What’s New?

At ZOOZ, we continuously strive to improve our products and enhance our offerings. The key is flexibility, variability, and optimization— and these three components go hand in hand to perfect payment stacks and optimize their performance. Here’s a quick recap of our latest feature upgrades: 

New Product Features 

New product features to extend your business possibilities. The latest  additions include: 

Webhook additions

Merchants are now able to resend the latest webhook-events for payments. This feature is paramount to making sure your system is up-to-date, regardless of communication stability.  Learn more about webhooks here.

New Routing engine capabilities

Our smart routing engine is continuously enriched with new options for payment routing. Routing rules can then be adjusted to suit various business needs, changed in a heartbeat, and reflect the results almost instantly:  

1. Alternative Payment Method (APM) routing— many merchants wish to increase their offering with new payment methods. APMs (Alternative (i.e., non-card) Payment Methods) have become a popular way to pay online. Merchants are now able to maximize the performance of such payments via the ZOOZ orchestration platform, with new routing options according to specific APMs. Please note that the rule's target provider will need to support the alternative payment method you’ve selected.
2. Card type: Routing according to card type is now also available via our orchestration platform. 
3. 3DS based routing options: merchants can now route transactions based on 3DS specific conditions

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January 2021 marked the beginning of a new year and the official implementation of 3DS 2 guidelines for online transactions in Europe (the UK is due on 17 September 2021). 

3DS 2 sparks concerns in merchants and providers alike. As with many new regulations/changes, the gaps between what’s desired and what exists are profound, and require time to adjust and align with all of the players involved in making this operation work.  Let’s shed some light on what’s changed and what is required of you to comply. 

The Then vs. The Now (3DS 1 vs. 3DS2) 

While in the past 3DS was performed with the use of a OTP, The need to change 3DS grew in importance to reduce false declines and to improve the user experience while performing online payments. 

What the EMVco* realized was that online fraud continues to expand, and thus requires better validation to ensure the security of transactions and customer identification. 3DS 1 also caused a drop in conversion rates, since cardholders had to undergo an unfriendly flow.

That’s when 3DS 2 was born. Designed around the principles of Strong Customer Authentication (SCA), the significant difference between 3DS 1 and 3DS 2 is that customer authentication should now be performed with at least two of the following identification methods: "something the user knows" (e.g., password), "something the user is" (e.g., fingerprint), "something the user owns" (e.g., mobile device). 

The 3DS 2 flow corresponds with the data received from the  actions the user performs in the device (such as fingerprint authentication, device ID, IP address, and more), and responds accordingly to finalize the user’s authentication.

As regulations came into effect in 01.01.2021, SCA is now mandatory for all online transactions in Europe— Card Issuers (Banks) in Europe are now obligated to use the above two-factor-authentication for all card payments. While there are some exemptions to the above (which we'll break down shortly), merchants are still advised not to rely on exemption-flows and calculate the most secure scenarios to ensure high approval rates. 

The upside

While it may seem an obstacle at first, 3DS 2 has many benefits to both merchants and customers. Firstly, it allows payment providers to send more data to the cardholder’s issuing bank, e.g., device and order history. The bank can then use this data to recognize the customer for future purchases and prevent recurring requests for the user’s authentication. This has the potential to optimize the flow for buyers and create frictionless authentication for future purchases. 3DS 2 also gives buyers more flexible ways to authenticate their identities, e.g. via a thumbprint, app-based authentication, or a one-time password. Transactions that were authenticated will have a higher approval rate in the authorization step.

How does the new flow look like?

The flow begins when a buyer wishes to purchase an item/service. After inserting their card information, the merchant receives their request and enrolls them via the relevant 3DS flow. 

Once the issuer receives a payment request, they review the contextual data in which it was made– the type of merchandise being purchased, the buyer’s shipping location, device type, etc. 

At this point, the issuer may deem the information sufficient to approve the transaction. Otherwise, they may request the buyer to prove their identity with additional information.

While most transactions are frictionless - and occur without the buyer’s awareness - the issuer may occasionally request to perform a simple challenge to prove their identity. The issuer decides which challenge should be completed — a face recognition, a fingerprint, a one-time verification code, or else. 

After the buyer provides the additional information, the issuer then reviews it and decides whether to approve/decline the transaction. The flow is now complete. Thanks to the additional information received, the issuer can rest assured of the buyer’s identity and accommodate their request. 

The significant bits you need to know

3DS 2 is not free from potential downsides, primarily because it’s still in its formation state. Some gaps still exist between what’s desired and what exists in the field. For instance, banks are required to perform 2-step authentication flows, which means that a one-time passcode is insufficient and requires an additional step, e.g., confirmation via a bank application, fingerprint, face ID, etc. This turns out to be tricky, as even the most advanced banks—who have implemented the two-stage-verification— can still lose a hefty percentage of transactions due to 3DS.

Effect on customer experience

The new requirements may be foreign to many customers at first and can impact conversion rates and increase abandoned carts at checkout. Failure to complete payment flows can be either due to an unfamiliar authentication process or as a result of technical difficulties or broken flows at the backend.  Our data analysis team recently discovered that many banks did not manage to implement all requirements such as responsive web design, two-factor authentication, and other technological conditions that significantly affect customer experience. Conversion rates due to these gaps have plummeted to 30%-40%. 

Possible flows and exemptions

Exempting users from an SCA flow is useful since it increases the chance that the transaction will be frictionless (i.e., without an additional authentication step) and decreases the chances of user drop-outs. Suppose you are a merchant whose business model includes card-on-file like functionality or are processing one-click payments or recurring payments. In that case, you can enroll these payments via flows that are eligible for exemptions from 3DS. Bear in mind that the decision of whether to grant the exemption lies within the card issuer. Once they are exempted, the chargeback liability shifts back to you (as the merchant). Possible exemptions include:

• A Transaction Risk Analysis (TRA) -  This scenario can be implemented when a transaction is considered low risk. In that case, ZOOZ sends the authorization request to the issuer flagged as low risk (TRA flag). Be aware that the issuer may deny this claim and require strong authentication utilizing a Soft Decline response code. 
• Recurring Transactions and Merchant Initiated Transactions -  Only the subscription or recurring cycle’s initial transaction or recurring cycle will require SCA. Subsequent charges will be exempted. A transaction is deemed "recurring" if it is for a fixed amount. In case the amount changes over time (such as when some utility bills are based on usage, like electricity, telecom services, car-sharing, etc.), such transactions will be called MIT (merchant initiated transaction) and will also be exempted. In both cases, the merchant must obtain the cardholder's consent for charging the card.
• Soft decline - The card issuer always decides whether or not to honor the exemption. If strong customer authentication is deemed necessary by the issuer, the authorization will be declined using a specific reason code – Soft Decline.
• Trusted beneficiaries - this exemption enables cardholders to add businesses they trust to a list of trusted beneficiaries to be held by the issuing bank. Once trusting a merchant, which is also termed as Merchant White Listing (MWL), cardholders can complete their electronic payments without the step-up authentication when shopping at that merchant in the future. Whitelisting merchants increase frictionless user experience and hence reduces cardholders’ shopping cart abandonment. You should be aware though, that merchants cannot white list themselves, and cardholders can remove merchants from their white list at any time. As required within GDPRregulations, the consent of a cardholder is needed to whitelist a merchant.

What we do to help with your compliance

The implementation of 3DS 2 and streamlining of procedures will take some time and further adjustments of all parties involved (issuers, banks, customers, and gateways alike). To equip you with the necessary tools and peace of mind, ZOOZ has set up to do the following: 

• As an orchestration platform, ZOOZ helps you monitor and spot decreases in acceptance rates due to 3DS. Thanks to the solution’s intuitive nature, you can easily change the configuration if you spot a  drop according to your chosen parameters.  Prevalent cases might be linked to a Bank’s choice of two-factor combination. Each bank decides independently of their product and compliance strategy in regards to SCA requirements. 
• Based on online transaction monitoring, we can optimize the conversion by routing 3DS authentication type for the better performing one (3DS 1 and 3DS 2) and communicate with Card Schemes and Issuing Banks to fix issues, improve process UX, and increase conversion rates.
• Soft Decline - ZOOZ has two ways to manage Soft Decline: On behalf of the merchant, ZOOZ steps in and automatically initiates the authentication process using 3DS. The merchant is also able to handle Soft Declines via the PaymentsOS API. The decline reason code must be checked for each canceled order by retrieving the transaction details. 

What lies ahead for 3DS 2

While records reveal that 22% of payments are lost when authenticated using 3D Secure, the reasons for this are rooted deep within the gaps in field-readiness. One of our customers has recently said that while “3DS 2 is the most discussed topic in the payment industry nowadays, yet we still witness many market gaps. While we view the implementation of 3DS 2 as a positive step and recognize its importance, real-time readiness is still lacking. So it’s up to us at this point to conduct thorough, ongoing checkups to ensure that transactions are processed smoothly”.

ZOOZ, as a payment orchestration platform, makes sure to support 3DS and related flows to give our customers the flexibility to change and supervise our customers’ payment flows to ensure that even in times of uncertainty, their payment processes are secure and optimized to the max. 

Please check our Documentation for more information and drill down scenarios, implementation, and requirements to ensure your utmost compliance. 

* EMVCo is collectively owned by American Express, Discover, JCB, MasterCard, UnionPay and Visa, and was formed in 1999 to enable the development and management of specifications to address the challenge of creating global interoperability and to deliver the adoption of secure technology to combat card fraud, while enabling innovation in the payments industry. More about EMVCo, here. 

To combat credit card fraud and protect consumers, card brands like MasterCard, Visa, American Express, Discover and JCB established the PCI Security Standards Council which mandates a set of security standards for managing online payments.

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‍What is PCI DSS?

The Payment Card Industry Data Security Standard, better known as PCI DSS, is a global security standard for the acceptance and processing of credit cards. As you may already know, ensuring compliance with PCI Data Security Standards can be a challenging task. This is especially the case if your payment systems employ a patchwork of different services from different vendors. Just because the services you use are PCI compliant does not mean your operations will be considered so. PCI covers your entire cardholder data environment which not only includes the way you process payments and manage customer data but also how you connect those systems.    According to the PCI Security Standards Council, PCI DSS: “covers technical and operational practices for system components included in or connected to environments with cardholder data.” It has 12 requirements designed to achieve 6 goals. These are outlined in the PCI Security Standards Council Reference Guide and copied below:

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Do I need to be PCI compliant?

YES. If you process, store, or transmit credit card data, you're required to comply with this set of standards.

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Levels of PCI compliance

‍Each card brand has its own set of compliance levels. Depending on the level you fall into, you’ll need to adhere to a specific set of requirements. And you'll need to ensure you are compliant with 100% of these requirements as failing even ONE element will result in non-compliance. To view the compliance levels set out by each card, see - Visa, Mastercard, Discover, American Express, & JCB.

If you accept multiple card brands, there's no need to panic. The major card companies have cooperated to make it easier. Visa, Mastercard, and Discover have the same criteria. If you also work with American Express or JCB in addition to these issuers, your merchant level will be the same as given to you by Visa, Mastercard, or Discover. Your compliance level will depend on the annual number of transactions.

PCI Compliance Levels

‍PCI Compliance Level 1

‍Processing more than 6 million card transactions per year.

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PCI Compliance Level 2

Processing 1 to 6 million card transactions per year.

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PCI Compliance Level 3

‍Processing 20,000 to 1 million card transactions per year.

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PCI Compliance Level 4

‍Processing less than 20,000 card transactions per year.

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How much does PCI compliance cost?‍

There’s no clear-cut answer to this question. It depends on the current business structures you have in place, and whether or not they require significant changes to conform to PCI standards. Larger-scale merchants with complex payment infrastructures and more employees will find the costs associated with becoming compliant much higher than smaller merchants with limited operations.

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If you're a level 1 merchant with more than 6 million transactions per year, you'll need to have an onsite data security assessment by a Qualified Security Assessor (QSA). You will also need to set aside a budget to conduct regular vulnerability scanning, penetration testing, staff security training, and have dedicated resources to pay for security policy development. If you fall into level 2 and 3, audits by an external security expert might be required as well as staff training, vulnerability, and penetration testing. You'll also need to complete a Self-Assessment Questionnaire. Overall, the cost of compliance will always be lower than the cost of noncompliance. This is especially the case for larger merchants in a hyper-growth stage. Never mind the financial and reputational losses that stem from a data breach, you may be fined by card companies and lose the ability to accept credit cards altogether. That means your growth will come to an immediate halt. You may even risk going out of business!

‍What role does DSS tokenization play?

The PCI DSS requirements apply to all components that are in or connected to the cardholder data environment. This compromises of any person, process or technology that stores or transmits sensitive cardholder data. That's a lot of elements to cover!

One way to reduce your scope is to avoid storing and transmitting cardholder data altogether. That means not having any unencrypted credit card numbers, CVV or CVV2 or PIN numbers in your systems. That's where DSS tokenization comes in.

The Tokenization Process

 

Tokenization solutions do not eliminate the need to maintain and validate PCI DSS compliance, but they may simplify a merchant’s validation efforts by reducing the number of system components for which PCI DSS requirements apply.

 

Even if you've limited the existence of card details to the point of capture and the card data vault, ensured the data has no value to any potential criminal and made certain that adequate segregation exists between your platform and the card-holder data environment, you'll still need to comply with the PCI standards.

Reduce your scope with ZOOZ’s universal tokens

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ZOOZ offers several ways of collecting and tokenizing a user's card details (javascript API, secure fields, token API), each requiring a different PCI scope. Universal tokens and PCI compliant token vault reduce your PCI compliance scope significantly by enabling you to avoid storing or transmitting raw credit card data in your systems. With reduced exposure to PCI data security compliance requirements, you'll save on compliance costs and sleep better at night in the knowledge that your operations are airtight when it comes to compliance. You'll also be able to offer your customers a more secure payments experience.

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A well-designed payment stack is made to generate more money for your business. Who wouldn’t want that? But as it turns out, this concept is a bit more complex to implement in practice. As we’ve covered in recent articles, choosing a POL (payment orchestration layer) for your business is not as easy and straightforward as it may sound. First, the market is filled with different options, and while some overlapping exists between solutions, they still differ from each other and there’s not a single solution that can offer a one-stop-shop experience. On top of that, there’s the ongoing division between open vs. closed payment solutions, each with their characteristics and pros and cons, which make the decision-making even more complex. Is there a middle way? Can you get a top-notch optimization mechanism (associated with open payment solutions) with the simplicity which usually defines closed payment solutions? and moreover - can you actually do it by yourself?

Open vs. Closed ‍

It’s important to stop for a moment and redefine what open and closed payment solutions are.  At their simplest, open solutions allow you -  the merchant -  to have full control on how you route your payments and to which payment provider(s). Closed solutions won’t allow you to have that freedom of choice, but they will take the responsibility off of you by making automated routing decisions according to their own logic/algorithms. It is, therefore, a battle between tailored payment routing (with maximum payment optimization) of open solutions vs. the ‘plug-and-play’ benefit of closed solutions.

The key components of optimization 

Optimization is a process of maximizing performance and generating the highest output by investing the smallest input (e.g. minimal man-hours, money, or a combination of the two). In the payment world, optimization becomes an essential key for growth and to maximize a business's ROI. We see the following four components as important catalysts to payment optimization:

• Improved customer experience
• Data-based decision making
• Efficiency (minimum effort, maximal efficiency, better ROI)
• High approval rates (i.e. more successful payments)

How to get there

Improved customer experience

Customer experience and satisfaction are important factors that help to reduce cart abandonment and make sure payments are finalized once the user gets to the checkout process. This is an elusive process that often ends in cart abandonment. Merchants need to do everything in their power to maximize the probability of payment fulfilment. To do that, they need to offer their customers multiple payment options to pay with, a secure, easy and straightforward interface, and added tools on their side (the merchant’s) to increase the probability that transactions will be authorized (more on that is coming up next).

Data-based decision making

Payment routing and optimization should be done smartly. Payments differ in geographical areas, methods (credit cards, eWallets, etc.) and additional factors, which affect the probability of certain payments to be more or less successful when sent via one PSP or another.  Optimization is achieved by tweaking and making changes to an existing stack according to its ongoing performance. So solutions need to enable data extraction to allow merchants to change their payment stack accordingly -  i.e. to reflect the data. The chart below shows the a general division of the recorded use of payment methods in 2019. The rise in the use of eWallets is definitly a force to be reckoned with. Merchants need to be on top of their game and be aware of changes in payment trends etc.

Efficiency (minimum effort, maximal efficiency, better ROI)

Every business aims to eventually invest as little resources as possible while getting the best ROI in return. So a payment solution should be easy to operate (without added development), and has to reflect the results of the actions performed in it immediately. Check the video below demonstrating how easy rule-setting can be. Merchants can continuously tweak and optimize their rule-logic according to the data and reports they receive from the system. The easy rule-setting mechanism requires only minimal technical knowledge and allows payment teams to immediately make changes to reflect the results they see in real-time.

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High approval rates

Approval rates are affected by multiple factors - sometimes it’s a matter of one PSP that has a better transaction approval rate in certain locations or with certain payment methods, while sometimes transactions can be flagged as fraudulent (whether they are indeed fraudulent or not). To eliminate or reduce these difficulties, merchants can devise their routing rules according to their business logic. To reduce unnecessary fraud flagging, merchants need to comply with PSD2 and other mandates so that they could verify the buyer beforehand.  This is also something that a POL can help with, as POLs need to comply with regulations as well.

How POPs help you to optimize

All of the four components we’ve mentioned above should be implementable and streamlined via one place - and that’s where POLs come in. Many businesses wish to avoid - and very rightfully so - the need to add more work and programming on their side to such solutions. Often-times, the payment personal doesn't have an engineering background and since they are the main users of these solutions, the solutions should be a perfect fit for their needs and easy to operate.

We’ve mentioned before the classifications of payment solutions to closed and open. Many businesses opt for closed solutions because they are seemingly easier to operate and fuss-free. The caveat is again the lack of manual optimization options so the results are sub-optimal to what they can and should aim to. Open solutions might require more attention, but they offer far greater optimization options, which in the greater scope of things, can serve your business objectives much better. ‍

Easy optimization, DIY style

Is there a middle way? Can you overcome complexity and the need to invest many man-hours of development and monitoring and still get a perfectly customizable solution to give you the utmost optimization?

The answer is yes -  some solutions do offer a very straightforward platforms that eliminates the complexity and at the same time allows you to control and devise your business rules quickly and efficiently - without the need to invest further money and man-hours in development. That way, you can benefit from the control and adaptability of an open solution with an ease which is usually associated with closed solutions. At ZOOZ, that was (and still is) one of our core guidelines when we designed our solution: simplicity, greater control and adaptability. Specifically designed for payment teams, the solutions is both extremely straightforward and self-explanatory, while at the same time offers very high-end capabilities of routing, data-analyzing and optimization. You can dive in and open a quick (and free) demo account to get the look and feel of our solution for yourself. As mentioned above, the core pillars of optimization in payments usually revolve around customer experience, data-based decision making, efficiency and high approval rates. Eventually - and due to the nature of the payment ecosystem - solutions need to be flexible enough to allow tweaks and changes to support these core pillars. Optimization therefore is very much associated with the DIY approach of open payment platforms, and that should be taken into account when devising a payment strategy. Eventually optimization requires control from your side, and cannot be done without a certain amount of supervision, but that also doesn't mean that controlling your own system should be overly complicated.

