PCM Volume 2 - Issue 9: Beyond Borders, E-commerce in Today's Business World by PCN Magazine

P CM YOUR GATEWAY TO THE WORLD OF PAYMENTS

Vol 2. Issue 9 September 2016

BEYOND BORDERS E-COMMERCE IN TODAYâ&#x20AC;&#x2122;S BUSINESS WORLD

Welcome to Vol.2 - issue 9 Cross-border e-commerce is a great opportunity both for merchants and customers to expand the selling & buying experience. However, along with the advantages there are also challenges that companies have to face. This month we invited James Storie-Pugh, Director @Pivot, who gives a better understanding of the Cross-border e-commerce from various perspectives. Carrying on, Martin Schrimpff , Co-Founder of PayU, presents different insights into growing a successful business outside of home markets. Aleksander Kijek, VP of Operations @Nethone, talks about engaging Artificial Intelligence in the process of detecting and preventing fraud. Nikita Mishchenko, Head of Product Development @ECommPay, elaborates on the intensely competitive payments marketplace and points out conditions that needs to be fulfilled in order to meet the customerâ&#x20AC;&#x2122;s expectations. For our Startup Spotlight this month we interviewed Christian Tiessen, Co-Founder and Managing Director of Savedo, who gave us a picture of how the savings market looks like in Germany, The Netherlands and Austria. Finally, an overview of the hottest job openings we have at the moment. Feel like you need a change or looking for a job opportunity? Get in touch directly by clicking on the job. What better way to network and get to know your peers in the industry? Also, check out our premium event partners and make use of the discounts we have on offer before they run out! For any questions, suggestions, or concerns, please address them to the editors: Amir Abdin - amir@paymentsandcardsnetwork.com Duc Dang - duc@paymentsandcardsnetwork.com Joanna Bak - joanna@paymentsandcardsnetwork.com The Payments & Cards Network team wishes you good reading!

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Contents thoughtleaders

spotlight

4 19 7 14 STORIES 4

The secret to success in many high growth emerging markets is a local approach

Spotlight: Savedo

Hot Jobs

Events

â&#x20AC;&#x153;We will be the leading European savings platform, having brought together dozens of banks with customers from all across Europeâ&#x20AC;?.

Martin Schrimpff explains why merchants have to think local when adapting strategy to particular markets.

The cross-border challenge - How to leverage AI to go global like a pro? Merchants must overcome obstacles to successfully run an international business. When Artificial Intelligence comes in hand, various processes become seamless.

Innovation in Payments - an individual approach

Thinking beyond borders

The Payments industry is competitive, however there are certain rules to follow in order to keep the customers satisfied.

James Storie-Pugh gives a good understanding of Crossborder eCommerve from different perspectives.

Hand picked jobs of the month within the Payments and Fintech industry. Check out our hottest vacancies for this month and hit APPLY!

Stay up to date with the latest happenings in the industry and make use of our special promo codes!

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Thought Leaders Corner

by Martin Schrimpff

The secrets to success in many high growth emerging markets is a local approach

s companies look beyond their borders for new opportunities, they are often faced with an enticing opportunity to start selling online in emerging markets where the growth far outpaces what is happening at home. But succeeding in the developing world presents additional challenges regarding the comprehension of local cultures, trends and preferences. Merchants must be able to understand the local aspect and adapt their strategy for each market in order to achieve desired levels of success. This adaption to the strategy is what we refer to as taking a local approach. Itâ&#x20AC;&#x2122;s important to note that this approach does not always mean that the company has to have a legal local entity in each country. There are many instances where it is not necessary, depending on the country and what products or services are being sold.

In the world of e-commerce and online payments, four of the most important reasons to consider taking a local approach are to adapt to the specific consumer behaviours, offer alternative payment methods, use a local acquirer and manage fraud based on each marketâ&#x20AC;&#x2122;s trends.

Trends are also moving quickly in many markets to mobile purchases. The growth of mobile devices in markets such as India is astounding and they are expected to have the 2nd largest smartphone market by the end of 2016. We see that many whom cannot afford a personal computer do in fact

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Adapt and understand the trends and habits of consumers

Each market has consumers with unique preferences and behaviours when it comes to shopping online. Understanding the local consumer behaviours will help ensure that the way the merchant is planning to reach and sell to the local market will work. For example, the checkout process and information requested varies dramatically per country. In some markets, such as Colombia, consumers are accustomed to provide their national ID number, while in others, asking for this information would make the consumer uncomfortable. In addition, many consumers in these high growth markets do not have credit cards, which impacts how they buy online. I will dive further into this when discussing alternative payments.

own a smartphone. They may not have a data plan, but connect to Wi-Fi when available. These consumers expect and need a simple user experience while purchasing via a mobile device, from a responsive page to a streamlined checkout process where the minimal information is requested. 2.

