Every on-line shop has to deal with the problem of choosing a payment processor. The success of any business can depend on whether they make the right choice. Maxpay CEO, Artem Timoshenko (www.maxpay.com) shares the secret to choosing a payment processes that can optimize sales and protect your business.
Artem, what are the main points a potential client should pay attention to while choosing a payment solution? What should they focus on?
Every online product has its own monetization model. It depends on a marketing funnel, target markets (US, Europe, Asia) as well as the regulatory systems of each country involved. It is important to use a comprehensive approach and consider all the features of a product before choosing. Merchants should start thinking about a payment solution while their product is still under development, as part of their marketing and business plans. Payment processors usually offer a basic range of tools, which can not help fully. It is important to perform a comprehensive analysis of the merchant’s business model and offer the most appropriate solution.
Tell us how it works in practice with real examples
We had a client, а big European company with a monthly turnover of over 10$ million. Theу had the following structure of customer’s payment traffic: the customer received 15% of their payments from the UK, 25% from France, 15% from Australia, and 45% from the US. One of the largest European banks was a purchases.
The initial payment conversion (payments made by a user via a special form on a service provider’s web-site) in the UK was 75%. But recurring payment conversions (payments processed without a cardholder or card owner) was only about 45%.
The refund level (refunds from a service provider) and chargebacks for UK’s traffic was up to 8-10%, which could cause problems with regulators.
The client also thought that there weren’t any problems with their payment conversion in France. But, they were only able to use a single French domestic payment system – Card Bancair. Access to the system helped to upgrade the merchant payment infrastructure.
US payment conversion in Europe had declined and was at 35-45%. This is partially due to regulatory policies and US legal restrictions that created additional barriers for European service providers.
We had to optimize the payment process, taking into account all the specific aspects of the client as well as the payment processing regulations of each country.
After optimization:
– The current payment amount in France has exceeded payments in the US.
– The UK optimization – conversion rate has increased by 10%.
– The US optimization – conversion rate has increased by 15%.
– The risk that a merchant account would be closed has decreased.
– Optimization has also helped avoid penalties from Visa and MasterCard for negative payment balances.
Within 6 months the company’s turnover has increased by 37%. Their marketing strategy and the geo-structure of the traffic has not changed. This result was achieved directly through our billing strategy optimization.
You talked about a larger company. What about medium-sized companies or startups?
Artem: The company size and its geographical location are not important. This comprehensive approach allows us to optimize online stores that are already in operation as well as startups to help them build more efficient businesses from scratch.
One of the biggest problems with online payments is fraud. Could you give us some advice on how businesses can protect themselves?
Artem: The total loss from fraud is nearly $100 Billion annually. This amount will grow to 120B by 2017. Instances of fraud and chargeback-operations not only cause financial losses, but more importantly, service providers can be put under sanctions from Visa or MasterCard or have their accounts closed.
Maxpay is an official partner of Qualys and Ethoca, leaders in information security and online fraud protection. The company has a PCI DSS 1 level certificate. By following the latest trends in the payment industry we have developed the anti-fraud system Covery. It checks each user according to more than 1000 characteristics such as location, sex, payment frequency, proxy server, anonymity, and the status of the device used to make the payment. It allows vendors to minimize fraud and scams.
About: Maxpay is a new payment platform created by a professional team with over 10 years experience in e-commerce. The service was launched in 2014. Today, Maxpay works with the largest purchasing banks in Europe, USA, Canada, Great Britain and Asia. The company has two data centers and in-house international staff in several offices around the world. This year Maxpay will receive a license to issue electronic currency in the EU. In 2017 the company will also receive membership with Visa and MasterCard. This will make Maxpay a complete online bank in the e-commerce segment.