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While COVID-19 has hit many sectors hard, e-commerce is one industry where business has boomed. With quarantines and social distancing limiting people’s ability to maintain their purchasing and spending habits in the physical world, consumers are forced to shop online. Businesses are also having to respond to new, constantly changing guidelines that require modifying the services and products they have on offer. Here's the lowdown on some of the main COVID-19-driven e-commerce consumer trends that are far from disappearing:

Social purchasing

With people unable to gather in the streets, they have been gathering on social media. An April study that surveyed over 25,000 consumers shows that social media engagement increased by 61% during COVID-19 social distancing. According to the study, overall facebook usage has increased 37%. The increase has been most considerable in the 18-34 age group, with a 40% or above usage spike on Facebook and Instagram. Chinese social media has also seen a dramatic rise in use, with a 58% increase on the social media apps Wechat and Weibo.

This increased engagement in social media has translated into more online sales. Instagram reported a 76% spike in engagement on #ad posts, as well as a 22% rise in Instagram campaign impressions from Q4 2019 to Q1 2020.

Of course, many businesses made the connection between social media and shopping long before COVID-19. In November 2019, TikTok announced that it was launching in-app shopping in the US. At that time, Instagram already had an established shopping interface, allowing users to click on a featured item on a post, and be directed to the product purchase site. Facebook’s Marketplace, a classifieds service, allowed users to pay a fee to boost their listings.

In May 2020, Facebook and Instagram took e-commerce integrations on social media one step further. Both of these social media giants rolled out Shops (Facebook, Instagram), a service that allows Facebookers and Instagrammers to buy products and purchase services right from a business’s Facebook page or Instagram profile. Instagram describes Shops as a native shopping experience, “an immersive fullscreen storefront that enables businesses to build their brand story and drive product discovery”. Facebook CEO Mark Zuckerberg described Shops as a way to support businesses whose business suffered in the wake of COVID-19, although, he adds, he sees this trend continuing to climb even once we put COVID-19 behind us. “I do think we’re going to continue living more of our lives online and doing more business online.”

Online donations

The for-profit sector is not the only market segment that’s taken a hit during COVID-19. Social distancing made it impossible to arrange physical fundraisers, or collect donations door-to-door. The income sources of musicians and other performers were hurt in particular, as concerts, tours and festivals were cancelled. Physical fitness professionals such as personal trainers and sports instructors also suffered at the hand of social distancing. These past few months have seen artists, trainers, and other businesses increase requests for donations online, via online payment services. Companies who provide infrastructure for these artists and small businesses have been supportive in accommodating these requests.

Just like social purchasing, online donations, of course, have existed before the onset of the pandemic. Amazon Smile is an established service that allows shoppers to donate half a percent of the amount of certain purchases to charity. Founded in 2013, Patreon is a subscription-based service that allows fans to make weekly payments to support creators they love. Awareness of online donation practices have existed for a while, but COVID-19 has given them a significant boost.

In April, Spotify launched Artist Fundraising Pick. Spotify artists can now add a donate button to their Spotify profile. Artists can choose to collect donations for their own work, or on behalf of a charity. In May, Spotify reported that “thousands of fans have already supported 10,000 artists through Cash App,” and that donations reached one million dollars. In addition to Cash App, artists can collect donations via PayPal and GoFundMe. Soundcloud is another major music platform that launched a donation button in April, allowing musicians to collect donations via Kickstarter, Bandcamp, Patreon and Paypal.

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Fitness businesses and individuals are jumping on the donation wagon, too. ClassPass, a giant online workout platform, has set up a donation service that allows users to donate to their favorite trainers and studios. Love Sweat Fitness, a popular wellness platform, is also requesting donations for open-to-all zoom events. Individual trainers affected by COVID-19 social distancing have also incorporated donation buttons on various social media sites. Liz Crosby, a popular Instagram yoga teacher, is requesting donations for YouTube lessons via Venmo or PayPal.

Squarespace, who hosts over 2 million live websites, posted a list of COVID-19 resources for its customers, including instructions on how to incorporate a donate button into their website.

Buy now, pay later

COVID-19 has sent unemployment rates skyrocketing, and seen millions worrying about their financial resources and credit scores. Businesses understand that customers’ ability to pay is dropping, and so are making arrangements for consumers to pay for their purchases at a later date.

Veteran “buy now, pay later” (BNPL) payment services are seeing a spike in use. Klarna a BNPL service founded in 2005, has seen an 18% spike in apparel, footwear and accessory purchases among Gen Zers (ages 18–23). In one week in April, Klarna app users’ share of spending on home and garden items grew by 26% among Gen Zers. Klarna reports an overall increase in usage. “The number of daily active users peaked at the beginning of April and reached the all-time high so far this year,” Klarna said. Paypal, who also offers “buy now, pay later” in the form of PayPal Credit, also seems to be on a good path to weathering the pandemic with its assets intact, or strengthened.

Klarna and PayPal aren’t the only BNPL services who benefited from COVID-19. Other BNPL services report an increase in their average order value, or AVO. An April 30 article cites an AVO increase of 85% for Affirm, a San-Francisco-based APNL company. Australian-based BNPL AfterPay boasts a whopping 1M new users due to the COVID-19 pandemic. Reportedly, the platform attracted “over 15 million app and site visits,” and “its retail partners got nearly 10 million lead referrals from visitors to Afterpay’s Shop Directory. These numbers put Afterpay among the fastest-growing eCommerce payment companies on the market.” According to AfterPay, there are upward of 15,000 brands and merchants that either offer Afterpay or are in the process of joining its services. These brands include, among others, American Eagle, Birkenstock, and Marc Jacobs Beauty.

SplitIt, another APNL credit app who saw a 20% AVO increase, is calling out to businesses to adjust their payment offerings in the wake of COVID-19. In a June Facebook post, The New York-based company wrote that “24% of consumers do not expect to return to shopping malls for more than six months following post-covid-19 reopenings”. Because spending habits are changing, they say, there is a “rising demand to spread costs via interest-free instalments. Online retailers need to revisit their product portfolios to include payment options that are reflective of this new buying culture.”

Even Apple has joined the Buy Now, Pay Later revolution, launching the Apple Card Monthly Installment Plan in June. The plan allows consumers to receive an iPhone immediately, paying off the product’s full amount over several interest-free installments.

Brick-and-mortar converts to online

Ask anyone with access to electricity and an internet connection, and they’ll be able to cite at least one example of a brick-and-mortar business that was pushed online during the pandemic. Physical stores saw drops in store visits as steep as 90% in one month. In the early days of COVID-19 social distancing, the grocery and food sectors were most significantly affected. 14% of shoppers in one poll reported that they started shopping for groceries online due to social distancing. The difference between 2019 and 2020 in terms of online vs. offline sales is striking: one source reports that eCommerce sales accounted for a whopping 30% of total retail sales in the US in 2020, as opposed to 11% in 2019.

Shipbob, an e-commerce fulfilment solution company, aggregates data from over 3,000 merchants who “collectively ship out millions of items every month” via the company’s fulfilment center. On June 11, Shipbob reported rolling month-to-month unit volume increases in the following categories:

• Nutrition: 49% increase
• Beauty: 48% increase
• Apparel and accessories: 96% increase
• Food and beverage: 16% increase
• Electronics: 25% increase
• Toys and games: 44% increase
• Household goods: 72% increase
• Jewelry: 13% increase

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Who are the businesses behind these increased online sales? Food delivery companies are one notable example, with restaurants being closed for sit-and-eat services due to social distancing. According to Second Measure, a company that analyzes billions of purchases, as of the end of April, meal delivery service sales nearly doubled year-over-year. People magazine compiled a list of restaurants that deliver nationally in the US, in honor of the COVID-19 epidemic. These include New York City’s iconic Milkbar, Lou Malnati’s Chicago deep dish pizza restaurant.

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Innovation and diversification

There is no question that the COVID-19 pandemic has created a new reality. For some, social distancing has necessitated a change in socialization habits. For most, the virus floated health concerns to the top of the priority list. For many businesses, the pandemic meant that they had to change modes of operation, or risk going under. According to CBS news, 722 US companies sought bankruptcy protection in March and April, a 48% increase for the same period of the previous year. Large companies that succumbed to bankruptcy during this period included Hertz, J. Crew, J.C. Penney and Neiman Marcus. But other companies have managed to keep their head above water by innovating and diversifying.

Wolt, a Finnish food delivery service that operates in 22 markets, took advantage of its delivery infrastructure to deliver beauty products on top of its existing restaurant meal offerings. Wolt subsequently partnered with grocery stores and pharmacies to offer deliveries from these businesses as well, and was able to substantially grow their online payment business.

Nextdoor, a California-based neighborhood social networking app founded in 2011, saw an 80% month-over-month increase in daily engagement. Nextdoor was able to respond in a timely and sensitive manner to COVID-19 needs such as supporting struggling local businesses and providing aid to health care workers. A Google Marketing report explains that Nextdoor created new features to address specific pandemic-related needs, but made core features easily discoverable to draw in users and retain them. Help Maps is one such feature; it allows users to indicate when they’re available to help a neighbour in need.

Businesses in other sectors have been ingenious in responding to the pandemic’s needs of the moment. Alcohol sales in Switzerland dropped by up to 25%; in Ireland, a drop of 35% was recorded in April 2020, compared to April 2019. US alcohol sales were also affected. Distilleries across the globe responded to the changing fiscal and health reality by producing alcohol-based hand sanitizer. One website lists over 800 distilleries in the United States alone that are producing hand sanitizer. Many of these distilleries sell both hand sanitizer and their core product, spirits, online.

Other sectors have shown endless creativity in responding to the pandemic. Airlines turn from transporting people to transporting cargo, with some airlines removing seats from their aircraft to create seatless jets. Huge companies like Ford and General Motors are manufacturing Personal Protection Equipment such as masks and protective clothing.

An Online Revolution

Whereas physical retail took a huge hit during the pandemic, e-commerce has benefitted from a broad spectrum of exciting opportunities. Businesses that had only existed offline have capitalized on the accessibility and simplicity of online shopping. Simultaneously, businesses that previously thrived online are doing even better, and the future looks good. A study of over 1,000 consumers predicts that by the end of 2020, market penetration for online grocery shopping will be 12%. Companies that have undergone a digital payment transformation, migrating to e-commerce or expanding their digital offerings, have no reason to go back; experts are optimistic that these trends are here to stay.

Without noticing, COVID-19 has sped up the shift the entire payment ecosystem has been expecting for years— only instead of a slow and gradual transition, many sectors were forced to condense an otherwise year-long process into just a couple of months. The surge in online commerce, contactless payment methods, digital wallets, and BNPL (buy-now-pay-later) schemes are the best representations of this changing landscape.

The new model of E-commerce is also unique in nature—not just speed. It reflects a very specific reality shaped by Covid-19; A newfound home-centric sphere that drives away most aspects of outdoor-leisure and travel, while simultaneously accelerating all things consumers can utilize indoors.

Trends reversed

As consumers focus more on home-commerce, we witness how the scope of travel and transportation switch places with other sectors like apparel, leisure (that is non-outdoor-dependent), and more. This is all logical considering the new reality, but it is pretty staggering to see a trend pretty much turn around in mere several months. The graph below shows the gradual shift over the course of 8 months, from January 2020 to September 2020 (*T&T stands for Travel & Transport):

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Does geography affect the rate of E-commerce penetration? 

The answer is both yes and no.

Our data shows that E-commerce has grown on a global scale, i.e. it has been experiencing a big increase everywhere, and across all regions.

The relative jump is what makes the difference and emphasizes the gap between developing and developed countries, and a main aspect to this is their starting point and the relative jump they had to perform.

It therefore comes as no surprise that developing countries have shown the biggest relative jump into E-commerce as  a result of Covid-19. LATAM and Africa (mainland) have been traditionally relying heavily on cash-payments and were left perplexed in light of the changing landscape. This fact pressed the need to act, and act fast. This phenomenon is also reflected in a survey conducted by the UNCTAD and its results are outlined below (respondents were requested to answer the question Since the outbreak of COVID-19, I am shopping more often online than before):

The need for Online payment solutions 

The urgency to move a business online, whether they already have some online presence or not, requires adaptations, compliance with regulations, and the ability to perfect the customer experience and flow.

Many businesses are dumbfounded when they first need to set up a new payment infrastructure, considering that the process of accepting payments is not a plug-and-play solution. The purpose of gateways and orchestration solutions - like ZOOZ - can assist with the need to accept payments and build an infrastructure suitable for a sphere pushed so quickly into E-commerce.

A gateway helps businesses to build a stable, fortified, and flexible ground to build up from—whether they are new to the payment world or are already seasoned actors. Some solutions, like ZOOZ’s PaymentsOS, have make businesses’ lives easier by allowing them to easily add providers, A/B test them, set routing rules for optimization, and more.

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Building from scratch or stepping up your game

We see a general division into two types of business-models which evolved as a result of the pandemic —the first are businesses that have already had a payment infrastructure of sorts in place, and the new reality just limelighted their need to expand and scale up their operation; and the second type is businesses new to the payment sphere, which now need to build their infrastructure from scratch. In either case, both models find themselves in need of making changes and adapting; and both can -and should- benefit from the orchestration abilities of gateway-solutions.

Moving forward

As the ripples of Covid-19 continue to hit every aspects of daily living, the payment ecosystem adequately evolves and adapts itself to cater new consumer preferences -both in the demand for certain commodities, and in their preferred methods of payment.

Either way, the linear increase of E-commerce is unlikely to cease in the near future, and we can expect to see a continuous global increase in its use on the expanse of the once popular in-store purchases. We can also expect to see the gap between developing and developed economies continuously decrease in the use of online payments.

Subsequently, the use of payment gateways, solutions, and supporting technologies also expand and grow, and businesses can benefit tremendously from strategically building their payment stack to support their current business needs, while also having in mind the post Covid-19 business reality, which has yet to unfold.

Payment orchestration platforms have become the go-to solutions for businesses looking to optimize their payment performance. The following tips show how you can utilize ZOOZ's unique solution-features to optimize the way you extract information, find payments, or make alterations to, or within your stack— easily. The small tweaks and changes affect transaction approval rates, and should therefore be added to your arsenal for ongoing payment optimization and ease of operation.

Webhooks

Webhooks are designed to alert and give you updates about your stack, but webhooks can be used for more than mere updates. They can also be integrated into your invoicing system, for example, to make the lifecycle of payments more streamlined. Learn more about webhooks here.

Payment Search

Inspecting specific payments in your system is sometimes necessary, and thanks to the ZOOZ elastic search options, payment professionals can easily narrow down payments by using the ready-made design fields or by specific search shortcuts e.g. “amount:123” to find payments according to specific identifications or search with an asterisk (*) to find payments with partial email addresses, reconciliation ID, order ID and more (e.g., “123*” to find “12345”).

Reporting Tools

Reports can be created as complex or as simple as you wish, but it’s important to be aware that there are always to extract more information from your reports and make them richer and more valuable for your BI. Adding additional fields to your reports can give you a better view of your payment’s performance whether you wish to know your provider performance, payment method used, or performance according to geographical location. All of these components add up and affect your approval rates, and should therefore be taken into account in the larger scheme of your payment operation.

Decision Engine

After extracting insights from your payments thanks to the aforementioned reporting tools, the next step is to implement these insights into your actual payment performance. To do that, you have the ZOOZ decision engine. With more than 150 different configurations, every business need can be met with ease. Configurations can be based on card issuing country, target-provider, and even the time of day in which the transaction took place. Open a free demo account today to try the routing engine by yourself!

Instant Retry

Save up to 10% of failed transactions! The Instant Retry feature, a unique ZOOZ ability, allows you to process failed transactions with a backup payment provider, to significantly increase the rate of successful transactions.

Block Payments

Occasionally you may need to avoid undesired or harmful financial traffic by setting pre-defined conditions to block payments. The ZOOZ platform allows you to easily do so via the Decision Engine -> Block Rules feature. Transactions can blocked according to specific transaction-indicators, card properties, transaction amount, or other customized features.

A/B Testing

Optimization starts with the flexibility to route payments. The ZOOZ decision engine allows easy payment routing that's powerful, simple and intuitive interface that allows you to A/B test your providers' performance, assessing where they perform best, and route them optimally. Making changes is easy, and our businesses track and adjust their routing configuration as much as they wish, and even several times a day, as their performance is impacted immediately

For additional tips and tricks, you can always consult our support knowledge-base for frequently asked questions, tools and hacks to make the most of your payments. Check it out here.

SCA requirements are scheduled to go into full effect on 14 September 2019. Following the recent document published by the European Banking Authority, many European countries have published respective statements that they will allow an extended time frame to enable payment facilitators to fully comply with regulations. The extension is mostly valid for eCommerce and card payments. Here is a breakdown of the different European countries and their statements:

Austria

Austria announced a temporary enforcement extension for Austrian cards. The enforcement should go into full effect by the end of September.

Belgium

The Belgian regulator released a formal announcement setting out the Bank's expectations regarding the regulatory technical standard for SCA of online payments.

No set timeline has been published as of now.

Denmark

Denmark released an official announcement of an 18 month extension period for SCA . The FSA emphasized that the implementation period will not change the fact that the rules on strong customer authentication will enter into force on 14 September 2019.

Finland

Finland announced a temporary enforcement extension for Finnish cards. The Financial Supervisory Authority will decide on the length of the transitional period this year after further consulting with the supervisors of other Member States.

France

The French are also working on a phased implementation plan, and have released an official document breaking down their current status and plans ahead.

Germany

Payment service providers based in Germany are allowed to make credit card payments on the Internet from September 14, 2019 initially without strong customer authentication. BaFin estimates that the card-issuing payment service providers in Germany are prepared for the new requirements, while companies that use credit card payments on the internet as payees might not be fully prepared yet.

Ireland

Ireland released an announcement stating a migration period limited only to eCommerce transactions. Therefore no disruption to payments systems is anticipated.

Italy

The Italian regulators also released an announcement stating a transitional migration period, although its length of delay has not yet been officially confirmed.

Luxembourg

The Luxembourg regulator announced a temporary enforcement extension for Luxembourg cards. The financial institutions that wish to make use of the extension period are required to inform the CSSF and back their request with a proper migration plan and timelines.

The Netherlands

The DNB (De Nederlandsche Bank) has released the regulator's intention to allow parties that were unable to prepare for SCA (for credit card transactions) a limited extension time - the amount of time hasn't been stated.

Norway

The Norwegian regulator also announced a temporary enforcement extension for eCommerce and card payments. The payment service providers who need to extend their deadline are requested to contact the Financial Supervisory Authority.

Poland

The Polish regulator also announced an extension for Polish cards, contactless payments, and eCommerce. A proper migration plan will need to be submitted by the relevant parties in order to benefit.

Slovenia

Since the authentication of the majority of card payments made in online stores in Slovenia (and the wider EU) is currently protected only by a one-time password received via a text message, such method of authentication does not meet the requirements of SCA. To ensure compliance, the Bank of Slovenia allows an extension for Slovenian payment providers with registered office in Slovenia beyond the deadline of 14 September.

