Can you give our readers some background on Zooz and its role within the payments industry?
Zooz is a technology company that provides a data-driven payments platform designed to help merchants meet the challenges of the evolving e-commerce ecosystem and constantly changing consumer expectations.
One of the major challenges merchants face today is change – they must accommodate developing market requirements to maintain a competitive edge. While technologies are released and updated all the time to ease these pains, integrating multiple technology providers can be a complex, time-consuming and costly process.
For example, as cross-border shopping becomes increasingly popular, customers want to pay in their local currency with regionally preferred payment methods, even when purchasing on a foreign website. To enable payment with a wide variety of global payment methods in different regions, the merchant has to individually integrate each payment device, credit card scheme and e-wallet, and ensure that every new technological system functions seamlessly alongside other integrations, such as tax calculators, fraud detectors and more.
Even if the merchant is able to manage all of the provider integrations, there is still a substantial risk that the cross-border payment will be rejected – whether because it is falsely flagged as fraudulent or because the payment provider processing the transaction is not optimized for accepting payments from certain regions. In most cases, merchants cannot even assess the true cause of a payment rejection, due to a lack of data transparency on the part of their providers. Merchants invest considerable time and resources into maintaining payments solutions, but are unable to improve performance because they are missing vital data analytics that would help them comprehend the reasons for declines, fraud, chargebacks and other problems.
Merchants can resolve all of these challenges by integrating the Zooz payments platform via a single API, which enables them to connect with multiple financial institutions; seamlessly integrate acquirers, e-wallets, alternative payment methods, fraud management and other third-party services; and intelligently route transactions to the optimal providers for accepting the payment. Zooz also consolidates and analyzes all payment data in order to provide valuable insights to merchants.
Zooz provides a comprehensive payments solution that empowers merchants to reduce decline rates, increase revenues and meet the challenges of the dynamic global market.
In your opinion, what are retailers doing wrong when it comes to an omni-channel strategy?
There is not yet a single concrete definition of omni-channel or consensus on what should be included in an omni-channel offering. The only thing that the industry agrees upon is that an omni-channel offering should create synergy between online and offline channels and purchases. The ability to provide this offering hinges on payments technology and data.
Merchants need to understand customer interactions at every shopping channel in order to engage them and encourage conversions. Knowing where and when a specific customer shops, as well as his/her preferred payment methods, enables the merchant to push personal, channel-specific offers and increase conversions at every touch point.
Additionally, through the secure storing of previously used payment methods with technology such as tokenization, payment across channels can become more frictionless. For example, if a customer pays online and the payment details are saved, that same customer can later visit the merchant’s brick-and-mortar store and enjoy faster checkout and a more personal touch.
As new commercial channels develop, the ability to acquire omni-channel recognition (as well as payment and data visibility) is becoming a crucial step in meeting consumer expectations. The main engagement channels are currently mobile, online and in-store, but social media and wearable devices are becoming important touchpoints for making payments as well, and there will certainly be other devices and channels in the future.
As e-commerce becomes more globalized by the day, fraud still remains a large concern for consumers. What tactics would you recommend that merchants take to help eliminate or reduce fraud concerns for their customers?
When it comes to preventing fraud, data is key. The more data that can be analyzed, the more accurately fraud can be detected and the less human interaction is needed to prevent fraud and reduce transaction declines. By proactively implementing data-driven risk assessment, fraud detection and transaction blocking protocols on an e-commerce site, merchants can significantly reduce chargeback impact and fraud.
One way merchants can detect and decline fraudulent charges is by defining rules based on static conditions, such as country of origin, the hour a transaction is made, or the amount of times a customer has tried to transact within a limited amount of time. Merchants can also create dynamic learning rules based on the shopping activity of each user, in order to detect anomalous behavior (ex. a user deviates from his/her usual IP address). Device fingerprinting is another great tool; this fraud detection parameter recognizes the device associated with previous purchases, and thus notices if a customer’s credentials are used to make a purchase on an unfamiliar machine.