Offer local and payment methods

alternative

In many of the high-growth emerging markets, the bank and credit card penetration rates are very different than what we see in Europe and the United States. While the credit card penetration rate varies by country, in many of the markets where PayU operates the credit card penetration is less than 50%. Many of the transactions we receive in these markets are made via local credit cards (not associated with an international franchise), debit cards, bank transfers, cash payments, cash on delivery, e-wallets and more. The preferred payment method varies by country. For example, in Poland, pay-by-link (bank transfers) are the most popular, while in Mexico, cash payments remain king and in Turkey, credit cards with instalments or loyalty point payments are preferred. Cash payments in Latin America

Thought Leaders Corner Martin Schrimpff Head of Global Sales & Co-Founder at PayU Martin Schrimpff is the Head of Global Sales and one of the cofounders of PayU. He is founder of six technology companies and has more than 14 years of experience in the payments and tech industry. Martin is responsible for supporting multinational merchants enter the markets where PayU operates.

continue to be a popular option and allow merchants to reach the entire market. The process, while not clear for people outside these markets, is quite simple. The consumer selects the item to purchase and in the checkout process, selects the cash payment option, then he receives a voucher with a code that he then takes to the local corner store where that cash payment method is accepted and pays in cash. The store then notifies PayU the payment has been made and we let the merchant know that they can dispatch the product or service. Credit card instalments are also very common in many of our markets including Latin America, Turkey, Romania and Poland. Instalments simply let the consumer pay for a purchase over a selected period of monthly payments. The concepts varies by country but many consumers select this option for purchases less than $10 USD and pay interest to their issuing bank over the course of the monthly payments. Some markets, such as Argentina are using instalments as promotions and the merchant and/or the issuing bank is covering the interest to entice purchases.

Use a local acquiring bank

By using a local acquiring bank rather than an international one, the merchant will see an improvement in their transaction approval rates. We have seen merchants in Brazil can increase their conversion rate by 50% by changing from an international acquiring bank to a local one. This is highly dependent on the rules and regulations the country has in place. As I mentioned before, instalments are highly popular among consumers and can only be offered through a local acquiring bank. In addition, local processors are able to work closely with these acquiring banks to improve the authorization rates for merchants and react quickly when there is see fraudulent action, something that is more difficult to achieve with an international acquiring bank.

Go local on fraud management

Online fraud and its behaviours can vary greatly market-to-market and is constantly evolving. Companies are always trying to remain one step ahead of the fraudsters, but they are constantly innovating and finding new ways to commit online fraud. We see that what works well in one market to detect fraud, might not work in another market. However, using a company that is local and understands what the local trends in fraudulent activities are will minimize the risk of fraud and maximize transaction approval rates. It is also important to have a connection to the local credit bureaus and databases to ensure the evaluation data is the most up-to-date and valid. A local company also can use their knowledge of the local market, such as shipping

We estimate that merchants can miss out on reaching more than 50% of the local consumers, if alternative payment methods are not offered.

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Thought Leaders Corner addresses within a city, and recognize when something is out of the norm. At PayU, we have in-house fraud systems that have been built and adjusted over the years with data from the local markets to ensure we are always one step ahead. We also share knowledge on trends in fraud in one market to ensure we are ready so that same fraud attempt is picked up by our antifraud tools in another market. In conclusion, there are great opportunities for growth and success outside of the home markets. In many of the emerging markets, e-commerce growth is more than 20% and that is projected to continue as more and more consumers come online. For merchants to succeed in many international opportunities, the main secret is that adapt their strategy to have a local approach. The e-commerce and payment ecosystem has many peculiarities from country to country and a â&#x20AC;&#x2DC;one size fits allâ&#x20AC;&#x2122; approach cannot be applied by merchants looking to expand into high growth markets. This localized strategy will allow merchants to capitalize on the opportunity and reach the entire market.