Sweden

The Swedish regulator also published an announcement that allows extension beyond 14 September for SCA. The extension applies for eCommerce transactions made with card payment. A submission of a detailed plan will have to be submitted and should include the company's planned communication activities to inform e-merchants and payment service users about the new conditions.

UK

On 13 August 2019, the UK regulator announced an 18 month phase-in period for SCA requirements on online card payments. As a result, we don't expect banks to fully require SCA for online payments from UK cards until March 2021.‍

So what should you do as a merchant?

The enforcement of SCA in Europe is treated with great importance so we recommend all merchants to make all necessary arrangement to be compliant on time (i.e. 14 September 2019).

Here at ZOOZ we are following the changes and announcement closely to keep you up-to-date with all of the changes as well as to ensure our merchants' full compliance.

The proliferation of mobile technologies and alternative payment channels has made it easier for consumers to make online purchases and led to the rapid growth of e-commerce. But while digital commerce continues to gain in popularity, incidents of fraud are on the rise as the verification of customer identity in card not present transactions becomes a real challenge.

Starting in September 2019, the latest Payment Service Directive, also known as PSD2 will introduce new requirements and begin enforcement of Strong Customer Authentication (SCA) standards for online payments to combat. The 3D Secure 2 messaging protocol will be the preeminent method to help you comply with PSD2- SCA requirements. In this basics guide, we’ll explain what 3D Secure 2 is, its benefits, and help you understand what you’ll need to do to get your operations 3D secure 2 compliant.
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What is Strong Customer Authentication (SCA) under PSD2?
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‍In 2015, the first Payment Services Directive (PSD1) was introduced to regulate payment services and providers throughout the European Union and European Economic Area. Since then, rapid changes in the payments sector have led the EU to upgrade the first Payment Services Directive. The Second Payment Services Directive (PSD2) includes several articles and mandates, one of which focuses on Strong Customer Authentication (SCA). SCA stipulates that two-factor authentication will be required for all electronic payments, with exemptions possible for certain transactions.
SCA requires the use of at least two of the following three elements:

Up until now, additional security steps, aka two-factor authentication, have only been a requirement for transactions considered high risk. To accept transactions after SCA gets introduced in Europe in September 2019, merchants with sales to European consumers will need to upgrade their authentication capabilities to allow for two-factor authentication or face declines. In other words, two-factor authentication is going to become the default for all customer-initiated transactions within Europe, unless an exemption applies.

Moving from 3DS 1.0 to 3DS 2.0
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‍EMV Three Domain Secure also known by merchants as 3DS 2 is an authentication tool or protocol introduced by EMVCo and major card brands to help consumers authenticate their identity when making card-not-present transactions by providing an additional security layer.
You’ll already be familiar with 3D Secure 1.0 (3DS 1.0) which shared data among critical stakeholders in the payments ecosystem to authenticate transactions.
3D Secure 2 is the updated version of this authentication protocol, which provides improvements that take into consideration SCA regulatory requirements from the European Union, the need to support new payment channels like digital wallets, and declining conversion rates. With 3DS 2 merchants will be able to integrate an additional security layer into their checkout processes which will help them comply with new SCA regulations and fight fraud more effectively without sacrificing the customer experience.
Whereas the flow of 3DS 1.0 focused mainly on a simple challenge (insertion of a code on a static webpage, SMS authentication etc.), 3DS 2 facilitates rich data exchange between merchants, card-holders and issuers, more so than ever before to achieve more accurate authentication. Transactions can be verified by merchants using the customer’s issuing bank instead of a customer needing to remember a PIN or getting redirected to a new webpage. The result is a more frictionless payment experience, although in some cases a challenge may be required to verify user identity. Check out the two flows below to get a better understanding of the process:

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Rules have exemptions, and 3DS 2 is no different
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Some transactions will be exempted from the 3DS 2 protocol. These cases may include: 
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- Whitelisted Merchants (or trusted beneficiaries) - Customers will have the opportunity to whitelist any merchant that they deem trustworthy after an initial authentication has occurred. By doing so, most future authentication steps will no longer be required.
- Mail order and telephone orders - Card data that is collected from customers over the telephone.
- Low-value transactions - Transactions that total less than 30 Euros each, with no more than five transactions allowed in a row. If the total amount on a single card is higher than 100 EUR in 24 hours, SCA will be required.
- Low-risk transactions - A transaction is to be considered low risk if it passes an acquirer’s real-time risk assessment and is approved by an issuer on a case-by-case basis.
- Recurring transactions/ subscriptions - A subscription-based service that features recurring payments of the same/different value. However, a customer’s first payment will still require authentication.

6 benefits 3DS 2 brings to merchants
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Harnessing 3DS 2 delivers several benefits for merchants. These include:

1. 3DS 2 helps comply with new SCA mandates which stipulate two-factor authentication as a requirement for all electronic payments. If you have a large number of customers in Europe, employing 3DS 2.0 is a necessity to continue operating.
2. 3DS 2 protects operations with robust security, and has the potential to fight cases of fraud.
3. 3DS 2 provides a great customer experience. Frictionless customer identification has the potential to contribute to a shortened check-out process and to reduce cart abandonment.
4. 3DS 2 increases authorization rates as authentication is quick and can take place on the same page.
5. 3DS 2 allows to easily build authentication flows natively into Apps or websites.
6. 3DS 2 helps to shift liability away from the merchant (the issuing bank assumes the risk).  

3DS 2 will have a profound effect on the entire payment ecosystem. ZOOZ is working hard to enable its customers to comply with these regulations in the quickest and most streamlined-way possible. Further information on how ZOOZ is preparing itself for 3DS 2 can be found here.

We hope that the information provided above helps to shed some light and to demystify the fears revolving 3DS 2.0.
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What are Enterprise Payment Hubs?

Enterprise Payment hubs are becoming a popular solution for e-commerce merchants seeking to combat growing fragmentation and complexity in today’s payments ecosystem. A payment hub, also referred to as a payment orchestration layer or enterprise payments architecture, is a flexible and consolidated platform that manages and controls payment operations end-to-end. Under the hood, a payment hub features all the automation software systems and services that coordinate and manage the activities involved in authorizing, processing, and optimizing payments.

The great thing about a payments hub is that it consolidates lots of different payment-related activities into one place and enables integration with multiple systems and channels. With the right payments hub, merchants have the opportunity to build a smarter, customized and best-in-class payments architecture that can ease payment management, support global growth, and drive efficiencies with advanced optimization in today’s more global, complex, and fragmented payments ecosystem.

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Key Features of an Enterprise Payment Hub

A new way to manage your payments

Built for a time when e-commerce was far less complicated, today’s fragmented payment stacks, designed with a segmented siloed approach, are getting harder to manage and fast reaching a breaking point.

After years of getting loaded up with different functionalities, components, and elements, payment stacks have turned into a patchwork of tangled and interlinked software systems that are more of a liability than an asset.

Fragmented payment infrastructures are turning simple payment-related tasks like reconciling deposits into time-consuming and error-prone processes. Straight forward activities involved in a request for a refund are now becoming more difficult.

It can be a real struggle to establish where an original transaction was processed as there are several records to search. Maintenance has become complicated and grown into a continuous drain on resources as well, as has the integration of new providers and payment methods.

Enterprises and hypergrowth merchants need to keep up with a market which is becoming more segmented and diverse by the minute, thus the need for a centralized platform to manage it all becomes paramount. Thanks to their ability to consolidate everything into one system, today's payment hubs give merchant the ease of managing their payments more efficiently and easier than ever before.

Rapid integrations that support global growth

Continuously adding new providers and payment methods is a necessity for hyper-growth merchants branching into new markets, even though fragmented payment infrastructures make extending your payment network far more complicated than it needs to be. Payment hubs, with an emphasis on open payment platforms, enable connectivity to multiple payment providers by easy integration via a single API.

ZOOZ’s payment hub, for instance, provides an agnostic payment infrastructure that removes the cumbersome, inefficiencyand costly processes associated with provider integration. With ZOOZ, merchants are able to integrate and manage new providers quickly and easily via one API, with minimal effort on their side - something which is normally a real pain for merchants.

Advanced payment optimization tools to boost profits

With an ever-increasing number of providers and growing global transaction volumes, it’s essential to have a way to control your exposure to provider declined transactions, which leads to lost sales. It’s also critical to have the ability to optimize transaction flows to avoid expensive fees that take a chunk out of profits.

In contrast to fragmented legacy payment architectures, which provide static routing connections that are hard to change, ZOOZ’s payment hub allows for dynamic transaction routing to enable advanced payment optimization for efficiency and cost-effectiveness. With ZOOZ, you can choose from a large variety of different filters to set routing rules according to your business preference - e.g. transaction amount, location, type of transaction and more. The tools also enable you to easily route transactions to local payment providers to maximize acceptance rate and minimize fees. You’ll be able to save more on international transaction fees simply by prioritizing providers which cost less, and improve your overall approval rates by saving rejected transactions thanks to our instant retry tool.

Enhanced data analytics for more informed decision making

Fragmented payment infrastructures with siloed record-keeping systems that lack basic levels of interoperability make it extremely difficult to extract quality insights. With data siloed in isolation, you lack the actionable data to make critical business decisions. There’s no way for you to see the bigger picture or get a comprehensive cross-provider view of all your payments- activities, which makes it much harder to understand what areas require optimization. What’s more, fragmentation makes reporting far more cumbersome as payment teams are forced to jump between multiple platforms to collect data and generate reports.

ZOOZ gives you access to an easy to use, real-time, and consolidated analytics dashboard that delivers in-depth insights into your entire operations. More sophisticated analytics means you’ll be better able to optimize your payments and understand which areas need to be focused on to increase revenue. Reporting becomes far more powerful as well, with added capabilities to create cross provider reports based on business needs, compare payment service provider performance, segment transaction reporting by business unit, and use more detailed data sets to build custom reports!‍

Enterprise Payment Hub

When merchants experience hyper-growth, and need to deal with an expanding global operation, with dozens of payment providers, growing transaction volumes, and exploding transaction fees - the need for a solid foundation that enables pain-free management & administration of a payment operation becomes invaluable, therefore an enterprise payment hub becomes a necessity, not a luxury. ZOOZ’s enterprise payment hub eliminates the inefficiencies caused by fragmented software systems by offering a more intelligent and unified platform that simplifies the management and control of your global payment operations. Whether optimizing payments, testing your transaction flows, conducting in-depth analysis and reporting, or adding a new payment provider, ZOOZ’s enterprise payment hub is designed to equip merchants with a solution that'll make payments management efficient and pain-free, and allow merchants to focus on the most important thing - their growth.

Build your enterprise on a solid foundation with ZOOZ

A successful global e-commerce business requires a strong foundation. To build your enterprise on a fragmented and complex payment infrastructure is kind of like building a skyscraper on the sand. It may be possible to construct a few levels, but the higher the building reaches, the more unstable it will get, until one day it’s just going to topple over.

ZOOZ’s enterprise payment hub provides a solid ‘concrete’ foundation so that you can handle rising payment volumes, tougher customer demands, and cater to an ever-growing number of payment methods. To learn more about the benefits ZOOZ’s advanced payments hub provides make sure to contact us today.

The use of eWallets has grown significantly in recent years, in accordance with the expansion and growth of eCommerce, and both as a local and global payment method.  eCommerce is not showing any signs of slowing down, and its spread is projected to continue to grow and expand in years to come, with an estimated leap from 36% to 47% by 2020*

Being a relatively new payment method, the adoption of eWallets in different markets and industries varies greatly - due to regulations, infrastructure, and level of consumer readiness. Apple Pay and Android Pay are currently targeting markets like Europe, Asia Pacific, and the U.S., while other eWallets like Samsung Pay are turning their attention elsewhere. In China,  Alipay and WeChat have become so dominant in that merchants are currently facing a reality in which, if they wish to enter those markets, they are bound to offer these payment methods to their potential customers (according to China ranked at number one with 65% of online payments made using some form of an eWallet).

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What are eWallets?

eWallets, or digital wallets, are a type of pre-paid account that allows users to store money (e.g. cryptocurrency, credit cards, etc.) and easily access it for any future transaction.

In order to use an eWallet, a registration process is usually required of users, and they may also need to go through a verification process (what is referred to as a "Know Your Customer" procedure), which may vary between providers. Alternatively - in case users are not verified - they may still be allowed to preform transactions up to a certain amount of money.

An eWallet is based on encryption software, thus replacing the old physical wallet with a safer alternative. It is password protected and stores both the personal data with an added layer of safety.  Merchants and clients both benefit from that added layer of security and protection against fraud: Merchants are able to increase their sales and be rest assured with transactions staying protected while customers are more easily nd readily willing to complete transactions, on and off-line. eWallets have greatly evolved beyond just a payment method and nowadays include additional online benefits, such as allowing users to travel card-less in public transportation, send and receive money, accumulate rewards from their favorite merchants and store tickets and “soft copy” purchases.

Should merchants add eWallets to their payment methods?

As previously stated, the use of eWallets is currently growing and expanding, and the adoption rate of these methods varies greatly among different locations. Before merchants choose to make such integration with one or multiple eWallets, it is best for them to determine first who their target audience is, and understand their business goals and growth rate: Are they targeting the Asian market? The South American market? Are they currently experiencing hyper-growth and need to cater to more customers? And most importantly - will such integration allow them  to increase their bottom-line? If a merchant concludes that an addition of eWallets is necessary to their business growth, then yes, they should definitely consider to include them.

eWallets and their geographical spread 

Although eWallets may not necessarily be limited to specific locations (exclusions apply), they are very much “location-based” in the sense that their spread and frequency of use differ from one geographical location to another. What is prevalent in China might not be readily-available or popular in different locations, so a merchant’s decision of what method to add to their offering next needs to reflect the needs of their target market. Here are the most prominent eWallets in various regions around the worlds, as well as some regional highlights:

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APAC

• Australia: When it comes to eWallets, the usage in the Australian market was reported to be18% in 2017 - PayPal and Visa Checkout being the most prominent alternative payment methods.
• China: dominating 65% of the market in terms of payment, eWallets such as Ali Pay and WeChat pay are the most prevalent payment method for both online and point-of-sale purchases.
• India: the use of eWallets is rapidly growing in accordance with the expansion of smartphone use. Standing currently at 26% for online purchases, merchants should consider adding alternative payment methods such as the Paytm if the Indian market is a target audience. *

Europe

• The European market uses eWallets for ~20% of online purchases. The use of these methods for points-of-sale purchases is still minimal (2%). Preference and usage vary among different parts of Europe - While in the UK you can see the dominance of methods such as Paypal and VISAcheckout, in Northern European countries like Sweden, Norway and Denmark, the usage of payment alternatives like Klarna and Vipps take a larger share of the market. Klarna is also gaining in popularity in Germany. The French use PayPal and Masterpass as their preferred alternative payment method while Italians use Paypal and Postepay.
• As a rule of thumb, PayPal is still the safest bet to target the majority of the European market. *

North America

• In Canada, credit card usage is still dominating in the market (64% percent), while the usage of eWallets stands at 16%.
• In the US, eWallets account to 20% of online payments, following the footsteps of the more established credit cards (32%).
•  Paypal is popular both in the US and Canada. VISAcheckout is another popular method in the US while Canadians favor Interac Online alongside Paypal. *

Latin America

• Credit card usage currently dominates in the Latin American market, standing at a whopping 45%, while eWallets are at the 15% mark. This trend is projected to shift though, and by 2020 eWallet usage is estimates to get to 18% while credit card usage will drop to 36%.
• Paypal and Mercado Pago are the most popular alternative payment methods in the Latin American markets. *

Africa

• The African continent shows different usage of eWallets in different parts of the continent. Whereas the numbers in South Africa are similar to their European counterparts (25% credit card usage and 17% eWallet usage, Paypal and Masterpass being the most popular); Other countries e.g. Nigeria, are still dominated by cash usage (24%) while eWallet usage stands at 10%. *
  
  

* All information is based on the Worldpay’s 2018 Global Payments Report

What’s your next step?

eWallets are growing in popularity and have become an important way to offer global customers the best payment experience for their local needs. According to the Paypers Method Report 2017, the adoption of e-wallets varies greatly among locations  - while in the US and Europe the adoption is slower than expected (but is expected to rise in popularity within the next 3 years), in India, eWallet-use is growing rapidly in popularity in accordance with the growth of smartphone use, while in China, Alipay and WeChat Pay already based their status as the most popular forms of payment both for online and offline purchases.

For merchants taking the leap into hypergrowth, an integration with a variety of payment methods becomes a crucial catalyst for success, and integration often times becomes a prerequisite for successful growth and increased income. That fact becomes even more crucial when trying to break into foreign markets which use different payment methods, as it affects the customer experience you offer as a merchant, and inevitably - your potential revenue.

At ZOOZ, we allow merchants to connect to as many payment providers as they desire (via a single API). In order to provide the easiest and most versatile connectivity for our customers, we are constantly working to add more payment methods (eWallets included) to give merchants the flexibility and freedom to cater to customers located in different locations around the world.

When it comes to your company’s payments, provider outage is your bottomline's worst enemy.‍

Imagine the following scenario. Your company’s in hypergrowth. Your marketing team’s taken the time to design an effective, well-oiled purchase funnel. Your ad people have placed an expensive, catchy banner to attract customers to your website, or sent out a killer newsletter. They’ve done a good job, and customers are flooding in. They’re browsing your retail page, carefully selecting a number of items and placing them in their shopping cart. They go to the checkout page, go to the trouble of entering their shipping address, billing address, and credit card details. You’ve worked a month, a quarter, a year for the moment of purchase, only to have your customers receive the following error message :

Payment provider unavailable

The Lowdown on Downtime

According to a study conducted by Uptime Institute, outages are increasing in frequency, with a third of the study participants reporting outages in 2017. The average outage duration was about 96 minutes. In the US alone, 3,526 outages were recorded, impacting 36.7 million people that year. The cost per minute of outages was evaluated at $8,851 per minute.

Payment providers have been significantly affected by outages. A study commissioned in March 2017 by SafeCharge found that 76% of the European merchants surveyed experienced at least one payment outage in the year preceding the study. These outages can be caused by data center downtime, or various technical errors experienced by the payment providers, such as internal software or communications malfunctions. 42% of merchants experienced six or more partial outages during that year. The merchants cited financial losses ranging between €10,000 and €100,000 per outage, with 11% of merchants reporting losses of €1 million or more. In July 2016, for instance, vintage and craft seller giant Etsy’s suffered a massive outage due to a payments failure, rendering Etsy customers unable to make credit card purchases for six days. In less than a week, Etsy’s customer forums amassed over 7,000 messages from frustrated customers. TechCrunch estimated nearly a million lost transactions, which would have amounted to tens of millions of dollars in losses for Etsy.

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Combat Downtime with ZOOZ Routing Rules

Some modern payment platforms come armed with a set of tools that help fight the prospect of downtime, and bring it to a minimum.  ZOOZ allows you to fight downtime in multiple ways- first, it gives you an overview of all of your providers and their current performance so you can spot if one of them is down or not. ZOOZ also allows you to set up rules to re-direct payment to alternate provider automatically in case one of them is down. After you’ve set up connections to multiple providers, you can start guarding your payments against outages.

