Payment choice is a good thing that came out of the pandemic, but it’s gotten so complicated that e-commerce players need to optimize now so the complexity doesn’t cause shoppers to abandon their carts en masse.
In a conversation with PYMNTS, PayU chief technology officer Ronen Morecki discussed the dizzying array of choices available now and how traders need to see things differently.
“You have to make sure that once a user wants to pay you, they are actually able to pay. [Given] payment approval rate, not all payment transactions end in success. You want to improve that,” he said. Payment service providers (PSPs) like PayU facilitate checks on payment complexity in several ways to ensure more conversions.
Noting that more and more merchants are now selling overseas in multiple countries using localized payments, he said e-commerce businesses must master the art and science of offering the best payment methods at the time. optimal customer journey.
Outlining a litany of new payment methods, systems and regulations that can lead to declines, fraud and chargebacks, Morecki said it highlights the need for better orchestration of payments. This decision-making increasingly opens the way to more streamlined flows.
“The logic is getting more and more complex, and today’s good vendors who do real optimization, give tools to make those decisions very easily, very quickly, and without needing to develop or code,” said- he declared. He used PayU as an example, noting that its decision engine “allows you to choose what goes to fraud risk management, what goes to billable collateral, what goes to 3D Secure,” and other ways to upgrade transaction routing.
Decision Making delivers between 5% and 20% revenue improvements for merchants who perform smart routing, applying friction where the data suggests and mitigating it in other cases.
“Every transaction we save is money for the merchant, and every fraudulent transaction we don’t block is fraud and chargeback,” he said.
See also: Payments are a digital passport for businesses seeking access to Latin American consumers
Flavors of fraud
As fraud reaches record levels in an economy that has become heavily digitalized over the past two years, payment service providers are rightly obsessed with strengthening their defenses against it.
Labeling fraud and risk as two world-class challenges facing all merchants today, Morecki called out fraud detection methods like 3DS and more, saying, “all of these come into play when you do optimization. If you do the optimization right, with the same website, with the same products, with the same services, with the right optimization, you can significantly increase your sales.
Good thing too, because these services all cost money to use. This often leaves merchants baffled by the back-end system choices that allow all this payment option for consumers. Useful services like paid warranty, for example, eat away at profits.
“The difference between these services, and I’m talking about optimization, is that each one costs something. There is a cost to use the billable warranty,” he said. ” It’s quite expensive. There are also costs associated with using risk providers and dealing with risks. How do you optimize them all? »
Using a PSP that understands how to optimize with cost controls at its core is a great start. For example, he said, sending everything to 3DS from the get-go might not be the most efficient or cost-effective solution.
“There are rules about what you should send and what you don’t send, but for those you don’t send to 3DS,” he said, “do a risk assessment to protect yourself, and based on this score, decide whether or not to accept the transaction.
Here’s what an orchestrated deal flow looks like and how it streamlines high volumes of digital transactions, using data signals to apply risk friction only where it’s needed.
See also: Africa’s digital future beyond mobile money
No code — and ‘coopetition’
In the orchestration space, no-code integrations are gaining traction with merchants for simplicity and efficiency in the challenges they face in digitizing payments. Morecki said they allow businesses to easily customize their payment interface to optimize the user experience.
“If you [make] the payment experience, the extremely simple and extremely transparent payment experience, you will probably optimize this part of the payment experience,” he added. “Its very important.”
Managing localized payments is another way for merchants and PSPs to optimize the growing trend of cross-border commerce, he said. Confusion multiplies when entering foreign markets, and merchants limit options region by region – focusing on the payment methods preferred by consumers in each specific geographic area. This means, for example, working with PIX in Brazil and iDEAL in the Netherlands, offering installments in places like Turkey where there is a strong preference to buy now, pay later and accept cards everywhere.
“Offering these options at the right time to the right user can dramatically increase that user’s payment funnel and success,” he said. “Where possible, allow the user to store credentials, especially in products where there are repeat customers, repeat purchases, do not require the user to redo all payment settings again and again with every purchase.”
He gave the example of the online travel agency (OTA) Kiwi, which has optimized its site for many languages and allows customers to pay by any means they want.
“They took those two settings, currency and language, and they show you different payment pages based on that,” Morecki said. “If you choose Chinese, for example, or Chinese Currency, you’ll see Alipay as one of the payment methods. If you choose something else, you’ll see PayPal and Cards.
The optimization needs of the new wave of digitization could also usher in a new era of “‘coopetition’ – cooperation and competition – among the same vendors,” he told PYMNTS.
This is where flexible orchestration through platforms such as PayU and others becomes more important, as solutions need to work together to achieve the best results.
“I think we’re going to continue to see more and more companies coming together. There’s no one vendor that can go all out with this complexity,” he said, adding that this is where a platform can orchestrate services. “No single supplier in the world can offer all the options, all the payment methods, all the countries, you always have to work with several suppliers.”
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