PayU PayU is a leading online payment service in 16 high growth markets across Africa and the Middle East, Central and Eastern Europe, India and Latin America. Our 250+ payment options enable safe transactions for more than 160,000 merchants, allowing them to focus on reaching the 2.3 billion consumers in our markets. For more information please visit http://corporate.payu.com

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Thought Leaders Corner

The cross-border challenge H ow t o l eve ra g e Artificial I n t e l l i g e n ce t o g o g l o b a l l i ke a p r o ? by Aleksander Kijek

The ability to sell to customers from all around the world, 24/7 is one of the greatest pros of online commerce. At the same time, global expansion brings a myriad of challenges merchants have to meet and obstacles they must overcome to successfully spread their wings. Firstly, they must thoroughly understand each market they want to enter. Secondly, they need to recognize diverse market-specific threats for their business and apply appropriate prevention measures. Finally, they have to keep up to date with each market they choose to operate on and adapt to the changing landscape in real time. Seems hard? Not necessarily, once you engage Artificial Intelligence and fuel it with human ingenuity. Understand your target markets using hard data For todayâ&#x20AC;&#x2122;s ecommerce, cross-border expansion means much more than just accepting payments from foreign customers and shipping to multiple countries. It means adjusting the overall shopping experience to the specific preferences of customers from various markets. It means learning about their shopping habits and preferred payment methods. It means figuring out how they interact with online content and delivering content they can truly enjoy. It finally means discerning typical online behaviour from possible fraud attempts to avoid false positives, as well as false negatives. In other words, cross-border expansion requires superb Business Intelligence.

Machine Learning and numerous data enrichment methods, most expansion-related questions can be answered in a blink of an eye, with great accuracy. There are insurmountable amounts of data available online. Every single user, consciously and unconsciously, provides plenty of information about themselves and their home market. The challenge is to find the right data sources (know where to search and how to get them), select appropriate analytical methods and find interdependencies between apparently irrelevant variables. This can be done by integrating with an advanced Business Intelligence solution like Nethone. It gathers over 3000 data points whenever someone enters the website or launches the mobile app integrated with the system. The number might be, of course, extended, if necessary. High quality data, however, is just one side of the coin. The other one is creation of customized Machine Learning models able to turn these myriads

The multiplicity of variables one should take into account when going cross-border is overwhelming. However, business analyses do not necessarily have to cost the earth and take weeks. Thanks to advanced

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Thought Leaders Corner oftentimes overestimate their experience-based insights and underestimate data-based ones, especially when those diverge from their well-established vision of the business landscape. A data-driven newcomer might, therefore, really surprise them. Identify threats and take prevention measures Once the expanding company learns as much as possible about its new target markets in positive sense, it is the right moment to take a closer look at threats, namely at market-specific types of fraud.

Aleksander Kijek VP of Operations Aleksander Kijek is a Python programmer and Linux enthusiast fascinated by FinTech and Neuroscience. At Nethone, he is responsible for business and product development, coordination of the workflow and assuring comprehensive operational excellence of the company. of data into accurate conclusions. This is where human ingenuity steps in. In order to create models that really do the job, one needs truly savvy data scientists and programmers who not only rock in their fields of expertise but also really understand business. Nethone team, for instance, consists of people whose experience has spanned a number of roles in diverse companies ranging from startups to corporations and each analytical project we carry out is preceded by extensive consultations with the merchant. Crossborder merchants need in-depth market research. It should be conducted through the use of right data and advanced Machine Learning. Those can be obtained and applied by the people who know how to use both to full extent. Data-based Insights significantly ease understanding of new markets and power up effective cross-border ecommerce. Data-based insights make it possible to not only smoothly go cross-border but also to outperform local competition. Companies strongly rooted in one market

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Operations carried out by fraudsters active on various markets are different. Although these differences are oftentimes very subtle, they might imply serious vulnerabilities. Anti-fraud rules and manual reviewing methods relatively effective on one market might be completely useless on another. Moreover, the accuracy of rule-based systems leaves much to be desired. This results in, so called, false positives - dropping of “healthy” users erroneously identified as fraudsters. For example, defining the use of VPN as a potential designate of fraud attempt might make sense as long as the merchant does not target Chinese market where connecting via VPN is very popular among legitimate users. How to overcome this obstacle? Once again, Artificial Intelligence brings the answer. Instead of creating static anti-fraud rules and applying labour intensive manual reviewing, merchants can nowadays prevent fraud automatically, in real time - by engaging antifraud Machine Learning models. Those, if properly configured, can identify even the most sophisticated fraud attempts without interfering with “healthy” traffic”, whatever the market. In effect, there is no need to employ new risk managers to secure the bottom line during the cross-border expansion. The job can be done by the company’s hitherto risk team supported by AI.