Customize Your Own Downtime Defense

Once you’ve configured Dynamic Routing rules, you can rest easy knowing your transactions are safe and let ZOOZ do the dirty work. But sometimes, you might want to have access to provider uptime data. For instance, you’d want to know if your main provider was down for two days, because transactions routed to a backup provider might have a significant impact on your business. It could mean a considerable decrease in acceptance rates, a significant increase in provider fees, or longer provider server response times. ‍

Many providers offer their own status reports (Stripe is one example), but as an international, hyper-growing merchant, you are connected to two or more providers. Bookmarking each individual status checker, and checking up on them periodically, needs to be a thing of the past. And with ZOOZ’s Retrieve Health Status API request, it is!

Rather than running around collecting uptime data from your various providers, your developers can invoke the Retrieve Health Status API request. They can embed the data retrieved from this API request in your company’s internal dashboards, for instance, that your company’s managers use to make sure the operation’s running smoothly.

This API request is also super useful if you’d like to create custom tools or procedures for your support, ops or monitoring teams. You could create alerts based on status data, for instance, and receive alerts in case of provider downtime. You could then use these alerts to take action: generate a custom report to check up on your affected payments, reroute the traffic, or call your provider contacts to get more information on the outage. And of course, feel free to check out our own Status Checker.

No More Downtime: A Hypothetical Case Study

Let’s use a hypothetical case study to prove this point:

Travelex, an imaginary international flight merchant, sells tickets to customers from the United States and to customers from Europe. They are in hyper-growth, with more and more sales coming in every day.

With the help of ZOOZ, Travelex sends all of their American payments to RedWhiteBlue Payments, a US-based acquirer, and they send all of their European payments to Europa Payments, a European acquirer. Cindy, the Head of Payments at Travelex, has tested several acquirers and found that these acquirers achieve the best performance in their respective markets. With these providers, Cindy achieved a 90% acceptance rate in the American market, and a 91% acceptance rate in the European market.

At Cindy’s request, Travelex’s developers created a custom alerting tool for Travelex’s internal insights app. Using the Retrieve Health Status API request, they created a tool that sends Cindy a text message in case RedWhiteBlue or Europa experience an outage. This will allow Cindy to call her provider contacts in case of any technical failure, and stay informed about the status of her payments.
However, with Travelex’s customer base growing every day, Cindy is concerned about the number of customers who will potentially be affected by a RedWhiteBlue or Europa outage, and that customers will be unable to buy tickets during the downtime. Cindy wants to put an automated mechanism in place that will protect Travelex from a payment outage.

To activate the Health Checker option in Dynamic Routing, all Cindy has to do is log onto ZOOZ and create her own customized routing rules. Cindy sets RedWhiteBlue as the backup provider for Travelex’s European transactions, and Europa as the backup provider for Travelex’s United States transactions. She makes sure to toggle the switch that reads “Skip to next rule if target provider is down”.‍

ZOOZ’s Best Practices for Payments Downtime Prevention

Downtime is a terrifying event that can happen to every hypergrowth company. As sales' volume increases and a company's reputation is at stake, customers demand top performance and couldn't care less whose fault it is if their payments cannot be processed. They will abandon their carts - and chances are that they won't be coming back. So what can you do as a merchant? Always have several providers configured. Have at least one robust alternative provider in your dynamic routing scheme. Providers usually declare their downtime percentages on their websites - do your research.Try to automate the process as much as possible. Make sure your payment solution allows you to configure rules to make sure your payments are re-directed to alternative providers in cases of emergency - even if you are not there in the exact moment it happens. Downtimes can be prevented, or at least decreased to a minimum. Make sure you take the necessary preventive measures in advanced - contact ZOOZ today to make sure you are armed against downtimes.

The financial ecosystem was hit with a tsunami-like announcement last week, shaking the roots of the fortress-like German economy and creating a global turmoil in its footsteps.

As merchants, as well as consumers —finances and financial institutions are always treated with a certain duality; On the one hand, we cannot exist without them, but on the other hand, there is always a portion of risk involved. How much risk— that is the hard-to-quantify part of the question.

Can you fill me in on the details? 

Last week, the German payment firm Wirecard disclosed a €1.9bn hole in its accounts. The controversy erupted last week when auditors EY refused to sign off on Wirecard’s accounts, having been unable to locate the missing €1.9bn. Events quickly cascaded and last week Wirecard became the first member of Germany’s prestigious Dax index to file for insolvency.

The somewhat cliche of “don’t put all your eggs in one basket” screams out loud and clear from recent events. Wirecard can be viewed as a case study, and as an example to why you shouldn’t - if given the opportunity - rely completely on one payment service provider.

Curve, whose business relied heavily on Wirecard, managed - with great resourcefulness - to transfer their entire e-money and credit card operation internally and shift their acquiring services to Checkout.com. This chain of events happened in a mere 60 hours time. Recent updates from the Curve website promise customers that Curve is now “100% Wirecard-free”.

While Curve managed to salvage their payments with lightning-fast response, this was feasible very much due to their scope and prominence. A different company might have been less successful in moving things around so quickly - resulting in weeks of forced-downtime, and profound financial losses. ‍

Overcoming the ecosystem’s instability

There’s a lesson to be learned here. In this case, the cliche turned out to be true - in finance, don’t put all your eggs in one basket.  This applies to the occasional downtime (which does happen, there’s no way around it), as well as to larger financial catastrophes.

At ZOOZ, our merchants were very minimally affected by what happened. Why is that? Well, our solution is designed to overcome unexpected events such as this. Our routing mechanism can be changed instantaneously to route transactions to different providers, without the need for extra development effort. Merchants are also encouraged to a/b test their providers and send their payments to multiple target providers.

Our failover-rules are another tool to fight downtime by automatically re-route transactions to an alternative provider (on which the merchant decides), so the stream of transactions remain unaffected.

Being prepared is key

The main takeaway from the Wirecard case study is that mishaps can —and will —happen. That is just the nature of the financial ecosystem. When a system is linked and impacted by multiple players, some domino effect can’t always be avoided. But, this doesn’t mean that there are no measures that merchants can take in advance. A backup provider is a good (and some would even say mandatory) start. A payment orchestration platform is a great way to stay on top of your payments and adjust them accordingly if needed. Always be ready for the unexpected, and build your infrastructure to serve that mindset as well.

It’s no secret that cross-border payments and eCommerce have grown immensely in the past decade. What has been unexpected is the surprising boost they were given by COVID-19, as increasingly more businesses are now forced to take their commerce, and payments, online.
As online operations grow, the need for a payment solution also surfaces, and many businesses  ⁠— who may not have considered getting an online payment solution in the past ⁠—  now deem it necessary.

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What is Payment-as-a-Service (PaaS)? 

Payment-as-a-Service is a term that describes a cloud-based solution where a third-party service provides software and hardware tools, covers servers, storage, and networking ⁠—  i.e., the infrastructure ⁠— and developers can then develop their own customized applications on top of it.

PaaS, when initially introduced, was a breath of fresh air in an industry once dominated by banks and large financial institutions. PaaS now enables businesses to incorporate an online payment solution easily, with minimal integration efforts on their side. With an estimated growth of $47.8 Billion in revenue by 2026, PaaS is definitely a force to be reckoned with. PaaS’s colossal growth is by no means accidental. It reflects the real need businesses have to cater to their growing payment operation and to adjust their payment stack to the evolving needs of the market.

Today, cloud-based solutions for payments, which are derived from ⁠— and also share the same acronym as ⁠— Platform-as-a-Service, use the SaaS model to simplify payments and businesses’ ability to scale up their stack when they need to.

Core Features of PaaS 

A quick search online will return multiple definitions and types of PaaS. Similar to many new concepts, it’s hard to give PaaS a clear-cut definition of what it offers or lacks in terms of features — which makes it all the more difficult for businesses to decide which will be the right solution for them. Still, the following core features are necessary to have in a PaaS solution, in order to get the most out of such a solution:‍

Cloud-Based

This feature may sound obvious, but payments didn’t use to be cloud-based. This key feature of a PaaS allows businesses to easily access their payment solution from anywhere, without being confined to  a single, specific location. For global businesses, this becomes a major necessity.

Open Source Code

One of the main advantages of PaaS is its open-source code and the ease of building upon  its infrastructure. With PaaS, developers have the freedom to customize the solution according to their company’s requirements, without needing  to build a solution from scratch. Onboarding additional providers, adding third-party integrations, and tweaking business preferences becomes as easy as pie with a PaaS. While APIs may vary between solutions, here is an example of the APIs we have at ZOOZ (where all solution aspects are API-based):

Payments API Reference

Management API Reference

Reporting API Reference

Analytics API Reference

Audit API Reference

Scaleable and flexible 

When companies decide to build solutions in-house, they are required to make a strategic decision to decide on the size of the platform they’ll need. This is always a ballpark estimation, as it is very hard to accurately predict the size of a solution that a business may or may not need in the future. By using a PaaS, businesses no longer need to be troubled with this dilemma, as these solutions are completely scalable and can be adjusted to support periods of high volume as well as lower volume periods.

PCI Compliant

A big challenge for companies is the necessity to become PCI-compliant ⁠— a prerequisite to handling payments. Generally, when businesses decide to handle payment all on their own and build their payment solution in-house, they need to become PCI level 1-certified, which is the highest level of PCI certification. The big advantage of a PaaS is that it should already be PCI compliant, and thus liberate you from procuring such a certification.

Analytics & Optimization

An added benefit of most PaaS solutions is their added analytics abilities, which become very important for payment optimization purposes. By collecting all of your business’s payment performance data, a PaaS can help pinpoint where the strengths and weaknesses of your business lie and what needs to be changed to increase your approval rates and improve your bottom line.

Some advanced PaaS solutions also function as an optimization layer, with added tools to allow you to smartly route your payments, A/B test providers, and set failover rules to eliminate failure in case of downtime. These components becomes extremely important as businesses grow, and it becomes necessary to grow the scale of their operation (and payments) as well.

What Type of businesses should opt for PaaS?

A PaaS can be beneficial for various types of businesses. The initial standpoint should be whether you wish to build a solution in-house and do everything from scratch or whether you wish to have an initial infrastructure. If you prefer to build an in-house solution, a PaaS is not needed. However, to build your payments on top of existing infrastructure, opt for a PaaS.

If you go for the PaaS option, its flexibility can appeal to both large and small businesses, as each can find their needs met. Larger companies are more likely to have the time and resources to build their own payments infrastructure, but they often prefer to focus on their core business, rather than get involved in the technical aspects of integrating payment servers, databases and networks. Small companies often do not have these resources, and so they think ahead and opt for the safety, reliability and convenience of a ready-made, PCI-compliant solution. Regardless of company size, going with a PaaS can be the right move.

Should You Opt for a PaaS?

Now facing the million-dollar question ⁠— should you opt for a PaaS? Or can you get away without one and still build a prospering business?

As long as your business operation is small and limited to only a handful of regions, without the desire or need for expansion, then you might be able to get away without a payment solution to help you streamline and optimize your payment stack.

The complexities really arise once you decide to branch out your business, expand it, or cater to a larger, global customer base. Cross-border purchases tend to complicate the payment scheme. All too often,  after the move to global payments, low approval rates occur,  and it’s hard to understand the reasons for failure and what can be done to combat it. To battle these difficulties you may need to add more providers to serve local audiences in different locations, and then to find a way to route certain payments to a specific provider and according to a specific set of rules. Eventually, this collection of factors will drive most businesses to find a way to organize and streamline their payments, and a PaaS is often the all-around favorable solution to get the control, customizability, and analytics tools to help your business overcome its payment growing pains.

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The best inventions are the simplest. That is why we at ZOOZ created a set of simple tools that harness your company’s transactions to grow your revenue.

ZOOZ’ helps you get to know your payments with clear, KPI-driven analytics. Once you know your payments, analyzing them and deciding on the next steps to optimization is easy. PaymentsOS empowers you to manage and optimize your multi-currency, cross-provider payments from a single platform.

One of PaymentsOS’s strengths is allowing merchants to work with multiple providers in order to increase payment acceptance rates and optimize fees. With PaymentsOS, you have visibility into each of your payment providers' performance, and you are able to easily compare them and identify the one with the better approval rates. Drill down into your data to spot exactly which parameters affect your approval rates, and optimize accordingly. Higher approval rates and better fees, of course, mean an increase in your company revenue.

How can you optimize? Simply switch over transactions from a poorly performing provider to the provider that performs best in a certain payment category. PaymentsOS allows you to route your transactions dynamically based on currency, amount, card country, card level, BIN, card issuer, card brand, and transaction type. PaymentsOS also allows you to block transactions that are performing poorly and costing you too much.

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Simply switch over transactions from a poorly performing provider to a provider with better performance

You set the rules -- and we take care of the rest. In the Control Center, you can set rules that direct your traffic exactly where you want it to go, and we make sure it gets there. As soon as you set up the rules, you can start tracking your traffic to see impact of transaction routing rules on your payment performance. Still not satisfied? Tweak the rules, apply, and track again until your company reaches its payment potential.

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We know that every failed payment hurts, and so we developed another simple tool to rescue your lost transactions: Instant Retry.

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Are declined payments burning a million dollar hole in your pocket? Here’s another way PaymentsOS helps optimize your payments. We know that every failed payment hurts, and so we developed another simple tool to rescue your lost transactions: Instant Retry. If a payment is declined or rejected by the payment provider, you do not have to give up. Instead, PaymentsOS helps you rescue lost transactions by sending them again to the same provider or to a backup provider.

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How ZOOZ merchants optimize their payments

Merchant A: Multinational transportation service provider

One of ZOOZ’s biggest merchants who provides transportation services has a very unique and unusual payment model. While most merchants charge their customers before providing the product or service (first you pay for your new shirt, and then you receive it in the mail), this merchant charges the customer after they have provided the transportation service. This happens because the payment amount varies from customer to customer, and is uniquely calculated at the end according to the exact service provided. Because of this, the payment amount is not known until the end of the service, and the customer can only be charged after the service has been provided.Because the payment is processed after the service is given to the customer, declines are especially problematic for this merchant, and the resulting low approval rates are especially painful.In order to increase the merchant’s approval rate, we started tracking the reasons for decline. We did this by drilling down in the PaymentsOS Control Center to pinpoint the specific parameters that influenced the declines. The Control Center showed us a large number of failed transactions coming from one of the merchant’s most important payment providers. The error messages did not contain an error code nor an error message, so it was impossible to understand the reason for the failures.

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The Control Center showed us a large number of failed transactions coming from one of the merchant’s most important payment providers.

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To understand the reason behind these failures, we contacted the payment provider. After investigating, the payment provider explained that the failures occurred due to a technical error in their systems.
The provider advised that these payments should be sent again for approval.

Cue in Instant Retry! Thanks to PaymentsOS’s new Instant Retry tool, the merchant was able to easily retry all of these failed transactions. The merchant simply set a rule in the Control Center to send all unknown failures to another processing attempt via the same provider. Once the rule was activated, the payments were sent to be re-processed. ‍

Thanks to PaymentsOS’s new Instant Retry tool, the merchant was able to easily retry all of these failed transactions.

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Some of the payments were successfully charged during the second attempt, and we were able to recover 4.57% of the merchant’s failed transactions during one month. A single Instant Retry rule translated into over 1,700 saved transactions and more than $9800 dollars in recovered revenue.

Merchant B: An international flight ticket seller

Like many multi-million dollar companies, this international flight ticket seller and ZOOZ merchant ran into problems when trying to expand their payments globally. When this merchant’s business was small, they only had one local acquirer. However, sales kept coming in, and the merchant started accepting payments from international customers and routing them to their local acquirer. This is when the merchant encountered cross-border crossing conditions for the first time.The merchant discovered that, compared to local payments, their international, cross-border payments were far less successful. The merchant’s approval rates for their cross-border payments were performing much worse than their local payments, and they were losing many sales due to declines and rejections!‍

The problem, the merchant found, was that issuing banks are more likely to approve payments that come from a local acquirer and in a local currency. In contrast, issuing banks are more likely to decline transactions that come from foreign acquirers and that are in a foreign currency. In addition, some acquirers have lower approval rates for certain card brands or card types. For example, if an acquiring bank is located in the US, and the shopper’s credit card issuer is in Spain, the transaction has a much higher probability of being declined by the issuer than if the acquiring bank were located in Spain. In another example, a Diners transaction may be declined by one acquirer and accepted by another simply because of that acquirer’s particular approval algorithm.Because this merchant sells flights all over the globe, and accepts payments from customers located everywhere -- in the US, Europe, Asia, the Middle East and Africa -- it was critical for the merchant to get their international payments in order.

First, the merchant took advantage of PaymentsOS’s simple processor tool to add acquirers all over the world. Then, the merchant used PaymentsOS’s dynamic routing feature to create rules that sent local payments to the best-performing local acquirers.The next step in the merchant’s optimization process was tackling declined payments. The merchant found that a major percentage of their payment declines came from credit card issuers. When it comes to online payments, card issuers are quick to decline transactions for a wide variety of reasons. The issuer is the entity that is in charge of credit card validation, verifying the line of credit and combating fraud attempts to make sure the transaction is legitimate and that the cardholder can afford the payment. Therefore, there are many parameters that the issuer checks during a request to approve a transaction. The majority of issuer errors are related to insufficient funds in the cardholder’s bank account or exceeding the line of credit in a given credit period. The merchant used the PaymentsOS dashboard to view their rejected payments. They saw many of their payments failed due to issuer declines, returning errors such as “The (issuing) bank refused the transaction”, and “Do not honour (the credit card)”.

Using PaymentsOS’s simple Instant Retry tool, the merchant configured rules to resend all issuer-declined transactions to a different, second provider, in hopes that the second provider would be able to approve some of the payments rejected by the first provider.

Cue in Instant Retry. Using PaymentsOS’s simple Instant Retry tool, the merchant configured rules to resend all issuer-declined transactions to a different, second provider, in hopes that the second provider would be able to approve some of the payments rejected by the first provider.

Way to go, Instant Retry! With the click of a button, Instant Retry recovered thousands of transactions for the merchant. For example, a 961.12 USD transaction was initially processed via Wirecard and received the following error: “The issuer returned Declined. Please check with Issuer, or use different card.” Thanks to Instant Retry, the same transaction was immediately sent to a different processor, dalenYs, with the exact same card, and this attempt was processed successfully. A thousand $$$ recovered in a heartbeat.

Thanks to the Instant Retry tool, the merchant was able to save 1.1M$ in 30 days.

The merchant used PaymentsOS’s A/B Testing feature to check which acquirers were best for which payments, and which providers had the best Instant Retry results. After multiple A/B tests such as the one in the example, the merchant was able to analyze which of their acquirers had the best approval rates in each region and configured the Instant Retry rules accordingly.

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Written by: Daniel Krishek

Business Analyst @ ZOOZ

With COVID-19 affecting every area of life and the financial world, in particular, Visa has recently announced that it is delaying its BER (Business Enhancements Release) from April to July, which is a protocol that usually requires additional actions on the merchants’ side, to comply with evolving regulations and requirements. This delay also affects the Refund Authorization Mandate, among others.

