Multiple ecommerce markets, one strategy: An exclusive interview with PPRO

The volumes speak for themselves. The industry is at an inflection point. In April alone, global ecommerce sales were up by 209%. In the same month, PayPal’s branded-checkout volume grew by 43%. Since the beginning of the year at PPRO alone, we’ve helped our PSP partners support 60,000 merchants to process 25 million transactions worth over EUR 1.5 billion. That’s an incredible volume for just a couple of months. 

If you look just at ‘firsts’: According to a survey, 39% of UK consumers alone have signed up for a new online service or subscription during lockdown. And that isn’t just for TV streaming and similar digital services, it also includes things such as meal boxes and fitness memberships. 

What do you think the biggest impact of this change will be? 

There are whole new demographics coming online, particularly among affluent older consumer groups who have previously preferred the in-store experience. They are not familiar with the new sites they’re on and they might be a bit hesitant to click the ‘buy’ button. For these demographics, offering a trusted payment method is one of the most effective ways of winning their loyalty. 

For example, let’s say a consumer goes onto a new site to buy something they would previously have bought in a store and they see only card options. But they are Dutch and prefer iDEAL, or they are Chinese and almost exclusively use Alipay and WeChat Pay. Chances are that the shopper will abandon the cart and look elsewhere for the product – and payment experience – they want. 

Merchants that want to either acquire new customers or retain existing ones must support the payment methods for which their customers have a preference.  

What should retailers and payment providers understand about this moment?  

That it’s a huge opportunity. Right now, it’s a challenge to meet increased volumes and to operate in this environment that’s moving faster than ever. But over the next few months and years, as shoppers switch to making the majority of their purchases online, ecommerce and digital payments are going to have growth prospects that are likely to exceed anything we have seen since the early days of the internet. Players who do not embrace the current change will be left behind with a significant competitive disadvantage.   

What do we need to do to seize those opportunities? 

Be able to move fast and provide consumers with a slick, seamless user experience – which includes being able to build the trust and reassurance they need at checkout. And that means moving away from slower, older approaches and adopting agile and flexible working methods. I compare it to data centers ten years ago. There was a debate then about whether to build on-premises or to work with partners such as AWS.  

Today, no one is having that debate. It’s clear that working with cloud platforms offers flexibility, response times, scalability and cost efficiencies that building your own data center just can’t compete with. Payment service providers (PSPs) and retailers need to move to a similar model for their payments with a local payments platform-as-a-service.  

What is a payments platform-as-a-service? 

Instead of integrating dozens of popular local payment methods themselves, a PSP works with a specialist partner – the platform-as-a-service. This spares the PSP the legal, regulatory, and technical overheads of negotiating with and integrating each new payment method. Instead, they essentially only have to tick the option to offer that payment method, and the platform partner does the rest.  

This process gets both the PSP and its merchants to market faster. It reduces costs massively. And because the payments platform-as-a-service provider has far more experience working with local payment methods throughout the world than any one PSP can, it can provide a level of technical quality and additional services that would be impossible otherwise. 

One-fifth of all cart abandonments could be traced to the lack of the customer’s preferred payment method. Payments-as-a-service is the best way to make sure that doesn’t happen, even when you’re moving fast to break into a new market or demographic.  

So this is about more than just time to market? 

Absolutely. A payments platform-as-a-service will get you to market faster but it also gives you a much greater level of support – and that means a better experience for PSPs, merchants and end consumers. 

And we’re not just talking about support with things such as technical integrations. An experienced payments platform-as-a-service will usually be able to help PSPs and merchants with local market expertise, operational advice and so on.  

If their platform is sufficiently advanced, they should also be able to help by adding extra features that payment methods may not natively support such as facilitating chargeback or even over-chargeback — important in some markets when dealing with returns. The best platforms can also offer advanced anti-fraud and know-your-customer services which not only accelerate time to market but also help control and mitigate risk.  

Do you have a parting message for Paypers readers?  

The next few years will be a time of tremendous opportunity for online retail, cross-border ecommerce and for payments. To seize that opportunity, companies need to act now to make our operations flexible and fast moving but also as intelligent as possible. Only by doing this, can we dynamically reconfigure the way we work in order to meet customer expectations as they change and develop.