Thought Leaders Corner It is possible thanks to thousands of parameters being taken into account during each transaction verification and multiple supporting technologies engaged in the data gathering process. It must be emphasized that leveraging Machine Learning in many cases excludes the use of static rules. For their maximum effectiveness, fine-tuned models must learn as they go and their performance should not be curbed by static rules. Sure, it is the merchant who makes the final decision about allowing or dropping a transaction but they should allow the machine to provide as much insight as possible. Each red flag, therefore, should be followed by rich evidential data. Nethone considers every transaction as â&#x20AC;&#x153;healthyâ&#x20AC;?, unless it can prove a fraud attempt providing rich evidence to make the risk executive well informed about the transactions flow. In effect, fraud prevention does not lock sales anymore and stops being an Enigma. AI significantly boosts effectiveness of risk teams and helps cross-border merchants operate more cost efficiently. Adapt to the changing landscape in real time

Machine Learning models automatically adapt to the changing business landscape, recognize regularities and anomalies, become more and more effective with each new analysis being carried out. Moreover, through the use of Machine Learning, merchants can accurately predict trends and business indicators. Nethone users leverage the solution to anticipate LTV, MRR, Churn rate, expansion, contraction, and many more. In other words, merchants can go beyond adapting to the business landscape and actually form the landscape their competitors must cope with. Donâ&#x20AC;&#x2122;t miss your chance Artificial Intelligence conquers various fields of life and business these days. Autonomous cars are driven by machine taught algorithms, AI-based systems recognize particular individuals in pictures and intelligent chatbots provide excellent online customer service. What a waste would it be to miss the close to infinite range of opportunities that AI brings to online commerce? What a shame would it be not to use it to expand cross-border?

The world of online commerce is in flux and the pace of changes is astounding. Merchants selling their products cross-border, targeting multiple markets and fighting for diversified groups of customers, must always stay on the cutting edge. They must react to ongoing changes in real time and adapt their business to meet new challenges. Be it understanding of the rapidly evolving market or keeping one step ahead of fraudsters, the multiplicity of variables one needs to include in their ongoing analyses is overwhelming. Manual handling becomes counterproductive and even hardly possible. Happily, the essential feature of AI comes to the rescue.

Nethone Nethone provides AI-based Anti-fraud and Business Intelligence solutions for ecommerce companies of any size. The company was founded in 2015 by a team of experienced data scientists, risk managers and security specialists with rich merchant background to help online businesses turn threats and challenges into profits. Nethone operates globally, making commerce safe and prosperous.

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Thought Leaders Corner by Nikita Mishchenko

INNOVATION IN PAYMENTS – AN INDIVIDUAL APPROACH The payments industry is thriving. Companies providing payment processing on behalf of e-Commerce merchants are invigorated by the intensely competitive industry marketplace, introducing new solutions, products, services, and technologies with regularity. Adding sophisticated anti-fraud security measures, streamlined inter faces, blockchain technologies, and commercial websites adapted for mobile devices into their portfolio, payment service providers target new markets and an ever-expanding client base of e-Commerce professionals. Despite the staggering speed of technological innovation, e-Commerce merchants maintain a rigid set of basic requirements that they expect from their payment processers. International payment provider ECommPay has extensive experience in offering clients working within various e-Commerce industries an innovative, technologically advanced payment gateway – without compromising on the level of support received. In our experience, clients place the highest emphasis on the quality of service, followed by the opportunities of global expansion presented. Though the latest tools and technologies go a long way in meeting client expectations and keeping client businesses ahead of the curve, ECommPay’s 24-hour technical support and experienced account managers meet the demand for instantaneous, informed advice. In

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assigning each client to a single point of contact within the company, ECommPay ensures an intimate familiarity with the intricacies of each client’s business and industry. This approach guarantees that any payment processing queries are handled rapidly and accurately by our highly qualified team of payment professionals. ECommPay adheres to the belief that each client’s e-Commerce project poses a unique challenge demanding a flexible, adaptable, individual approach. Our “payments boutique” caters to the needs of merchant clients, implementing the necessary adjustments to existing products and technologies, as well as developing new ones, in order to make them ideally suited to clients’ business specifications and requirements. As client requests and preferences can often be industry specific, our personal client managers apply a wealth of industry knowledge and experience to solving client issues and promoting business growth.