At this time though, Visa is trying to relieve merchants from added complexities. Among other things, they are currently implementing a Dispute Monitoring Program (beginning April 1) to help maintain the integrity of the dispute process by reducing the occurrence of invalid disputes initiated in the system. The program will monitor daily dispute volumes, with a focus on consumer-related disputes, and will flag any practices that may be inconsistent with current Visa dispute rules, and if necessary, require issuers to reverse invalid disputes. Mastercard has also indicated that they are putting the time and effort to support small businesses through this crisis, with a commitment of $250 million over five years to support businesses in the US and in other markets in which they operate.

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What about 3DS 2.1? 

With all the mayhem we’ve been facing in the past couple of months, you might have missed the fact that 14 March 2020 marked the date which Visa set for European issuers to have 3D Secure 2.1 in place. The current situation has put such immense pressure on merchants and banks, that regulators are working closely with the industry to agree on which changes, if any, need to be taken and implemented regarding milestones and timeline. It is important that even considering the current situation, to still have in mind the future deadlines and needed actions

Why it's important

While e-commerce has shown great growth even prior to COVID-19, recent events have boosted it even further.  Consumers are flocking online stores and basically shifted their buying habits online. This fact makes 3DS even more important as it is designed to increase the fortification of CNP (Card Not Present) transactions, and make the environment safer as well as to increase approval rates as more transactions will be flagged as safe in advance.

A quick reminder: what is 3DS 2.1 all about?

3DS 2, launched 14 April 2019, is an authentication protocol introduced by EMV Co., and major card brands, to help consumers authenticate their identity while making card-not-present transactions. 3DS 2 - the improved version of its predecessor 3DS -  is designed to support new payment channels (e.g. digital wallets), as well as reverse the trend of low conversion rates, false card declines, customer cart abandonment, and fraud. It’s also a key component for complying with PSD2-SCA requirements -  With more context around each payment, issuing banks should be able to make more accurate authorization decisions in a way that provides a frictionless experience for the consumer. Further reading on the subject can be found here.

Upcoming Deadlines 

Until published differently, the following are the official deadlines for the implementation of 3DS 2.1

• 1 July 2020: 3DS 2.1+ is Mastercard’s mandate for issuers and is an interim version of 3DS between versions 2.1 and 2.2. It adds some of the functionalities of 2.2 (especially exemptions)

• 14 September 2020: 3DS 2.2 Visa mandate for issuers

• October 2020: American Express (Issuers & acquirers) must implement 3DS 2.2

• 16 October 2020: Visa (Acquirers) must be ready for 3DS 2.2

• 31 December 2020: Visa to end support for 3DS1

• 1 January 2021: SCA will be implemented on all payments (14 March 2021 in the UK)

• September 2021: Merchants should be prepared to support 3DS 2.2

ZOOZ 3DS solution

We are working hard on a 3D Secure Authentication service for the use of both existing customers and external ones. The solution will help merchants reduce the needed PCI scope for external 3DS authentication. It will also route transactions via the appropriate 3DS flow. Our online exemption engine will take decisions in real-time and help merchants to manage regulatory requirements and the growing prevalence of 3DS support throughout the market.

To find out more about this service make sure to contact our customer success team at Support@zooz.com  today.

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It wouldn’t be an understatement to say that COVID-19 is shaking-up all aspects of life.
Changes have spared no one: individuals, small companies, enterprises, and states - everyone is having their fair share. Some fundamental aspects of our daily lives (e.g. going to the office, flying to a different country or simply getting groceries instore) have become a rarity or a distant memory, while others have become almost second nature. Big changes are also happening by the dint of demand.  A huge spike in online searches is recorded for items one would not normally think of as that desirable - Bidet (as a replacement for a dwindling supply of toilet paper) is one that’s taking the forefront (with a rise of more than three hundred percent of interest from the previous month), pulse oximeter and dumbbells are also prominent contenders. These examples just show how fluid demand can get, and how flexible the market needs to be. That’s where the phenomenon of repurposing comes into play.‍

What is Repurposing?

Repurposing is a general term describing the process by which an original use of an item is altered to serve a new goal/purpose. In the COVID-19 era, companies are changing their business model and/or repurpose their offering - whether to stay afloat during this financial crisis or to answer the growing need for certain commodities.

COVID-19 : Who’s Repurposing Now? 

From airlines and medical companies to perfumeries and 3D printers - it seems that repurposing is now happening across multiple industries and verticals, causing changes to companies’ production lines and R&D capabilities to fit in with this new-found reality.

Airlines Switch to Cargo

With a ninety percent decrease in passenger traffic and traveling, it was only a matter of time until airlines - which rely heavily on fluid cashflow - adjust their offering to survive this crisis. Companies such as American Airlines Group, Cathay Pacific Airways Ltd., and others, are repurposing their airplanes to ship cargo. And while sending cargo on an airplane costs considerably more than sending it via the sea, it has some advantages at this time as it serves the need to send sensitive, perishable items in the most efficient way. This advantage came into play recently, when American Airlines flew COVID-19 tests on a regular, non-cargo, airplane.

Medical discoveries change paths

COVID-19 also drives repurposing in other industries, where companies use accumulated knowledge or expertise and shift it towards the common goal of fighting the pandemic  - a Spanish team has recently put 3D technology into use by quickly manufacturing an emergency-use ventilator out of 3D-printed parts. Discoveries made by biotech companies and pharmaceuticals are also put into use, even if the discoveries were made with the initial goal to remedy something else.

‍From iPhones to face masks‍

Another company joining the effort and repurposing its current offering is Foxconn, the manufacturer of iPhones. The company has allocated part of its production line to make surgical masks, to answer the growing need worldwide.

Beer & perfume into hand sanitizers 

Alcohol-based sanitizers have become a highly required commodity. To provide adequate supply, the giant LVMH is converting its French cosmetics factories into production facilities for hand sanitizer with the objective to distribute them to local hospitals; U.S. distilleries also join the effort by creating their own alcohol-based solutions.

Financial Benefits of Repurposing

Repurposing at this stage does not only help companies to protect their own workforce and serve a greater good, but also helps companies to keep production lines up and running in times of low demand, generate moderate revenues, and positively impact their reputation.

Can Your Business Repurpose at This Time? 

A lot can be said about the current economic situation, but whether you are a manufacturer or a startup owner, every vertical has the potential to adjust and repurpose some of its structure or offering to come out triumphant of this current situation: working from home, changing offering or repurposing office space are all valid options, and are all a form of repurposing. In Germany, McDonald’s employees are supporting retailer Aldi to overcome the customer rush. That way McDonald’s employees are not left without employment while at the same time they are able to aid with the growing demand in other sectors. The potential for repurposing goes far beyond manufacturing and the silver lining is that with some creativity, many businesses can come up with adequate solutions to see the light at the end of this dark tunnel.

A not-so-quiet transformation in all aspects of life

COVID-19, or more so its impact on a new and developing social isolation, is shaking-up consumer and business behavior worldwide. While the scope of the revolution is yet to be decided, changes are happening at a fast pace and many businesses are changing their models to normalize the current situation and allow consumers to continue with their business uninterrupted, while minimizing human (physical) interaction dramatically.

Even prior to COVID-19, the world has been amidst a process of moving towards a cashless economy, and the use of eWallets and alternative payment methods was already on the rise. While the original estimation for APM spread was forecasted to  increase exponentially by 2024, recent events have made it clear that the new reality will push this estimation much higher.

Online banking & payments take the forefront

A recent recommendation from the World Health Organization (WHO) asks consumers to use contactless payment methods and avoid cash payments (as, in addition to involving human interaction, cash has the potential to transfer the virus via the organisms on it). That statement has sparked new initiatives taken by banks/payment companies to cope with the new reality.

Banks and financial institutions have announced various contingency plans and initiatives to streamline operations in spite of lockdown. Such an example can be found in South Korea, where the main bank instructed that all cash received will be held unused for two weeks before disinfecting it and returning it back into circulation.

Many countries around the world are also encouraging the adoption of alternative and contact-free payment methods. The initiatives are often backed by the governments and fees are waived to encourage use. In Africa, for instance, Governments and startups are implementing measures to shift a greater volume of payment transactions toward mobile money and away from cash - when COVID-19 cases began to spread across the continent’s major economies, Africa’s leader in digital payment adoption — Kenya — turned to mobile-money as a solution to stem the virus’s spread in the bud. The country’s largest telecommunication company, Safaricom, implemented a fee-waiver on East Africa’s leading mobile-money product, M-Pesa, to reduce the physical exchange of currency.

The increased concern regarding the use of cash could help speed up the adoption of alternative payment methods in markets that it hasn’t been very popular in (e.g. South America), and kickstart a unifying effect of payment methods around the world - or at the very least increase the usage of apps and remote payment and banking options more than ever before.

What challenges are we facing? ‍

Fraud

COVID-19, by driving people indoors and inadvertently creating an increase of online-based economy, has also created a breach in potential fraud risks.

Reports of email phishing campaigns using COVID-19-related topics surfaced almost immediately after confirmed infections began increasing in January 2020. COVID-19 has also been a popular topic of discussion on cybercriminal forums, posting methods to deliver malware via an email attachment disguised as a distribution map of the virus’s outbreak, containing real-time data from the World Health Organization.

As COVID-19 also pushes a growing number of users online for work, commerce and banking, it's also expected that as banking and payments increase their online presence, that fraudsters will also find new ways to lure innocent users into their traps - whether via email communication, apps or phishing.  Because these sectors are therefore becoming more vulnerable, it becomes even more paramount for them to fortify their services from unwanted scams and to reassure customers that they are in good hands.

Providing adequate customer service and handling volumes

A potential drop in-branch visits will challenge banks' digital capabilities and customer experiences. Many banks had to close down branches or minimize frontal service to a minimum. Since customers will still need to access their money, banks will need to cater to more digital channels and call centers, making digital the primary channel for a greater portion of customers across the world. This migration to non-branch channels will benefit banks that enable customers to handle a wide range of banking functions through online or phone channels while hurting those with more limited offerings, and it will test their ability to handle the increased strain of higher volume.

Accommodating challenges of first-time-users

Beyond whether or not customers can carry out banking functions through alternative channels, greater usage will test how easy to use those channels are, especially for first-time users whose usage is a direct result of coronavirus concerns. For that reason, banks should strive to simplify their online and call center interfaces or roll out information and educational materials that instruct customers on how to make the most of non branch channels to manage their funds. 

Does the future lie in remote solutions?

The short answer is that there may not be any other choice. The current situation has put survival and health first, and forced financial institutions to adapt accordingly.

The good news is, that there are several countries that have already started adopting cashless/remote methods where a lot of things -banking and payments included -  are done remotely or on-the-spot, but without contact (e.g. payment apps). In fact, in Sweden, the use of cash is so scarce that businesses now need to have a certain amount of cash aggregated before they can even deposit it in the bank. The majority of retailers prefer handling less cash. Swish and leading mobile payment methods such as iZettle make it easier for small business owners in Sweden to operate cash-free. Both have been a driving force in the reduction of cash circulation in Sweden, according to KTH Royal Institute of Technology.

China is another leading example of a cashless economy where, according to a survey conducted by Rakuten Insights (March 2020), 97% of respondents stated that they make transactions via e-payment methods, while only 1.6% are not.

It’s slowly revealing that the move to online solutions may be inevitable, and what businesses and institutions now need to figure out is how to minimize the challenges associated with such a move (e.g. customer experience, increased fraud etc.). Eventually, even when this pandemic is over, online solutions are the future, mainly for convenience and efficiency reasons, and now as it turns out - also for health reasons.

As Covid-19 continues to spread globally, people are retreating into their houses and are forced to reduce human interaction to a minimum. The ban to leave the country, let alone the house, has had a big effect on consumer behavior and preferences: The thriving travel industry was forced to halt its operation almost entirely, while the food, home deliveries, and health-related verticals were hit by a huge surge in demand, one that created a new reality where they are forced to adjust their offerings and increase their delivery-scope profoundly.  As life moves indoors, shopping does too, and eCommerce is also experiencing an overwhelming boost: from food to home furniture and sex toys - consumers are switching their mall shopping for online alternatives. ‍

Consumers behavior changes as Covid-19 spreads

New information is published as researchers try to better understand the extent to which eCommerce is currently spreading and its effect on different countries, as governments limit the movement of their population to halt the pandemic-spread. According to a March 2020 YouGov survey, 85% of internet users in China and 83% of users in Hong Kong choose to avoid crowded public places. At the time the survey was taken, only 27% of Americans and 14% of the UK participants replied similarly. These results were relevant at the time they were taken but we can presume that the numbers are probably much higher now for the UK and US segments, as new restrictions are published daily.

The main takeaway from this is that as the population in many countries turns indoors, so does their consumer-behavior.  A good example for this might be Italy, which has been suffering from one of the worst outbreaks of the virus,  and as a result, had a colossal increase in eCommerce sales throughout February -  with online sales increasing by a staggering 101.5% in comparison to the same date the year before.

A changing reality: Which verticals are affected most? ‍

As the virus spreads and government calls for “social distancing”, entire populations are instructed to stay away from bars and restaurants and from any social/external gathering. Travel is also strictly banned.

This resulted in a new reality, where the travel industry is reduced to nearly zero, and restaurants, bars, and shopping malls are also hurting.

On the other side of the food-based retail economy, grocery stores have had to act quickly and cut store hours in order to try to meet the frenetic demands of the virus’ spread. Customers have been buying up in bulk, scared of being locked at home while inventories are diminishing.

A recent analysis from Contentsquare gathered information from over 1,400 websites, 1.8bn anonymized user sessions, and 50m transactions to break down the current online shopping sphere. They have found that purchases on travel sites were decreased by a fifth (-20.8%), while the average conversion rate on those sites also took a hit (-8.5%).

Findings also reveal that online grocery purchases have grown by 20%, while shoppers have spent 26% more time on grocery websites. Customers are buying more healthcare products as well (+27%). Other interesting findings are a rise in the sales of underwear, lingerie, and sex toys (+35%), and a reduction in the scope of outdoor sports-equipment sales(-28%).

Data is eventually supporting the current state of home-centered reality and social distancing. Every type of indoor-consumerism is increasing online - home furniture, lingerie, and indoor sports equipment,  while outdoor-consumerism such as traveling is decreasing.

How retailers are adjusting their offering to  handle the new reality

New consumer behavior and panic buying are hitting globally as the pandemic spreads. Consumers have managed to clear out store shelves and the demand is also impacting the delivery abilities of merchants like Amazon.

Online delivery and food chains are finding it hard to cope with the overwhelming demand.  Amazon’s staff have reportedly experienced lengthy queues to get into delivery stations and extra time required to receive products.  Amazon even cautioned consumers that spiking demand was overpowering its capacity to get them the items in a timely manner. Amazon, as well as other large retailers, have also announced that they are hiring -  in order to keep up with the increasing demand and supply deliveries on time.

The struggling travel industry also had to adjust its offering as the decreasing demand for travel has driven them to offer free cancellation and flight-rescheduling policies to help keep the flow of money going.

Restaurants are also hurting as consumers stay indoors, and are therefore shifting their operation entirely to deliveries and take-outs.

Food delivery services e.g. Uber Eats announced that they will be waiving delivery fees for independent restaurants in the US and Canada, to encourage the flow of orders and keep businesses afloat.

On the other side of the food retail economy, grocery stores and supermarkets are experiencing overwhelming demand and had to expand their delivery operation and monitor their supplies as consumers hoard the shelves.

Where is eCommerce headed to next?

A good indication of where eCommerce might be headed to can possibly be found in a model of a country that has managed to almost perfect the use of it in recent years: China.

China had to metamorphose its eCommerce in the days when the SARS outbreak hit, forcing websites such as JD.com to start to sell their products online. Today,  they are the largest online retailer in China.

As our reality shifts and changes, we can expect that the presence of COVID-19 will result in consumers continually moving their purchases online, and the impact would be even more far-reaching as the COVID-19 spread is more global in nature.

As long as the current situation ensues, we can expect to see more door2door offerings and once retailers will overcome the unexpected surge they’ve been experiencing with enough manpower to handle the overload, it will also set a good infrastructure for the future - if and when the next pandemic hits.

The main goal of Strong Customer Authentication (SCA) was, and still is, to make online payments more secure for both customers and businesses. But similarly to vaccines, once a new one is invented, viruses find new loopholes to thrive in. While the basics stay the same, the fraud prevention environment is ever-changing. That means that businesses need to constantly stay on top of their game, just like fraudsters.

A few words about SCA

Strong Customer Authentication, and the regulations involved in its enforcement e.g. 3DS 2, are designed to reduce fraud by making the checkout process more fortified by the stipulation of a two-factor authentication process which is based on additional information that the user provides.  SCA requires the use of at least two of the following three elements:

• Something the customer knows (e.g. a PIN/Password)
• Something the customer has (e.g. a Phone)
• Something the customer is (e.g. fingerprint, facial/voice recognition)

The fortification of the identification process is aimed to minimize the probability of fraud by strengthening the verification of the customer’s identity. As beneficial as this process is, it won’t stop fraudsters from devising new ways to fight it. The introduction of the chip-and-PIN technology drove fraud to the eCommerce channel. Before eCommerce became a main drive to the online fraud industry, fraudsters were thriving in channels of mail and telephone orders way before its existence.

Asking the experts

We asked Ori Troyna, PayU's global product security clan lead, about the changing conditions in the fraud and security sphere, and where he sees fraudsters turning to next:

Q: What are the most prevalent fraud attacks you see in payments?

A: I see three types of fraud attacks which are more prevalent than others:

1 - Fraud related to Tokens - whether trying to steal them or find weaknesses within them. The objective is to retrieve the information behind the encryption.

2 - Credit-card database theft - we see these types of breaches in many countries. I am referring to massive databases of thousands of credit card numbers which are offered for sale.

3 - Account takeover - attacks designated to gain access and credentials to personal accounts in order to get a hold of the payment method(s) related to that account. Those attacks are especially prevalent in websites where basket sizes are relatively small - eBay, food websites, etc. In Brazil, there’s an entire market of thieves whose main goal is to take over ifood accounts to get free food or resale.

Q: In your perspective, how has SCA changed fraud attacks and what do you expect its evolution to be?

A: I think that even post 3DS2,  we are still going to encounter attacks trying to bypass SCA. The same thing happened after 3DS1.

The explanation for that might be that even though there is an obligatory deadline, when we have not-for-profit actions that merchants need to take, those tend to be partial and Adhoc - leaving us with a breakable and even vulnerable solution.

Some fraud-trends we can expect to see in that context are attacks targeting low transactions, or attacks targeting various stages of the fulfillment process. I also foresee attacks taking advantage of the lack of transaction signing in online payments. When a customer is purchasing a commodity in a physical store, he/she is requested to sign for the amount they had to pay. That part of the purchase almost never exists in the 3DS process, so fraudsters can change the amount the customer allegedly agreed to pay to a different one.

The last trend I foresee fraudsters putting a bigger emphasis on is social engineering, especially via mobile. The human link is eventually very weak and we tend to very lightheartedly press on incoming text messages or install apps on our mobiles. I can think that I’m paying X amount to a specific app whereas I'm actually paying to another.

