any­time, and on any de­vice comes with an in­crease in re­spon­si­bil­ity to se­cure cus­tomers' sen­si­tive pay­ment data.

Newspapers in English

Newspapers from Nigeria

© PressReader. All rights reserved.