Thought Leaders Corner To assist merchants in the second most important criterion of payment processing services, global commercial expansion opportunities, ECommPay offers more than 100 payment methods. As end-users in various geographical locations often prefer the local payment methods, e-Commerce companies hoping to tap into international markets must offer customers their payment system of choice. ECommPay facilitates merchant integration with China Union Pay in Asia and Boleto in Latin America, as well as many more regional systems across the globe. Our payment systems can be connected almost instantaneously for existing clients. An ECommPay personal client manager is dedicated to improving client business prospects. Regularly exploring the market and tracking changes within the payments industry, as well as trends within the clientâ&#x20AC;&#x2122;s own sphere of business, the account managers offer in-depth consultations to assist clients in selecting the payment systems most pertinent to their line of

work in specific locales. In addition, the products and services already selected and implemented within the clientâ&#x20AC;&#x2122;s payment processing model are reviewed frequently by payment experts to ensure that each e-Commerce client receives the most up-to-date solutions for profit maximization. The focus of e-Commerce professionals is often on improving and increasing conversion rates. As one of the most popular topics trending in the industry today, maintaining a high conversion rate is a requirement for any successful e-Commerce business. ECommPay has introduced a number of products and services targeting higher conversion and retention rates, including FraudStop, which lowers the risk of fraudulent transactions and the associated costs, the Conversion+ payment page, which can increase conversion up to 25% by implementing minor aesthetic changes based on psychological studies of consumer behaviour, adapted mobile payment pages, which appeal to m-Commerce consumers, and much more.

Thought Leaders Corner Nikita Mishchenko Head of Product Development at ECommPay

Possessing extensive experience running risk management projects and being responsible for the protection of transactional systems, accumulated whilst employed at leading Russian banks, Nikita Mishchenko joined the online payments industry in 2008. Now Head of Product Development at ECommPay, he leads the development of proprietary processing solutions offered to clients.

As the payments industry and the e-Commerce sphere more generally continues to grow and develop, new products enter the market and become obsolete quickly. ECommPay’s industry experience and technological know-how ensures that our portfolio of cutting edge, innovative tools and technologies are paired with solutions to the key client concerns – conversion, convenience, and customer support. Employing a highly qualified team of payment experts is rapidly becoming an integral feature of quality payment processing centres. With the growing amount of payment processors offering their services on the e-Commerce market for low rates, the future

development of the industry will be dependant on tailored, bespoke solutions and an individual approach to client services, leading to closer integration of personal client managers within merchants’ businesses.

ECommPay International payment services provider ECommPay’s innovative, highly sophisticated payment solutions combine reliability, intelligence and simplicity to ensure that clients worldwide achieve profit maximization. The quality of the company’s broad selection of products and services is exemplified by the company’s technological progress and worldwide recognition.

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CONSIDERING MRC MEMBERSHIP? Now is an ideal time to join and take advantage of exclusive MRC membership benefits. As an MRC member, not only do you have exclusive access to educational resources, tools and networking opportunities, but you are eligible to attend MRC’s member only, merchant focused Platinum Meeting, MRC Atlanta 2016.

JOIN NOW TO RECEIVE 1 YEAR OF MRC MEMBERSHIP AND 2 REGISTRATIONS TO MRC ATLANTA 2016 FOR ONLY $2,298

Designed specifically for fraud and payments professionals, our Platinum Meetings facilitate intimate conversation and information sharing. MRC Atlanta, October 10-12, allows you to solve challenges and develop critical business connections giving you a valuable edge over your competitors.

HURRY, DON’T MISS OUT ON THE MOST COMPELLING INDUSTRY EVENT THIS YEAR! For more details visit: events.merchantriskcouncil.org/atlanta/

expert interview

Thinking beyond borders e-commerce in the global marketplace In todays digital era consumersâ&#x20AC;&#x2122; accessibility for shopping cross-border has evolved immensely. For consumers shopping in foreign markets oftentimes involved high import duties, long delivery times as well as cumbersome return processes. However, on the other side of the coin there are many aspects merchants need to consider when they are looking to grow their online business in new markets. Therefore, PCM invited James Storie-Pugh, Director and co-founder at Pivot to discuss trends and developments within cross-border eCommerce. What exactly is Cross-border eCommerce and what is the idea behind it? Cross-border is very simply giving online consumers living outside your home market the opportunity to purchase your products. This is done primarily through an own branded website strategy with international fulfillment or a localized digital marketplace strategy - e.g., Newegg.com in the US or MarkVIP.com in the Middle East - or a combination of both. What factors fuel the Cross-border trend? The opportunity for incremental Revenue Streams Not looking to sell internationally is missing potential incremental streams and in doing so you reduce your trading exposure to any single market. The process is not as simple as leveraging a national online store however with the proliferation of high