Q: What new forms of fraud can we expect to see in 2020? 

A: I expect to see a greater emphasis on fraud taking place in the fulfillment process, where fraudsters will manipulate and take advantage of weaknesses behind-the-scenes. I also see the use of social engineering as a major fraud trend, with a special emphasis on taking advantage of the weaknesses of different devices e.g. mobile.

Q: What markets/segments are more susceptible to fraud?

A:  Small basket-size transactions (less than $100) are more susceptible to fraud, as well as transactions involving audiences or credit cards which are non-European. ‍

Q: What’s the best practice you can recommend to businesses to fortify their operations against fraud? 

A: Until a global standard will be enforced, I wouldn’t give up on traditional fraud solutions. I would do my research and check whether different solutions allow me to identify problematic transactions beyond those that are SCA-compliant (we mustn’t forget that SCA is not applicable to all transactions, and there are quite a few exemptions). I would also make sure my SCA implementation is according to the requirements and do a web/mobile analysis for my website to check what possible fraud vectors can be relevant.

My last recommendation is to implement the not-so-common transaction signing. This small but powerful implementation can eliminate many fraud attacks that may occur during the fulfillment process.

Q:  Final words of advice? 

A: Like everything else, there’s never a magic solution, and fraud is no exception. Nevertheless, we do see a positive trend of halting fraud attacks - even momentarily - by coming up with new and improved ways to protect transactions. It’s our job as “protectors” to find new ways to challenge those who try to make the ecosystem vulnerable and unsafe.

Gone are the days when a payment transaction was a matter of simply asking and receiving money for a commodity. For global merchants, the payment ecosystem is increasingly becoming more complex, and as payments are shifting towards eCommerce, the challenges and players in this sphere are growing by the day and are not showing any signs of slowing down. Just in the retail segment, global eCommerce sales are expected to reach 16.1% of all retail sales in 2020 and 22% by 2023.

Now that a big chunk of transactions is performed online, merchants need to face new challenges in the execution of transactions e.g. increasingly smaller approval rates, new regulations for the benefit and protection of customers, and transactions that are flagged as fraudulent.

The following article is designed to simplify some basic terms and processes for those dipping their toes in the world of payments. The first section will discuss the journey of a payment transaction while the next section will arm you with some useful terms to help you understand the ins-and-outs of the payment ecosystem.

The Payment Cycle

To the average consumer, when a purchase is made, it seems that the process is instantaneous and straightforward. In reality, behind each transaction lies a complex infrastructure that involves a multitude of players that each has a part in the execution of the payment. The five main players in this flow are:

• Buyer
• Merchant
• Acquirer
• Payment Networks/ card schemes
• Issuer

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The payment cycle begins with the buyer, that chooses to purchase a commodity for, let's say, a $100. The moment the buyer presses the confirmation button in its shopping cart, a process of Authorization begins, in which the Merchant forwards a request to the acquirer, and the acquirer, in turn, forwards the request to the card scheme associated with the buyer’s card. The card scheme (visa, Discover, American Express etc.) forwards the request to the issuer and the issuer checks if the cardholder has enough money to pay for the transaction. If all goes well a confirmation is sent back via the different stages until it reaches the merchant who submitted the request in the first place. Then, a Settlement process takes place in which the merchant submits the transaction via all of the channels again until it reaches the cardholder, which is then charged for the money. On its way back to the Merchant’s account, there are multiple processing fees and “cuts” taken from the sum by the different players. 

I want to start to receive money. What are the key elements I need to have in my payment stack? 

You may have heard of terms such as Gateways, PSPs (payment service providers) and POLs (Payment Orchestration Layer). When kickstarting a business that needs to receive money, you will need to get to know them, and some more personally than others.

The basic and most important thing you will need as a merchant is an acquirer/PSP. The market is filled with acquirers and your choice will rely on the scope of your business, the location(s) in which you operate or plan on operating and your business needs. Some acquirers have better acceptance rates in certain geographical locations than others or with specific banks. It will all come down eventually to your business strategy and logic. If you plan on operating in multiple locations you might need more than one provider to maximize your acceptance rate and customer conversion rate (your customers’ willingness to pay) by offering your target customers their preferred payment methods of choice.

When you have more than one PSP/acquirer, you might need a Gateway to channel the payments to one provider or another. Some acquirers also function as gateways which can add another complexity to the mix.

What about a Payment Switch? Or Payment Orchestration?

The above solutions are more advanced layers that have some of the functionalities of a payment gateway, but their main strength lies in the tools they have to optimize payments (e.g. smart routing/failover rules, data and report generation, and more). These tools become more crucial to hypergrowth merchants or merchants that have an increasingly complex payment stack, as they are an added functionality that - as the name implies -  is designed to orchestrate between multiple elements.

You can read more about the functionalities of Payment Orchestration.

Regulations and Fraud prevention

Another aspect merchants need to take into consideration when they start to receive money is the aspect of regulations and the risk of fraud in online transactions. It will not be long before terms such as Tokenization, SCA and PCI-DSS will be popping and require your attention. These regulations are obligatory to merchants and come to both protect customers from card theft and fraud as well as to increase the acceptance rate and make the checkout process smoother and successful. These parameters - even though obligatory -  benefit both the customer and the merchant. Learn more about them here. 

Your Pocket Payment Glossary 

Below you’ll find a summary of essential payment terminology which will be extremely useful for you to always have on-the-go. Some terms are basic and define processes and players, while others refer to slightly more complicated acronyms, which you’ll encounter sooner or later:

• Alternative Payment Methods (APMs): Alternative payment methods are a new way of paying for goods or services not via cash or major credit card schemes. APMs include prepaid cards, mobile payments, e-wallets, bank transfers, ‘buy now, pay later’ instant financing, and more.

• Acquirers: If a transaction is associated with a credit/debit card, the acquirer connects to the buyer’s issuing bank and requests authorization (after running a risk assessment).

• Batch Processing: A type of data processing and data communications transmission in which related transactions are grouped and transmitted en masse for processing, usually by the same computer and under the same application.

• Card Not Present (CNP):  is a payment card transaction made where the cardholder does not or cannot physically present the card for a merchant's visual examination at the time that an order is given and payment effected, such as for mail-order transactions by mail or fax, or over the telephone or Internet.

• Chargeback: A chargeback - or a reversal – is the return of credit card funds used to make a purchase by the buyer. A chargeback can occur if a consumer disputes a purchase made using their credit card, claiming that it was fraudulent or made without their knowledge or permission. When a buyer disputes a purchase, the credit card company involved reverses the charge, reimbursing the buyer in full and debiting the business’ account.

• Cross-Border Payments: Payments made between accounts in different countries, from the payment system of the country of origin through a gateway operator to the payment system of the country of receipt.

• Gateway: The interface between the payment process and the customer. The gateway connects the payment technology (terminals, shopping carts, etc.) and the issuing bank’s card processing networks.

• Interchange Fees: Fees paid by the acquirer to the issuer as part of the transaction process.

• ‍Issuer/Issuing Bank: An issuer is a financial institution, such as a bank or a credit union, which offers a credit/debit card and is liable for the use of the card. The issuer is also responsible for the billing and collecting of funds for purchases that were made using that card. In the payments value chain, the card issuer pays the acquiring bank for purchases of goods and services made by the cardholder.‍

• Know your customer (KYC): A common practice that’s become a go-to for financial institutions, credit companies, which require that customers will provide them with detailed information about their business to ensure that they are not involved with corruption, fraud, money laundering, etc.‍

• Merchant Application Form (MAF): A Merchant Application Form needs to be filled by merchants to be able to process payments. The application involves the information about the organization, the executives along with partners (owners), and personal data about the owner’s business type and information about the account in the financial institution.‍

• Micropayment: A payment of under $20. These payments are particularly popular for selling information and content online.‍

• Payment Orchestration Layer (POL): Payment Orchestration Layer is a technological layer designed to consolidate a company’s payment data, facilitate the easy addition of payment providers and functionalities into a company’s payment stack, and allow it to optimize its payment operation with both the payment data and the tools to implement its business strategy.

• ‍Payment Service Provider (PSP): A Payment Service Provider is a third party that provides merchants with the ability to accept electronic payments, enabling connectivity to financial institutions and credit card acquirers.‍

• PCI DSS (Payment Card Industry Data Security Standards): All entities that store, process, and/or transmit cardholder data are required to adhere to these standards, and they are therefore obligatory for merchants, financial institutions, software developers, processors, etc. These security standards are intended to help ensure the safeguarding of payment card account data.‍

• Point of Sale (POS): The terminal where the payment takes place (credit card swiping infrastructure). An mPOS is a mobile point of sale, referring to infrastructure that attaches to a mobile device to accept credit card payments.

• ‍Processing: The payment processor receives a response from the acquirer and either process the payment or lets you know it was declined.‍

• Recurring Payments: A transaction charged to the cardholder (with prior permission) periodically for a variety of goods and services, (e.g. memberships and subscriptions).‍

• Settlement: As the sales transaction value moves from the merchant to the acquiring bank to the issuer, each party buys and sells the sales ticket. A settlement is what happens when the acquiring bank and the issuer exchange data or funds during that function to complete the transaction.

• Tokenization: A data-security technology that substitutes random numerical sequences for sensitive credit card data in the transaction process so it can be passed over the internet without exposing the data and user identity to cybercriminals.

As 2020 gets underway, we decided to explore the top online payment trends that are shaping, changing, reaching key tipping points, and driving disruption in online payments.
As e-commerce continues to rise, online payments are projected to rise from $82 billion to $138 billion between 2018 and 2024.

Such tremendous growth has merchants facing more challenges than ever before, that forces them to adjust their stack and offering to accommodate the changing market. These are the top 5 trends that hyper-growth merchants cannot afford to ignore in 2020:

Mobile payments rise to dominance

We start with a megatrend driving global growth in e-commerce. Mobile commerce, or m-commerce, is becoming the main medium for online payments. In 2020, the use of mobile devices in online shopping will continue to increase rapidly, especially in developing markets. New mobile payment providers will continue to emerge, and merchants will need to put a bigger emphasis on the shopping experience in mobile devices.

Estimates vary, but mobile payments are either about to overtake payments made via desktop or have already done so! If we zoom in on two major markets. In the US, by 2021, it is forecast that approximately 54% of all e-commerce sales will be generated via m-commerce. In China, m-commerce dominates the e-commerce industry, with 76% of e-commerce transactions completed via a mobile device as in those markets it is much more prevalent it is more common to have a mobile phone than an actual bank account.

The rapid rise of m-commerce has ramifications for all hyper-growth merchants. A focus on optimizing the mobile payments experience is critical in 2020 and beyond. Failing to offer a smooth, frictionless, and convenient mobile payments experience risks alienating customers and missing out on massive growth opportunities. The design and function of the mobile checkout are of particular importance. Introducing functionalities which reduce payments friction like one-click checkout, will be critical as shoppers’ intolerance to any form of inconvenience continues to rise.

Payment flexibility goes next level

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In 2020 many merchants will need to consider offering an increased level of payment flexibility. In this case, payment flexibility does not refer to the need to provide localized payment options, methods, and currencies to customers in every market. That’s just expected and par for the course.

In the coming year, a growing number of customers will expect to have options to receive goods before they pay for anything, and split a purchase into several interest-free installments. The ‘buy now, pay later’ option is poised to take off in e-commerce payments in 2020, and is in fact, already well established in some parts of the world, in which Klarna is a very popular alternative payment method. Providing this type of payment flexibility will be of particular importance to merchants in the fashion and footwear industries, where customers often order numerous items to try, sending back anything they don’t want to keep.

Although merchants will generally pay a higher fee for providing these flexible payment options, doing so can lead to bigger baskets and more sales. What’s more, added payment flexibility of this kind can deliver a competitive advantage over other merchants not yet offering it. And let’s not forget, the competitive nature of e-commerce today, means that it’s vital to meet keep up with customer demands! The good news is that the potential growth in basket size, as well as an increase in conversions and the ability to move more full-price inventory, makes up for this added expense.

Cross-border payments surge

E-commerce has exploded around the world over the last decade. In 2020, the globalization of e-commerce will continue as more localized payment options will become available to simplify cross-border payments and improved logistics speed up delivery. According to Accenture, cross-border e-commerce now makes up 20% of e-commerce and is growing a 2X the rate of domestic e-commerce. China alone is anticipated to reach 1.5 billion US dollars in transaction value in B2C cross-border e-commerce in 2020. When it comes to B2B cross-border payments, Frost & Sullivan forecasts global B2B cross-border payment transaction volume to have reached about 2.3 trillion US dollars by the end of 2020. One impact of cross-border transactions continuing to surge is that hyper-growth merchants will have to contend with more complicated authorizations.

Compliance gets complicated

Regulators around the world will continue ramping up efforts to protect sensitive consumer privacy and fight against a growing threat of fraud. Consumer protection regulations that impact online payments will make it more challenging for hyper-growth merchants to keep their payment stacks compliant in 2020. Of course, GDPR and PSD2 are now already in effect. Hyper-growth merchants now operating or planning to operate within the EU will need to ensure compliance with stringent requirements concerning payment data collection and storage as well as Strong Customer Authentication (SCA) standards for online payments.

In the US, the California Consumer Protection Act (CCPA) went into effect on January 1st. CCPA requires merchants that collect or use the personal data of California residents (including payments information) to disclose upon request the categories of personal data collected about a consumer, and sources from which the personal data was collected, as well as several other details. Multiple other states have CCPA-inspired bills in the works, including New York, Massachusetts, and Maryland, and that’s not to mention compliance with regulations in other countries. The bottom line. New regulations are rolling out continuously, and hyper-growth merchants with global operations will begin to feel the impact of having to comply with an ever-increasing number of regulations. On the other hand, compliance has its benefits and potential to simplify the check out process for customers and thus increase their overall turnover. Either way, it is a central component that merchants need to prioritize within their stack.

AI & machine learning tools lead the way in fraud prevention

Despite new industry standards, regulations, and merchants able to employ more advanced fraud solutions, fraud will take center stage in online payments and e-commerce in 2020. Criminals have become more sophisticated and will continue to innovate, seeking out new techniques and softer targets this year. They will arm themselves with new technological tools and have the ability to access sensitive personal information, like credit card numbers, anonymously on the dark web with ease.

Strategies like address scrambling, synthetic identity fraud, and a range of others will place unprecedented pressure on merchants in what will be an ever-widening fraud landscape. Hyper-growth merchants must be prepared to face new and emerging threats and handle an increasing volume of old ones. Doing so will require the use of enhanced fraud detection solutions that use data, AI, and machine learning to protect customers without adding more friction to the payment experience will be critical. These solutions learn from each transaction to improve their accuracy and can adapt to shifts in the nature of fraud unlike traditional approaches such as rules engines and scoring. They are also far more capable of identifying potential fraud patterns that humans are unlikely to see.

With added complexities, 2020 is the year merchants must simplify their payments stack.

As e-commerce continues to boom, consumers increase their expectations, and new regulations roll out, online payments are not getting any easier. Payment stacks designed for the days when e-commerce was far more straightforward and local simply no longer cut it anymore. In 2020, hyper-growth merchants relying on fragmented and complex payment infrastructures will be increasingly incapable of supporting hyper-growth and face increased risks across the board. ZOOZ’s enterprise payment hub provides a secure, unified, and smart foundation that can handle the inherent complexities in today’s global payment ecosystem and quickly adapt to changes. To learn more about the benefits of ZOOZ’s advanced payments hub, make sure to contact us today.

How do downtimes affect eCommerce?

No matter what product you are selling, your online store needs to have processes in place to ensure that you’re operational 24/7, to avoid possible revenue loss in case of downtime.

Downtimes happen to merchants constantly and are the most feared by events that businesses can experiences. Nowadays, businesses cannot afford to have downtimes, as these result in large amounts of wasted revenue on transactions that could have otherwise been completed.

Every second a merchant’s payments system is down can result in abandoned shopping carts, lost revenue, and reputational damage. For large retailers, such as Amazon.com, a mere one minute of downtime can mount to a staggering  $220,318.80 loss.

Downtimes happen all the time

The eCommerce sphere is a gigantic space experiencing disruption almost every day, and companies need to fortify their payments as best as they can against possible downtimes.   Payment providers are significantly affected by outages. A SafeCharge study found that 72% of retailers admitted to financial losses ranging from €10,000 – €100,000 per outage, with 11% citing losses of €1m or more. The reasons for outages are varied and can be caused by reasons such as data center downtime, technical errors, and more.

The answer? Failover rules

Some modern payment platforms equip merchants with the tools to fight the prospect of downtime.  Failover rules, are one way to do that. 
These rules are set to automatically route transactions from one provider to another, in case the first-choice provider is down.

At ZOOZ, we give you an overview of all of your providers and their current performances so you can spot if one of them is down or not. ZOOZ also allows you to set rules to re-direct payment to an alternate provider automatically in case one provider is down. The routing logic can be as simple or as complex as your business requires.

Here’s a short video to show you how easy it is to devise Failover Rules:

There is no shortage of payment solutions or segment-solutions in the market. Each is designed to answer one, or multiple, requirements, and merchants are often left perplexed as to which one might be the right solution for them - especially since many solutions share similar features.

While the payment process is seemingly simple, in reality, merchants need to face a multitude of challenges in the optimization process. Ultimately, the factors that need to guide the selection of one solution over the other should be the result of understanding where your business currently stands, and what challenges you are facing or will be facing in the near future.

What’s a POL? 

In a nutshell, a Payment Orchestration Layer (POL) is a technological layer designed to consolidate a company’s payment data, facilitate the easy addition of payment providers and functionalities into a company’s payment stack, and allow it to optimize its payment operation with both the payment data and the tools to implement its business strategy. POL helps merchants overcome challenges in the fields of fraud and security management, cost of payments, IT challenges and the need to support growth and scalability in penetration into new markets.

Who is it for?  

POL becomes a necessity for merchants with a large or growing payment operation or for merchants who are thinking strategically, knowing that they will need to expand their business and offering in the future. POL offers merchants the infrastructure that allows them to build a solid base for their growing operation, streamline their internal and external payment processes and easily add providers and flexibly change their stack according to their evolving business needs.

Payment Orchestration Architecture 

While POLs have multiple features, their core functionality is orchestration which comes into play in the following features:

Dynamic, customizable routing rules

The ability to set transaction routing rules according to business logic e.g. maximizing approval rates and enhancing customer experience.

These rules should be easy and straightforward to devise, even by individuals without an engineering background.

POLs also allow merchants to test and generate rules to test new strategies e.g. A/B testing of various providers and more.

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Set failover rules

Downtimes are the most feared-from occurrences for merchants, as they have the potential to have a hazardous effect on their revenue, so the ability to set rules to send transactions to a back-up provider in case of downtime is of extreme importance, especially for merchants that operate 24/7.

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Tokenization

POLs should have the ability to enable generation and coordination of tokenization/detokenization (whether by themselves or via a third party).

Easy, straightforward interface

POLs allow to easily set rules and extract information even without an engineering background, making it usable across the organization.