In addition to different types of rule-based blocking and behavioral learning, fraud detection technology uses cross-network referencing, a protocol based on the logic that fraudulent activity observed in one merchant’s interactions can help protect other businesses using the same anti-fraud technology, even if they offer a completely different service and have a dissimilar customer base. Fraud detectors block transactions from accounts and credit cards that have been problematic for other merchants using the system.
To prevent fraud, merchants should use a combination of risk assessment and fraud detection protocols, including (but not restricted to) static rules, behavioral engines, device fingerprinting and cross-network referencing. However, not every fraud detector offers all of these features, which is why merchants might consider integrating more than one such detector. By implementing multiple fraud detection technologies, merchants can create intelligent rules to determine whether a transaction is fraudulent by cross-referencing the evaluations of multiple detectors and comparing risk assessments. Ultimately, this leads to more accurate fraud detection and fewer legitimate transactions declined.
For merchants who are considering enabling cross-border transactions, what recommendations would you give them?
Many merchants are eager to enable cross-border transactions and expand their online businesses globally. While it is becoming easier to offer cross-border e-commerce, there are still various hurdles, some more obvious than others, that must be overcome before pursuing new markets.
For instance, a major complexity that cross-border retailers face is regulatory compliance, as each country has its own laws, taxes, etc. Any online business attempting to expand its global reach must have the necessary knowledge to in order to operate and access payments in other countries and regions. To address this issue, merchants can hire an in-house team of experts per locality or integrate a regional payments provider to handle regulatory compliance for them.
Another risk faced by cross-border merchants is fraud, which increases markedly for international transactions. Merchants need intelligent fraud detectors that can assess each transaction based on factors like geo-location, payment method, buyer’s history and other data-driven parameters, and then determine whether a transaction is fraudulent without manual intervention. Fraud patterns and tendencies differ per region, so the chosen solutions need to account for the habits and nuances of each one. 3DS, for example, is an authentication measure in the checkout process that is standard for some countries, but completely unheard of in others. Whereas a consumer in the UK might not think twice about the 3DS stage of the checkout, a consumer in the US might be thrown off by it and abandon the shopping cart. The merchant has to strike a balance between effective cross-border security and the optimized customer experience.
Similar to fraud detectors, payment acceptance technologies tend to optimize domestic results, but cannot guarantee high approval rates in other regions. Merchants must understand that many of the customer transactions will be declined or mistakenly identified as fraud. Additionally, international payments processed through the merchant’s local payment provider often incur cross-border or currency conversion fees on top of the standard processing fees. To avoid these pitfalls, merchants should either work with local providers in the regions where they are active, or integrate solutions that offer connectivity to providers in multiple regions.
Many online consumers are hesitant to pay for purchases on a foreign website, but merchants can boost cross-border conversions and help customers feel secure by enabling payment with regionally preferred payment methods such as e-wallets and local credit cards schemes. For example, a merchant trying to appeal to customers in China, the Netherlands and Russia might offer the payment methods Alipay, iDeal and QIWI respectively to encourage conversions in each of these regions.
As the payments industry continues to evolve, what changes are you most excited about and most concerned about?
Mobile payments. We’ve been hearing for years that the mobile wallet is on the verge of replacing traditional payment methods, and while that’s not yet true in the United States, mobile payment technologies continue to develop and gain considerable traction in other parts of the world.
At this point, what most concerns mobile payments enthusiasts – and the factor that is most inhibiting adoption – is the lack of a centralized solution. There are too many mobile payment technologies, from Apple Pay, Android Pay and Samsung Pay to closed loop mobile wallets like Walmart’s. This leads to confusion amongst merchants and consumers alike. Merchants do not know which ones to accept, and are unwilling to undertake the complexity and expense of integrating every mobile payment system that develops. Similarly, consumers do not know where mobile payments are accepted or which mobile wallets to adopt in order to pay at their preferred stores.
I look forward to the development of a centralized mobile payment system that will eliminate this confusion and make mobile payments a realistic payment option of choice.
That being said, mobile will not be the only commercial channel to evolve in the coming years. At present, there are many channels developing to accommodate online shopping and payments, including wearable technology and social media. It will be exciting to see how mobile wallet innovations and emerging online payment channels change the face of the industry.