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quality product specific marketplaces the first steps can be taken without limited capital expenditure and relatively low risk. UK brands hold a valuable cache internationally and initial success can be invested behind to grow long term business. Demand for Global brands Social Media has driven brand awareness to an unprecedented level and now demand for the most popular brands is coming from all over the globe. To be able to harness this demand a brand or retailer has to have a cross-border solution in place if not the competitor who does will take the sale. The global expansion of digital marketplaces 10 years ago the only options were Amazon and eBay however with over 200 major regional marketplaces trading quick and easy access to new consumer has never been easier. The existence of ground breaking fulfillment solutions Logistic capabilities, and the delivery timelines, that merchants are able to achieve are continually improving and again large regional differences exist. Customers in China, especially Tier 1 cities, will typically cancel an order if its not received within 1 week but customers in SE Asia will wait up to 3 weeks for an order in more remote locations as long as their expectations are set appropriately at the time of purchase. Countries like New Zealand are closer than you may think with cost efficient air freight meaning short delivery times of 3 days are achievable.

expert interview What should the companies be prepared for when expanding their products/services to the global marketplace? •

Deciding on your Domain strategy is a necessary step to take. Investing in a local .de or .cn Top Level Domain (TLD) will mean your site looks more trustworthy but it will mean you lose all of your domain authority built up in your .co.uk or .com website and will have to grow your new site up from scratch costing time and money. Consider Amazon currently operates 14 country specific TLD’s but in 2014 shipped to customers in 185 different countries.

Localization is an easy word to use but knowing which elements to focus on can be difficult. The fol-lowing areas are offered as those to focus on in order to improve conversion the most and generate new sales: •

•

Conversion rates can increase dramatically by offering the popular in-country payment methods for example Alipay in China or MultiBanco in Portugal. Consider as well Middle Eastern consumers will frequently (approx. 60%) pay Cash on Delivery (COD) giving rise to significant operational challenges. This lends weight to the marketplace option mentioned earlier as they support all the relevant payment methods including COD and are a high trust environment for consumers. Invest in your translation with the ROI firmly in mind. Google translate and similar services are an option but the results may not be acceptable. Focus paid translation on the key product descriptions and other high traffic areas of your site first with additional spend dependent on the incremental benefits. Don’t forget to translate your product URL’s as well to include strategic keywords in the directory structure or filename to improve your Search results. The levels of Customer Service both pre and post sale differs considerably across countries and having local support either on the phone or on live chat will increase conversion rates. The costs of supporting this element can easily grow beyond initial expectations especially in markets such as China that require considerable human support especially in the pre sale stage on the popular messaging apps Weibo and WeChat. Logistic capabilities and the delivery timelines that merchants are able to achieve is important and again large regional differences exist. Customers in China, especially Tier 1 cities, will typically cancel an order if its not received within 1 week but customers in SE Asia will wait up to 3 weeks for an order in more remote locations as long as their expectations are set appropriately at the time of purchase. Countries like New Zealand are closer than you may think with cost efficient air freight meaning short delivery times of 3 days are achievable. Intellectual property and trademark protection is an area that companies are always concerned about as the necessary steps are often complex, time consuming and the costs can mount up. Registering your trademarks with the UK Intellectual Property office (IPO) allows you to then

lodge your trademarks with the World Intellectual Property Organization (WIPO) covering up to 120 countries using the Madrid system. What are the main obstacles for retailers in developing a Cross-border business strategy? I feel there are 5 fundamental challenges that need to be considering when looking to optimize your international strategy: Payment methods and payment processing - Preferred payment mechanisms vary across the globe and therefore each new territory involves adopting the local preferred payment method whether it is Visa in Spain, Amex in the US or Cash on delivery in the Middle East. Logistics – Not only is the choice of carrier key to the safe arrival of your products but also the whole customer experience. A key consideration which could have steep financial impacts. Returns - It’s the question that always comes up and large regional fluctuations exist which will affect pricing. The highly competitive UK market offers free returns as standard but that is not the case across the world and in many countries the customer will bear the cost. Other options exist like some marketplaces will take on your returns for a lightly higher commission fee and many service providers are able to offer you a return warehouse in every country and will manage a local re-sale or return to UK depending on the economics. In-Market Customer Support – Localized customer support in terms of language and local culture are key drivers in customer retention and repeat purchase. A localized website with a customer service FAQ (translated into the local market’s language) will dramatically reduce customer service requests. Driving local brand awareness: Selling your products in a country where there is no domestic awareness is challenging and an assessment will be needed in terms of the marketing spend that can be committed and the on-going re-investment of revenue back into marketing on the back of successful trading.

This Month’s Expert James Storie-Pugh eCommerce Director

James brings 13+ years of international eCommerce experience from Li&Fung, Vente-Privee and Microsoft amongst others. Most recently he ran a €30m European eCommerce division of Global Brands Group (Li&Fung) and before that he co-founded an eCommerce consultancy in New York working with clients including Facebook, L’Oreal and Saatchi & Saatchi.