Cloud-based solution

POLs are usually cloud-based, which allows them to deal with their distribution requirements, scalability, resiliency, and security attributes.

Compliance with regulations

As merchants are constantly required to make sure they are compliant with a myriad of regulations such as SCA and 3DS, their POL solution should also be up-to-date with the market’s requirements and be able to do actions such as flagging card credentials for recurring transactions and more.

An API-based solution

The ability to easily add and integrate multiple providers, acquirers and more via a single API.

What are the benefits? 

POLs benefit both the front and back ends of the payment process. They have a profound effect on the customer experience as they help to maximize transaction routing, beat downtimes and consequently increase approval rates, all while creating a smooth checkout experience for the customers.

Additionally, POL supports merchants by providing them with the tools to route, A/B test and maximize their performance with smart reporting and allows them to transform their payment data into actual strategic decisions to increase their revenue and minimize their operational costs.

Payment Orchestration? Gateways? PSPs? 

It is important to say a few words about the difference between the various solutions and

the roles they play in the market, and what makes a POL different.

While multiple solutions offer connectivity to various endpoints like acquirers and PSPs - and some even fill a lot of the functionalities we’ve mentioned above -  gateways and PSPs are often very demanding, and require merchants to set rules and functions in their systems manually, something that usually needs to be performed by an engineer.

These solutions also lack at their core the agnostic aspect of a POL, meaning that they will always have some “foreign”  incentives that will interfere or won’t be completely aligned with those of the merchant's.

POLs, on the other hand, offer both the flexibility to change, add and adjust processes, rules, and integrations with a click of a button, while also being an agnostic tool in the hands of the merchants to create the rules and business logic fitting to their individual goals.

Today’s merchants, especially those that operate on a global scale, are faced with a more complex payment ecosystem than ever before, and they often need to handle a growing number of local payment methods and providers and to seamlessly integrate them into their stack.  
Juggling between multiple geographical locations, a multitude of PSPs and acquirers, as well as the need to consolidate and extract business data for BI purposes are pain-points that have a direct effect on a company’s bottom line.  A well-architected Payment Orchestration layer allows merchants to turn payments into a truly valuable asset and is a key component to enable the forward-looking merchant to smoothly grow its business.

Want to hear more? Contact ZOOZ today

What is the Return Authorization Mandate?

The Return Authorization mandate, introduced by Visa and Mastercard, is intended to improve a cardholder's experience by showing them a credit/return authorization on their online banking statement in real-time.‍

Eliminating the Long Wait

This mandate comes to rectify the current state, in which an issuer is not aware if a merchant has given a refund to a cardholder until they receive a clearing message.
Today, purchase return information can take a varied number of days to make its way back to the cardholder’s account. Often, refund transactions are reconciled in different processes than standard payment transactions, and in some banks, it can take many days for the refunds to be billed to the cardholder accounts.
The lack of regulation and delay in settling the refund results in frustration, confusion, and unnecessary issuer chargebacks, as well as inquiries from cardholders about the status of the refund.

Benefits for All

This mandate will  allow a card issuer to authorize and validate a refund for a cardholder and thus minimize the negative user experience if an account doesn’t exist or has been closed. There will also be benefits on the merchants' side - they will receive the decline reasons online which can help in case there's a need to refund the customer differently for the transaction to be successful.

Key Dates to Consider

Here is the timeline as outlined by Mastercard and Visa: 

18 October 2019
Issuers and their processors must support refund authorization requests for all card programs (exceptions apply). An issuer must respond to an authorization request with a valid approval or decline response.
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17 April 2020 
By this date, acquirers and their processors will have to be able to send refund transaction authorization requests and to forward the issuer’s response to the merchant. Issuers will also be obligated by this date to update their websites and applications to showcase pending refund information.

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How the Flow Works

The approved refund authorization flow should look like this:

- Cardholder contacts merchant for a refund
- Merchant sends purchase refund authorization request to the acquirer
- The acquirer then forwards request to Visa/Mastercard 
- Visa/Mastercard relays a request to the issuer
- Issuer displays a refund “pending” language
- The cardholder receives a refund after the financial settlement

What’s Next?

Failure to support this mandate by the stated deadline will result in additional fees for non-compliance, as well as chargebacks, which may be used by issuers in case a refund is not authorized before being cleared. We strongly recommend that you assess the impact of this mandate on your systems and adjust accordingly.

At ZOOZ, we are closely working with our providers and merchants to understand the implications of this mandate and implement the necessary changes to ensure our merchants’ compliance by the stated deadline.

Branching into new territories‍

Stepping into hypergrowth mode usually requires to think big.

Big means to expand into new markets and attracting more customers to increase profitability. eCommerce allows that to a large extent - its nature is to enable merchants to spread out to regions they haven’t operated in before, and to increase their spread with relative ease. There is a caveat to that statement though, a “catch”, if you will.

The downside of spreading is that even though you reach a multitude of people from different regions, enticing them to actually pay for the goods is not easy, and even if a customer is willing to make a purchase, there is still another obstacle to solve - offering the customer their preferred payment option to facilitate easy payment.

Local vs. Global 

The world is constantly headed towards globalization, giving a false sense that everything is uniform no matter where you go. In reality, the payment world couldn’t be more fragmented. The global payment ecosystem shows a very different reality, one that has a tremendous effect on a company’s payment strategy.

The diagram below outlines a rough division of popular payment methods across the four main regions. While the North American and EMEA regions seem similar at first glance, the differences are more profound when comparing them to the Latin American & APAC regions; While card payments are still considered a “safe bet” for merchants operating in the European & N. American markets, if a merchant wishes to approach the Chinese market, he’s up for a big disappointment.  
While Westeners still use credit cards as a popular method, in China, eWallets are on the rise -  both in eCommerce and POS.
The equation becomes simple - to increase profitability, merchants need to tailor their offering to the regions they wish to target.

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Differences within regions

The fragmentation of payment methods doesn't just end among the different regions. It is true that the main, clear-cut division is between east and west, but the fragmentation of local payment methods within these regions is very big. Let’s break down the main ones:

North America

Despite the rise of many new payment options globally, online payments in North America continue to be dominated mostly by credit and debit cards (34% and 19% respectively). Nevertheless, the use of eWallets, which account to 20% of online payments,  continue to rise and is becoming more prominent both in online payments as well as POS.*

*WorldPay Global Payment Report (2018)

Did you know?

One of the most popular mobile payment apps in the US is… Starbucks! (2018)Yes, that’s right. The chart below, taken from a 2018 study by eMarketer ranks the Starbucks app as the most popular mobile payment platform in the US. With a staggering number of 23.4 million users, Starbucks beats second-placed Apple Pay (22 million) and the coffee giant is expected to maintain its lead into 2022. This information might seem amusing but shows the growing use of alternative payment methods, even in regions where the dominant methods are still credit and debit cards.   
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EMEA

The European, Middle East & Africa regions (EMEA) presents a very diverse market consisted of a myriad of payment methods, bank transfers
are prominent and lead eCommerce payment share in countries as diverse as Germany and Nigeria, while eWallets have become the leading payment option among Danish consumers. Payment methods are also fragmented within regions, some of which are relevant only in specific ones (e.g. Klarna in Germany, Sweden, Norway and Finland; Paypal, Jiffy and Payljb which is used almost exclusively in Germany, Croatia, and Spain). Understanding the different requirements of every region is important if merchants want to target specific populations - i.e. if your target country is Germany, then integrating the most popular payment methods in this region will have a positive effect on the willingness of clients to go through the checkout process. According to Wordpay's Global Payment Report (2018), future payment innovation in EMEA is expected to flourish under the European Union’s Second Payment Services Directive (PSD2), which is expected to reduce profoundly fraud rates. eWallets are also expected to grow profoundly in these regions.

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Did you know?

France & Sweden are leading in non-cash payments (2017) A research conducted by Forex Bonuses analyzed 20 of the world’s top economies and ranked them according to their cashless credentials. France and Sweden ranked highest in number of transactions made by using non-cash methods.

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Latin America

In the Latin American Countries (LAC), many consumers are unbanked and often use their favorite cash vouchers for online payments. Others may use credit cards, but most can only be used domestically. The process usually goes as follows: The cash voucher brand is selected at checkout, a voucher is printed with a code, which is settled by one of the agent-chains, who often oversee the scheme. The vouchers often get the same branding as the store it will be used for.

To make things more complicated, the vouchers also differ from country to country. Making the payment process an even more local-centric process.

Credit cards are also a popular payment method in LAC, because almost all issuers offer installments options.  
An important things merchant need to have in mind when entering a LAC country is that the majority of cards issued in those countries can only be used at domestic merchants – those for international use come with a higher annual fee. So merchants entering a LAC country from abroad will need to make the proper integration with a local acquirer. E.g. In Chile, it is necessary to be integrated with Webpay Plus in order to accept cards online.

APAC

As we’ve touched briefly in the Global vs. Local paragraph above, eWallets are growing in popularity as a more convenient and secure way of payment for commodities in many markets. In the APAC region, where the majority of the population is unbanked, and eWallets have become a go-to option for online payments (eWallets are also extensively used in physical POS as well as for money transfer purposes and more).

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Just to show how much the use of eWallets is prevalent, the diagram below shows the use of eWallets in China, both for online and POS payments:

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Businesses wishing to serve Chinese consumers need to recognize the growing need and make the necessary adjustments to an entirely different set of expectations. This is certainly true of eCommerce, where integrating Alipay and WeChat Pay, as well as UnionPay, the dominant Chinese card brand scheme, becomes a must.

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Did you know?
‍The Chinese Mobile Payment Market Is 35 times bigger than its American counterpart (2017)China’s mobile payments market was worth $17 trillion in 2017, roughly 35 times more than America’s $49 billion market.

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Choosing the right payment methods for your business

Even by this brief overview, the fragmentation of payment methods around the world is very noticeable and requires personal consideration when merchants wish to branch out into new geographical locations.

If a business grows gradually, then maybe merchants can afford a trial-and-error phase, to check and inspect what works for them. But if a business is rapidly growing, there is an increased urgency to get into new markets, and fast. That is why getting to know the global ecosystem is so important. This versatility might cause some confusion at first, but as long as merchants narrow down the regions they wish enter, then it’s only a matter of knowing which are the most popular payment methods in their chosen regions and then integrating them into their offering.

ZOOZ currently supports a multitude of payment methods. For a full list make sure to use this handy tool to easily search for your desired payment method/PSP.
Want to learn how to optimize your payments? contact us today to learn more.

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While the B2C segment (i.e. businesses selling directly to individual customers)  is the most frequently talked about, merchants have a lot to get excited about when it comes to the B2B (business to business) segment.

What are B2B online payments?

The B2B e-commerce market refers to online sales taking place between two businesses. Top examples for such market can be Amazon and Alibaba.com, both of which serve an important marketplace for businesses to find what their business needs . From paper clips, mouse-pads, and desk lamps, to 3D printers and computers, businesses can now buy almost anything online, and in bulk.

Frost & Sullivan forecasts global B2B transaction volume to top $6.7 trillion by 2020 with about 2.3 trillion US dollars stemming from B2B cross border payments. This will make the B2B e-commerce market twice as large as the B2C market by 2020.

Beyond its huge market size, B2B is growing at a faster rate than its B2C counterpart,  And that's not to mention that B2B e-commerce transactions are characterized by high-average order values, repeat purchases, and higher conversion rates than its B2C counterpart. Targeting the global B2B market is simply a no brainer for hyper-growth merchants seeking massive growth opportunities.

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The challenges

Tapping into the lucrative B2B market comes with challenges. Cross-border payments are complex, fragmented, and characterized by uncertainty, and high costs. Let’s take a closer look at some of the main difficulties all merchants will have to overcome when managing and processing B2B cross border payments:

The world might be going global but local payment methods still dominate the market

Today's consumers and businesses expect nothing less than a seamless payments experience. Merchants must offer customers the local payment method of their choice to achieve this, but that can be much harder than it sounds. First of all, integration of new payment methods can be a cumbersome and expensive task that requires time and development time. And the challenges don't end after integration either. As more payment options get added, merchants must be able to handle increased exposure to provider downtime, outages, and fees.

Challenging Authorization Process

While B2C purchases usually range from a few dollars to several hundreds of dollars, average B2B cross border payment values can range from several hundred to thousands of dollars, and even greater. With higher average transaction values, complex cross border authorization becomes even more complicated as high transaction values cause financial institutions fraud tools to kick into action. The result for merchants is often lower approval rates which end up frustrating customers and lead to lost sales.

High and Unpredictable Transaction Costs

For hyper-growth merchants supporting dozens of local payment providers and increasing transaction volumes in multiple currencies, processing costs and fees can put a dent in profit margins. These costs also create inconsistencies between the amount sent and the amount received, adding uncertainty to each transaction. And so, with skyrocketing processing costs and currency conversion fees, merchants expanding into new markets are usually faced with three options. They can absorb these added costs, transfer them onto their customers, or invest in a payment system that can reduce or avoid these costs altogether.

Compliance and Regulations

Another challenge for merchants selling to businesses around the world and conducting cross-border payments frequently is the need to stay compliant with different regulations (SCA and 3DS to name a few), card scheme standards, and fraud-protection. These require companies to allocate the human and financial resources to line their business with the requirements.

The solutions

Fragmentation, uncertainty, and high costs demand merchants to find a smarter way to manage, optimize, and control their payments globally. That's where a smart and versatile payment orchestration panel comes into play. That layer gives businesses a bird's eye view of their operation and allows them route, control and inspect the costs, downtime and flow of their ongoing payments. Some key components that are important to overcome the challenges are:

Dynamic Transaction Routing

B2B cross border payments don’t have to come with high costs and low approval rates. Dynamic transaction routing makes it possible for a business to devise rules and control to where each transaction will be directed. This feature allows a business to route local transactions in Germany for example, to a certain provider that showed - according to the accumulated data from previous transactions - the highest approval rate. Transactions can be routed according to value, location, min/max parameters and more - all according to the options provided by the payment orchestration panel.

Single API for easy integration

Having an agnostic payment infrastructure which provides hyper-growth merchants the ability to add any payment provider or method efficiently is of critical importance when expanding into new markets. Via a single API, merchants can easily add new currencies, payment methods, and Payment Service Providers (PSPs) - thus saving time, money, and moving into new markets much faster!

Advanced Analytics & Reporting

With booming sales and B2B cross border payments flying in from all corners of the world, you’re overloaded with data. By having a unified analytics and reporting dashboard, hyper-growth merchants have the ability to gather and harness deeper insights and supercharge their reporting capabilities. It offers a complete view of payments data with all KPIs viewable in one place. Easily search and find any global payment regardless of the provider. When it comes to reporting international transactions, effortlessly create and download custom cross provider reports based on business needs, and compare and evaluate payment service provider performance.

Risk Management

Compliance with different sets of regulations can become a  headache for merchants processing large volumes of cross border transactions.

Making sure that the softwares you use are PCI compliant is both obligatory and will help you to reduce operational costs and minimize exposure to the Payment Card Industry data (PCI) security standard, as well as other regulations. Compliance also ensures better customer experience and higher transaction approval rates.

Further information about Payment Orchestration can be found here.

Final thoughts on B2B cross border payments

B2B eCommerce is becoming a major revenue factor to businesses selling products online. It's upsides such as large baskets size and worldwide spread can be both a major benefit and a downside. To enable your business take advantage of these opportunities it's important to invest in the basic infrastructure of your payments and to make sure that your payment orchestration panel allows you to control, track and maximize your transactions to ensure optimal growth.

The latest EU Revised Payment Services Directive (PSD2) adds another layer of Strong Customer Authentication (SCA) requirement to transaction flows and is planned to go into full effect as of 14 September 2019.
You are probably aware of a recent call for an extension for the above deadline. Issuers and acquirers are currently working with their local regulators in the European Economic Area (EEA) to agree whether any deadline-flexibility will be offered and if so, to agree on a migration plan.
Nevertheless, merchants should still make all necessary preparations to comply in time.

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What ZOOZ is doing for you

As part of our ongoing commitment to our customers, we are currently making all of the necessary arrangements to be fully compliant with PSD2 requirements in due course. ZOOZ efforts are currently focused on:

1. Making sure API 1.3 supports all required 3DS 2 fields. For a detailed list of supported fields please refer to our documentation.

2. Taking care of integrations with different payment providers to support merchants which are using either Internal or External MPI flows .

What you need to do as a ZOOZ customer

As a ZOOZ customer, You are kindly requested to make sure you are using the updated  ZOOZ API 1.3 version. Additionally, we kindly ask that you’ll stay tuned for communications coming from ZOOZ in the near future, as further actions may be required on your side. If you encounter any issues, you are welcome to contact our support department.

PSD2 and 3DS 2 : Further reading

The proliferation of mobile technologies and alternative payment channels has made it easier for consumers to make online purchases and led to the rapid growth of e-commerce. But while digital commerce continues to gain in popularity, incidents of fraud are on the rise as the verification of customer identity in card not present transactions becomes a real challenge.

Make sure to check our recently published 3DS 2 guide, to get a better understanding of what it is, its implications on merchants and also its surprising benefits.

GO TO GUIDE

‍Online businesses, especially ones experiencing hypergrowth, are continuously facing challenges which all stem from the expansion of E-commerce in general. Just to give an idea of the magnitude of the phenomenon, in 2018, consumers worldwide made online purchases valued at a whopping $2.86 trillion, up from $2.43 trillion in 2017. These numbers are predicted to grow even more radically, with $4.8 trillion in sales projected for 2021. And it’s not just the volume: payment method complexity too is growing as end-users demand to pay with localized e-wallets like Alipay and WeChat in China or PayTM and Mobikwik in India. Online businesses have to think about their payments presence in new and emerging e-Commerce markets like Brazil, Indonesia and the Philippines.

They need to be prepared to scale, diversify and re-globalize their payments constantly. In a world of hypergrowing payments, it’s easy to see the importance of choosing a payment platform. Hypergrowing merchants need a platform that can handle all of this diversity, change and scale. An important question to ask is: what is my payments strategy? Do I value a hands-off, uncomplicated approach that will keep my payments activity simple? Or do I prefer a hands-on, more flexible approach that allows me more control and visibility over my payments activity?Closed payments platforms are generally simple. They allow you to “plug in and go”.

The benefits of closed payments platforms are like those of a ready-made suit: they are simple, less fussy, and utilize trusted industry best-practices. The downsides are, like a store-bought suit, that they may not always fit quite right, and alterations are much more difficult, if it all possible, to implement. Open payments platforms, on the other hand, are generally more complex. Like a custom-made suit, an open payments platform is more readily tailored to the specifications of the customer. The online business that chooses an open payments platform generally has more control over their payments activity -- but this comes at the cost of time investment. A useful technological comparison is the well-known debate between Android vs. iOS. Android, the more open operating system of the two, offers more customizability and flexibility, and is a good choice for a customer who has specific, niche needs. iOS, on the other hand, is a good choice for a customer who wants a device that operates according to industry best practices and doesn’t have unique or unusual needs.