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expert interview What role does the payment industry play in making Crossborder eCommerce strategies successful? There are 4 major roles payment companies play in cross-border eCommerce: •

Offer local and alternative payment methods and acquire the best rates on a global level with greater transparency

•

Use a local acquiring bank to drive up local approval rates and therefore conversion rates

•

Target the risk of fraud and leverage in-house fraud systems built with date from local markets to minimalize fraudulent transactions

•

Fully understand the local trends and buying habits to ensure that your strategic plan to sell in a given region fits to how the local market works.

You are heading up a Cross-border eCommerce Agency. What is the role of Pivot in providing these services and what sets you apart from other agencies? Pivot has long term contractual relationships with several top tier marketplaces in the US and the Middle East recruiting new retailers and merchants to trade on these specific platforms. Working closely with these and many other marketplaces give us the insight and a direct pipeline into these regions which is valuable for many brands, retailers and re-sellers alike.

Pivot Pivot is an international eCommerce agency helping brands and retailers uncover, commercialize and optimize the most profitable international digital sales channels, marketing and branding opportunities. For more information please visit http://pivot-commerce.com

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MAXIMIZE YOUR DATA VALUE

CONNECTING YOU WITH THE PEOPLE TO POWER YOUR BUSINESS EFFICIENCY

Spotlight You think you have what it takes to start a business in a super-hot market? PCM takes a close look at some of the most innovative and promising startup companies in the payment industry.

startup Spotlight

“SAVEDO WILL BE THE LEADING EUROPEAN SAVINGS PLATFORM, HAVING BROUGHT TOGETHER DOZENS OF BANKS WITH CUSTOMERS FROM ALL ACROSS EUROPE.” Christian Tiessen, Co-Founder & Managing Director , Savedo GmbH

hristian had previously co-founded the online design store Casacanda. He sold it successfully to fab.com, where he continued to serve as Vice President of Merchandising Operations. This year, the 29-year old Tiessen was elected by the prestigious Forbes Magazine among the Top 30 under 30-year olds who have decisively shaped and influenced the financial sector over the past year. In our interview he introduces us to the company which is tailored to people with the desire to save money not only in their home countries but on the European scale. How did Savedo start and what is the idea behind it? We observed that the German market is one of the biggest savings markets in the world, with over €2 trillion in savings. At the same time we concluded that these trillions of euros receive little to no returns. Therefore, we started connecting German consumers with more high-yield saving products from other countries in the European Union, by creating an online marketplace. Thanks to the ease of our online platform, saving at the highest interest rates is as fast and unproblematic as possible. Our customer doesn’t have to hop from one bank account to another, they can open new deposits from just one Savedo savings account simultaneously. On the other hand, in accordance with EU-Directives, each EUmember state has a deposit guarantee scheme in place. This means that, like in their home-country, consumers’ deposits

are covered by a national deposit guarantee scheme up to € 100.000 per customer per bank no matter where in the EU the client deposits his savings. Starting Savedo, around May 2014, was a very exciting experience. Together with Dr. Steffen Wachenfeld and Jochen Siegert we started with only five people. First of all we had to find appropriate partner banks in different European countries and convince them of our business model. Then, of course we had to identify and to manage regulatory hurdles together with our German partner bank biw AG. But finally on December 4th 2014 we went live. By now we are offering close to 50 different products from seven banks all over Europe. Who are your target customers? Basically everyone who has stashed some money on his account over the years. The minimum investment sum with Savedo is € 5000. We are currently operating in three European markets – Germany, Austria and the Netherlands – expanding to other European countries has been on our agenda from day one. The goal is to become the largest European platform for retail investors. Currently our core target group are people in advanced age who have a good chunk of money on their bank accounts and a preference for more risk-averse financial products or want to diversify their financial portfolio. Eventually, we will address the needs of younger target groups as well.