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Open Vs. Closed: Key Features

More control vs. easier configuration

Closed payments platforms have the benefit of simplicity. As an online business who has chosen to work with a closed payment platform, you won’t have to worry about too many options and choices. Many times, the options won’t even be visible to you! Because closed payments platforms value simplicity, configuration is often not accessible to the business owners. This often means that businesses have to undergo a bureaucratic process whenever they want to perform any changes to the payment strategy of their business. Because closed payments platforms do not expose configuration options to businesses, the process of enacting a change often involves requesting the change, explaining the change, and waiting for the change. Adding a new payment provider or eWallet can take a long time. Creating a new report and harvesting your business’s own payments data may be difficult, costly, or impossible. Modifying your payment routing can take a long time, and you may not even be privy to view your business’s behind-the-scenes configuration -- just because the closed payments platform is not equipped to display it to you.

Open payments platforms, on the other hand, allow you to create your own settings for your business. Usually, you’ll use a dashboard to add new payment providers, and to test these payment providers. You’ll be able to configure backup providers in case of downtime and block unwanted payments from entering your system. You’ll be able to use another dashboard to create your own payments routing schemes, and yet another dashboard to define and generate reports based on your data. The upside is that you have full visibility, control, and instant access to your payments’ scale, diversity and expansion. The downside is that it’s time-consuming, it’s a lot of responsibility and you have to know what you’re doing.

Better acceptance rates vs. simpler acquiring scheme

In the name of simplicity, closed payments platforms often offer only a single acquirer. This common fact is important to mention since credit card and debit card payments make up 70% of all online payments. 100% of credit and debit card payments are routed through an acquirer on their way to approval. In order for a payment to be approved, the acquirer has to approve the payment. And that’s where things become tricky. Different acquirers have different acceptance rates for different payment types. American acquirers, for instance, tend to approve more American-issued credit cards. European acquirers tend to approve more European-issued credit cards and reject other credit cards. And other acquirer biases exist, biases that relate to transaction amount, specific credit card BIN numbers, the reputability of your business in the acquirer’s eyes and so on.So if, for instance, you have chosen a closed payment provider who works with a single American acquirer, it means your European payments are subject to suffer high rejection rates. On the other hand, an open payment provider will usually offer a wide variety of acquiring banks. An open payments provider will allow you to decide which of your traffic to send to Acquirer A, and which of your traffic to send to Acquirer B. It will also give you the tools to analyze which of your acquirers is performing best for which transaction types. By optimizing credit and debit card traffic distribution between best-performing acquirers, online businesses can improve acceptance rates by dozens of percents. And for a hypergrowing business, even 1% of improvement can mean millions of dollars to your bottom line. A good question to ask here is: how diverse is my business? How globalized is my business or how globalized do I want it to become? Can my payment platform of choice support my international, diverse acquiring needs?

Freedom of tokenization vs. clunky provider migration

‍One of the most annoying and time-consuming steps of the checkout process is the credit card input step. As an online business, you are aware of the importance of the seamlessness of the checkout page. Ideally, you’d like the customer to input their credit card once -- just once -- and have it saved for all future purchases. But what happens to the credit card information when, behind the scenes, you migrate to a different payment provider or acquirer? Each payment provider or acquirer requires their own credit card token, which is an encrypted representation of a credit card in their systems. In case a closed payment platform does provide the option to work with multiple providers or acquirers, they haven’t always thought about the technical necessity of transferring credit card tokens from one provider to another. Because closed payments systems are often more clunky when it comes to accommodating change, they will often cause your end-users to re-input their credit card details when making a purchase through the newly added provider. This may not only cause your end-users additional hassle at the time of purchase, but may necessitate your developers to modify the code of your checkout page to accommodate specific types of returning customers. Because open payment platforms are naturally geared towards change, they have usually anticipated the issue of credit card token migration and have provided a technical solution for it. This means that for every new user that inputs a credit card in your store, the open payments platform will create a “universal token” that will prevent your end-users the hassle of re-inputting their credit card number after you’ve migrated from one payment provider to another.When selecting a payments platform, make sure to ask about tokenization to anticipate possible headaches and hassle. What scenarios will cause my end users to need to re-input their credit card numbers? Does my payments platform of choice offer a “universal token”? What are the implications of switching between payment providers (if doing so is even a possibility)? To learn how tokenization works at ZOOZ, check out our documentation. ‍

Custom analytics vs. no-hassle reporting

Because open payment platforms are designed with customizability in mind, they often come with powerful analytic capabilities and widespread reporting visibility. Open payment platforms don’t assume that they know businesses’ needs best; instead, they tend to offer a wide range of flexible data features that allow businesses to explore their data. Many payment platforms offer creative and wide-ranging access to your business’s payment data, allowing retrieval of the data via API requests and/or custom UI reporting. Sometimes they will also offer out-of-the-box analytic dashboards, but it’s not their focus or forte. ZOOZ, for instance, in addition to a basic dashboard of analytic presets, allows the creation of infinitely flexible customizable reports. You can view your data in any number of ways, according to a wide variety of variables: cardholder IP country, cardholder issuing country, BIN number, card brand, amount, transaction status, and literally dozens of other variables. You can even create reports that track custom variables that you submitted with your payments (if the customer is a VIP customer, for instance, you can send a VIP “tag” in their payment requests and then track VIP customers via the reporting features). You can invent any KPI imaginable and then track it precisely and effectively. And because you are in charge, the process is instantaneous and free.

The caveat: you need to know what you are looking for.

Closed payments platforms generally come with a limited number of reports out of the box. These reports typically include transaction number and transaction volume reports, and basic acceptance rate reports. You will be able to use a UI to search for specific transactions. The rest of report offerings vary widely from provider to provider. Sometimes, closed payments platforms will be able to generate custom reports for you. This will typically require manual work on the payment platform’s part, and can take a long time and cost a premium.Before choosing a payment provider, consider the following: What are my payment KPIs? What data points do they involve? What reports do I need to analyze this data? Does my payment provider allow me to generate these reports by myself? If not, can it be done on special order, and how much will it cost?

‍So should I opt for an open or closed platform?

Choosing a payment provider depends on your hypergrowth payment strategy. If you have a set payment strategy for the next few years, and you don’t have the personnel to optimize your payments on an ongoing basis or alternatively that your current business does not require juggling between a multitude of providers and payment methods, then you can opt for a closed payments platform that fulfills your current and projected needs. However, if your payment strategy is not set in stone, and you would like to accommodate a wide variety of globalization and diversification opportunities, consider an open payments platform. If you are a data-curious, data-driven company that recognizes the power of harnessing your company’s data to optimize your payments, then open payments platform will be your optimal solution. 

Payment Orchestration is a relatively new term, one that encompasses concepts that most merchants may already be familiar with. The term refers to all of the software systems and services that automate the coordination and management of business operations involved in authorizing, processing, and optimizing payments..

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Why Merchants Need a Payments Orchestration Solution

Payment stacks aren’t so straightforward anymore. They’re loaded with an increasing number of functionalities, components, and elements, which are making them less efficient at processing payments and more challenging to manage. They have grown more intricate and multifaceted in response to rising consumer demand for convenience and complexities in today’s payment ecosystem. With so many fragmented layers and a patchwork of software systems stacked on top of existing legacy infrastructures, current payment stacks have turned from an asset to a liability - they are simply not designed with enough flexibility, interoperability, or intelligence to keep up with the growing complexities of today’s payments ecosystem. 
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With so many fragmented layers and a patchwork of software systems stacked on top of existing legacy infrastructures, current payment stacks have turned from an asset to a liability - they are simply not designed with enough flexibility, interoperability, or intelligence to keep up with the growing complexities of today’s payments ecosystem.

If we take a look at the process of authorizations for example,  these have become far more complicated as the growth of cross-border transactions continues to snowball. Compliance with different regulations, card scheme standards, and combating fraud have also become harder. And that’s not to mention the difficulties in navigating a maze of processing costs and fees, the need to integrate and manage multiple local payment providers, methods, and currencies, are driving merchants to find the smartest, most efficient solution possible. 

Key Functionalities of Payment Orchestration

An advanced payments orchestration panel should have the following key functionalities, all consolidated into a single-layered architecture:

- Dynamic Transaction Routing

- Application Programming Interface (API)

- Advanced Analytics & Reporting

- Risk Management

Dynamic Transaction Routing

Dynamic transaction routing delivers merchants greater flexibility and control over their payment flows, which has several financial benefits. For example, when a decline occurs, merchants can switch to a second acquirer to obtain approval, reducing the rate of lost transactions and providing a better customer experience.

Dynamic transaction routing also makes it possible to switch transactions to another provider should a payment processor experience an outage. Routing also allows for better costs-saving, because merchants can set rules that dictate routing via the lowest cost provider.

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Application Programming Interface (API)

Payment orchestration panels are of vital importance to merchants with global operations who must work with multiple providers to deliver the best customer experience. In contrast to fragmented and multilayered payment architectures, adding new providers through an advanced orchestration panel does not require large amounts of time or money for complex integration processes. A well-architected payment orchestration panel is agnostic and brings more advanced capabilities to integrate new providers, methods, currencies at speed. It provides the flexibility to connect to a multitude of end-points through a single API, saving time, money, and also helping merchants move into new markets faster.

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Advanced Analytics & Reporting

Advanced payment orchestration panels can deliver deeper insights by providing access to real-time and consolidated payments data through dashboards, reporting, and alerts. With more advanced analytics, merchants will have better opportunities to optimize their payments and understand which areas need to be focused on to increase revenue. When it comes to reporting, merchants gain added capabilities to create and download cross provider reports based on business needs and compare and evaluate payment service provider performance. There should also exist the capacity to segment transaction reporting by business unit, and because transaction data is shared with acquirers, PSPs, banks, and other entities, merchants can use the data to build consolidated reports or make any number of custom reports.

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Risk Management

A well-architected payment orchestration panel should also offer functionalities to help merchants lower their operational costs and minimize exposure to the Payment Card Industry data (PCI) security standard. By providing a PCI compliant token vault to store sensitive payment data, an advanced payments orchestration panel reduces a merchants PCI scope, resulting in a lowering of compliance related expenses. A well-architected orchestration panel will also usually support multiple token formats and employ a universal standardized token which can be passed back to all merchants. Some orchestration panels will include their own purpose-built risk and fraud management tools as well, to aid merchants in their management of risk and keep customers secure across all channels.

What is the Right Payment Orchestration for You?

Merchants - especially those experiencing hyper-growth - have a growing need for a well-architected, and agnostic platform which will allow them to tackle difficulties in their online payments and most importantly  - to optimize their payments.

ZOOZ provides an open, and agnostic payment-platform, filled with tools to make the optimization process for merchants easier, and more flowing.

Thanks to the ability to connect to various providers via a single API, integration becomes a breeze. Tools such as the instant retry save merchants millions of dollars by allowing them literally save failed transactions, while the agnostic nature of the platform gives them transparency as for the cost of each and every one of their providers, as well as their performance over time. This smart, and data-filled overview, empowers our customers to  scale their payments easily, and see their bottom-line results immediately.

Contact ZOOZ today to try our payment orchestration platform for yourself.

E-commerce is booming globally, and it's only just the beginning. To support hyper-growth and ensure your company gets a bigger slice of the growing e-commerce pie, you’ll have no choice but to add new providers to your payments stack. And you'll need to do it continuously as you expand your operations and begin to serve new markets.

The Pros

Deliver your customers a better experience

Sustained hyper-growth on a global scale requires excellent customer experiences without exception. That's no easy task! At the core of every excellent customer experience lies a convenient, trusted, and fast payments process. With multiple payment gateways and providers, you can offer your customers their most popular and trusted local payment methods and currencies. You'll also be able to deliver a faster and less frustrating payments process as the use of local providers helps minimize declined transactions and latency times.

Optimize your payment flows

Different providers have different acceptance rates and charge varying fees for certain payment methods. By using multiple payment gateways and providers, you'll have the capability to reduce processing fees and use providers which offer higher acceptance rates for certain transactions to minimize declines. You'll also have several fallback options to ensure all transaction processing continues when providers experience failures or downtimes. During busy times with high payment volumes, this increased flexibility can save you millions of dollars in lost sales.

The Cons

Costly & slow provider integrations

Payment gateways have different integration processes with varying levels of complexity. To add new providers, you'll need to hire developers or keep an in-house development team to code each gateway and integrate it successfully inline with core business systems and requirements. You will also have to develop rules and implement a custom built transaction routing system to direct transactions to the appropriate gateway. Having to develop custom routing systems and integrate multiple payment gateways continually leads to a constant drain on resources and slows the time it takes to start selling in new markets.

Management & administration

The management and administrative requirements involved with each payment gateway don't end after integration. Vendor management is a significant and continuous challenge when using multiple payment gateways. With each addition comes a negotiation of contracts, a need to resolve any operational issues that emerge, and the ongoing management of relationships, all of which demands time and money.

Cumbersome account reconciliation

Merchants using multiple gateways and providers must reconcile deposits into their bank account to determine which gateway handled each transaction. The process of reconciliation is time-consuming and often prone to errors especially for merchants with high transaction volumes. For example, if a customer requests a refund, it can be difficult to establish where the original transaction processing occurred as there are several record sets to search. In contrast, merchants using a single unified payments infrastructure have only one place to look. Beyond these challenges, merchants may require multiple business accounts which cause further administrative demands as well.

Ongoing maintenance & development

Payment gateways need continuous support and often charge a monthly maintenance fee. When using multiple payment gateways, maintenance can become a drain on resources and even lead to lost sales as each gateway vendor will have varying standards when it comes to monitoring. There are also ongoing costs associated with development which are required for things like upgrades, adding new payment methods and other capabilities.

Low visibility & inferior analytics

Because data is siloed in different systems, merchants have no system-wide view of all payments activity. With no comprehensive view all payments data across your providers, it’s much harder to compare provider performance and understand what areas need to be optimized which ultimately leads to inferior business decisions. It also makes producing weekly, monthly, quarterly and annual payment activity reports more cumbersome.

Taking the pain out of managing multiple providers

The ability to rapidly integrate and partner with multiple gateways and providers is a necessity, not an option if you're a hyper-growth merchant operating on a global scale. But it's also a significant challenge to manage these providers if you don't have the right payments infrastructure.

You need a way to manage, optimize and track new providers once they’re up and running. What's needed is a unified, end-to-end payments solution that can help you organize your entire payments stack. A solution that can eliminate the cumbersome, inefficient, and costly processes associated with the integration and management of new providers but also optimize payment flows between these providers.

ZOOZ takes the pain out of managing multiple gateways and providers by letting you rapidly add, integrate, manage and optimize all your payments activities on a single platform. You’ll get to experience all the benefits of using multiple providers without having to devote valuable resources to integrate each one or deal with the management headaches that often arise. You'll also gain the capacity to optimize your payments by setting rules to dynamically route your transactions and be empowered to make better business decisions with access to an analytics dashboard that features all you payment KPIs in one place.

Congratulations!
‍After years of hard work, your company is finally growing like a weed, customers are flooding in and they are throwing money at you buying your products in volumes you have never seen before. Your growth parameters are exploding and your company has recently started to execute on its global expansion plans. Exciting times indeed! You and your team are responsible for maintaining and building one of the most crucial parts of the business: the company’s payment infrastructure. You are literally in charge of maintaining and supporting the lifeblood of the company.

Kudos! Managing your payment stack on a large scale can be a daunting task: the complexity of your payment stack is increasing exponentially. You are adding new vendors, new currencies and new payment methods on an (almost) daily basis. And avoiding vendor outages while keeping fees low and approval rates high with your current payment stack is starting to look like an impossible mission.
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This is probably the time to add a payment switch to your payment stack.
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So what is a payment switch?

A payment switch is dynamic, agnostic, simple, and smart by design. The payment switch is software that simplifies the challenges that hyper-growing companies meet in an increasingly global and complex e-commerce world. With a click, you get access to dozens of payment methods and payment providers around the world. The payment switch offers you a single unified dashboard for all of your payments activity, providing the highest level of control over your payments. The switch empowers you to dynamically route your payments to the best providers using custom rules to increase acceptance rates and lower fees.

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Faster time to any market.

The global payments market today uses 180 currencies, 320 payment methods, and a few thousands of payment providers across 195 countries, each with their own time-consuming integration. Let the payment switch help. By using a payment switch, you can save time and resources connecting to multiple payment providers through a single API. You can also gain a larger market share by supporting local payment providers and the most popular local payment methods, quickly and easily.

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Watch your approval rates skyrocket.

Payment declines can be a costly problem, especially for merchants seeking growth and global expansion into foreign markets. When a decline occurs, a payment switch enables merchants to automatically retry the transaction with a second acquirer to obtain approval. Congratulations! You’ve provided a better customer experience, made more sales, and saved time and $$$ by sparing your support team manual retries.

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Combat declines

Low approval rates are a costly problem. For your company, every fraction of lost payments means millions of dollars in lost revenue. The payment switch allows you to send your payments to the best provider possible, where decline rates are lowest for that particular payment type. Still declined? The payment switch has your back! When a decline occurs, the payment switch enables you to automatically retry the transaction with a second acquirer to obtain approval. Watch your declines shrink away as you raise your customer satisfaction -- and your bottom line.

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Save $$$ in processing fees.

One provider, two providers, three providers. Since your payment globalization, you’ve started to feel the burden of payment fees cutting into your profit margin. With the payment switch, you can send your payments to local payment providers and offer your customers local payment methods, to eliminate cross-border fees and currency exchange fees. The payment switch also helps you save on per-payment fees and global payment fees by sending your payments to the best, lowest-cost providers.

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Set custom rules to dynamically route your payments.

You know exactly what you need to run your business. Enter your rules into the payment switch, and let it do the rest. Want to route your USD transactions to one provider and your EUR providers to another? Want to experiment to see which providers perform better in which countries? We’ve got your back. With the payment switch, you can route transactions by card issuing country, card vendor, currency, customer scoring, acquirer fees, and you can retry declined transactions. Not satisfied with current payments performance? Make instantaneous adjustments with the click of a button

Gain deep insights with the best payments visibility there is.

No more looking at seven different provider dashboards to get a sense of your payment activity. With the payment switch, you can take an in-depth look at your entire payment activity in one consolidated analytics dashboard. Manage your payments more effectively and act on insights in real-time. Take a look at comprehensive analytics and granular insights, and optimize your payment processes accordingly. Are your VISA payments suffering a high decline rate? Easily understand why! With the payment switch placing all of your payment information at your fingertips, it becomes much easier to understand which areas of your business need to be focused on to increase revenue.

Avoid timeouts.

Payment provider outages are rare, but inevitable. When an outage occurs to your large scale payment operation it can cause a huge amount of damage (and losses) - to your bottom line, and to your customers.We’ve all been there -- one of the easiest ways to frustrate a customer is to have a slowdown or inability to process transactions at the time of payment. And your company almost always takes the blame for this even if a third party is at fault. Unfortunately, acquirer slowdowns or failures are most common during busy periods when payment processors are dealing with increased transaction volumes. Think Christmas or Black Friday, where short outages can cost thousands or even millions of dollars in sales. Thank the moon for payment switches! The ability of the payment switch to dynamically route transactions between different acquirers help merchants to easily respond to an acquirer slow-down or outage. When an outage occurs, transactions can be routed to a backup acquirer, to maintain consistent response times and avoid the possibility of prolonged time-outs.

Happier customers, happier you.