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startup spotlight What’s your revenue model? Our partner banks pay us commissions for deposit capital brokered. At the same time, our service is completely free for the customer. What are you trying to achieve with your products and services offered? We want to let consumers discover retail banking products they didn’t know, but have more attractive financial propositions. We have a first-mover-advantage: Savedo is the very first international online financial marketplace to offer attractive savings products in Germany, the Netherlands and Austria. You can expect from us to add new kinds of retail banking products in the future. Furthermore, we strive to be a typical digital driven company. Savedo supports paperless processes, which makes investing in other countries for private customers very easy. Our portal offers online banking functionalities that allow customers to manage their bank accounts across multiple banks, at the same time guaranteeing highest safety and quality standards. Our portal also offers our foreign bank partners to enter new European markets and gain access to new customer segments. On our platform banks can list their products and customers can access these offers via one single Savedo-account. In the countries where we are active, we want to show we’re very involved. We speak to customers in their own language, we want to make it easy for them. Customer care is done by employees with the same mother tongue. All product offers,

application forms, and other documents are provided in one’s own language. What sets you apart from other organizations in the space? Other than similar players in the market, we don’t keep distance by only communicating in English. That means that the customer care, as well as our communication on the website and other online and offline media, is in the same language as the one our customers speak. Moreover, supporting the customer in avoiding double taxation can only be done with the localized approach that Savedo takes. Of course we have competitors offering similar services but … we have the technology. We have a constantly growing team of developers working permanently on more and better functionalities of our portal. We are convinced that this expertise will simply make the difference in the end. Where do you see Savedo in the next 5 years? Savedo will be the leading European savings platform, having brought together dozens of banks with customers from all across Europe. Any exciting news or announcements you would like to share with the community? There will be very attractive new savings products - that allow customers for more flexibility - on our platform very soon. Just stay tuned….

For more information about Savedo please visit the website https://www.savedo.de/ or click the here.

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jobs

Hot Jobs RISK CONSULTANT - ISSUING COMPLIANCE MANAGER

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Singapore

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Amsterdam | The Netherlands

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California | United States

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These are the latest job opportunities we have on offer! For more information please visit www.paymentsandcardsnetwork.com or check out our international Job Board at www.payment.jobs 021

events

Events Frankfurt, Germany FinTech meets Travel event looks at innovations at the intersection of travel and finance – from the point of view of travelers, travel managers or anyone handling travel arrangements within companies. As an invitation-only initiative run in collaboration with sector experts, it will bring together the most promising startups and “hidden champions” in this space with leading investors, financial institutions, and corporates.

New York, USA

13-14

With a three-way focus on optimising cash management operations, streamlining commercial payments and safeguarding the principal and yield of corporate liquidity and investments, Cash and Liquidity Optimization USA is where senior group and regional treasurers and corporate finance professionals gain unlimited access to bestof-breed use-uses, interactive roundtables and cutting-edge panel discussions.

Chicago, USA The theme of this year’s event will be Treasury Transformation in a Digital World. You will hear valuable business-focused presentations from SAP and industry thought leaders as well as case studies from high profile SAP customers, showcasing their approaches and highlighting lessons learned from their treasury transformation programs and SAP solution deployments.

Vienna, Austria

21-23

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MRC Vienna connects the top fraud, payments and risk experts from around the globe to learn, share, create and network unlike any other European event. Focused exclusively on merchants, attendees have the opportunity to participate in panel discussions, general sessions, networking events and so much more.

21-23

events

Kiev, Ukraine Bitcoin Conference Kiev is a unique conference oncryptocurrency designed to answer such questions as: what Bitcoin is, why it is needed and why Ukraine stands a good chance of becoming ideological center of the global Bitcoin community.

New York, USA

26 -27

The Mobile Banking & Payments 2016 Summit is a two-day event that brings together 150 mobile, digital, product, analytics and security executives at FIs to share best practices on building an exceptional mobile banking and payments strategy. Over 30 executives, that head up the digital strategy at their respective organizations will share on creating mobile experiences that provide ease of usage plus extra value through additional services.

Atlanta, USA MRC Atlanta offers the world’s leading fraud, risk and payments professionals a space to facilitate critical conversation, information sharing and learning. As a merchant focused, member exclusive event, MRC Atlanta 2016 will provide attendees with the most relevant tools, resources, education and networks to strengthen your skills and enrich your knowledge in this ever evolving and competitive industry.

20 % Discount Code: MPDGPS20

12 -13

10-12

Singapore

GlobalPaymentSummit is a strategic & pragmatic – for & by senior professionals – platform. GPS covers key trends in the payments and the transaction space. By exchanging the key trends, best practices and workable solutions, we deep-dive into topics and innovations affecting the business directions for the future. Special in-country features by local strategists provide in-depth insights. A true learning curve and networking with leading practitioners in the field.

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We value your feedback and ideas! If youâ&#x20AC;&#x2122;d like to discuss a specific topic, donâ&#x20AC;&#x2122;t hesitate to contact us. Get in touch today and maybe you will be featured in the next edition: Amsterdam Office Herengracht 576 1017 CJ Amsterdam The Netherlands Email: info@ paymentsandcardsnetwork.com Tel: +31 20 3030 257 Fax: +31 20 8208 295