Payments as a Strategic Advantage

The world is changing fast and with it, the needs of customers. While some struggle to keep up and view the rapidly changing landscape as a threat, others like Warren Hayashi see it as an opportunity. Warren sees payments as a way to stay ahead of the technology curve, and more importantly, to meet the ever-evolving demands of customers. “With the right approach, payments can truly become a strategic advantage,” Warren tells us.

His experience in the payments sectors spans more than 15 years. First motivated by the opportunity to solve the obvious friction that retailers faced with the advent of ecommerce, and then again with the rise of mcommerce (mobile commerce) and omnichannel strategies, Warren was inducted as President of Adyen’s Asia Pacific business in 2015.

Photo courtesy of Warren Hayashi.

Adyen is a global multichannel payment company offering businesses an outsourced payment solution, enabling mid, large and enterprise e-commerce merchants to accept payments from anywhere in the world. Just a few of the big names Adyen has worked with includes Booking.com, Cathay Pacific, Dropbox, Groupon, Netflix, SoundCloud, Spotify, SurveyMonkey, and Uber.

Retaining customer loyalty

The Adyen payments platform provides businesses with a single solution to accept payments anywhere in the world. Built in-house, it is an end-to-end infrastructure connecting its clients directly to Visa, MasterCard, and 250 other payment methods (including Android Pay, Samsung Pay, Apple Pay), delivering frictionless payments across online, mobile, and in store.

“Regardless of the variety of industries and businesses we work with, we understand that a positive payments experience is essential to retain customer loyalty everywhere. In a world where commerce is global and shoppers expect the same experience across all touchpoints and geographies, Adyen’s ability to process transactions both online and in the physical world on one platform places us in a completely unique position,” says Warren with confidence.

His conviction is not unfounded, as Adyen processed over US$50 billion in transaction volumes in 2015, up from US$25 billion in 2014. Adyen also achieved revenue of US$350 million, a growth of more than 100 percent over 2014. To add, they recently launched MarketPay, a tailored solution for marketplaces that helps businesses transform payments from a cost center into a revenue generator. It even enables automated splitting of payments between sellers and commission bank accounts, accelerating payouts for all parties involved.

Challenges in the APAC region

When asked what unique challenges and complexities Adyen faces operating in the Asia Pacific region, Warren replies: “Asia is an extremely diverse market. In China for example, Alipay, UnionPay and Tenpay dominate, accounting for 80% of online payments. In Southeast Asia, methods such as ATM transfers and cash-on-delivery remain the most popular payment options, and credit card penetration is relatively low apart from Singapore.

“It is also worth noting that shoppers using cards to pay online generally have a higher level of discretionary spending and more awareness of international brands than the average local shopper. Despite these market-specific challenges, we believe that the most important thing is for retailers to build deep engagement with their consumers, based on quality experiences and trust.”

The building blocks of frictionless payments

Drawing from his extensive experience in payment processing, Warren compares the core building blocks of frictionless payments in a marketplace to merchants operating their own websites — the essential components being payment acceptance, mobile optimization, and protecting revenue. “A good place to start is understanding local preferences. Marketplaces should look for knowledgeable payment solution providers to advise them on individual markets, including the optimal mix of local payment methods,” explains Warren, who once said that "the checkout stage of the shopper journey is not the end, but the beginning of an ongoing relationship with the consumer.”

He also stresses the importance of mobile optimisation: “When a consumer registers their details, they are essentially registering an intent to become a repeat shopper. Marketplace operators should make the registration process as easy as possible. As mcommerce now accounts for 30% of global online purchases, mobile optimisation is an absolute must. Today many customers are accessing online sites via a mobile device, so a great place to start is in-app optimisation. This includes a seamless and fuss-free payment flow designed for small screens, and reducing the number of steps and fields to complete.

Photo credit: Adyen.

“With shoppers’ details on file, merchants can leverage technology like tokenization to enable one-click (or one-touch) checkouts. Shoppers benefit from a personalized experience and merchants will watch conversion rates soar. Lastly, marketplace operators should leverage data and technology to optimize the payment experience and get the best possible results for each transaction. This includes a targeted approach to fraud defense – maintaining the perfect balance between blocking fraud and keeping shopper friction to a minimum.”

The future of payments

Looking ahead, Warren sees the potential for enormous growth for ecommerce and mcommerce in emerging economies. “However, trust issues around the security of online and mobile payments persist, card penetration is low and methods such as cash on delivery still account for the bulk of online purchases,” he notes. In Southeast Asia, Adyen already supports a range of online banking, convenience store, and ATM payment methods, including Mandiri Clickpay, Gcash and Maybank2u, and in China, Alipay, TenPay and UnionPay.

As long as consumer needs and demands continue to evolve and change, innovation in payment processing will never cease, and Adyen will not stand still. “One of the most exciting innovations in payment technology is the zero-click transaction – which takes place in the background, without any action required by the customer. This helps brands fit seamlessly around the life of their customers and helps to deepen relationships.”

Adyen’s Berlin office. Photo credit: Adyen.

Warren adds: “Another exciting development is the level of optimization — now made available thanks to new payment rails — that bypass legacy systems to deliver the best results along the entire payment flow. With direct connections to the card schemes, merchants benefit from data insights into the reasons behind card refusals, which can be leveraged to adapt payment request and increase the chances of an approval. With a series of tiny adjustments merchants can expect incremental revenue gains – amounting to millions in some cases.

“Omnichannel payments has been around for a while, but it is still early days when it comes to the scope of its impact. By blurring the lines between sales channels, retailers can support a myriad of customer journeys, letting shoppers choose how, when and where they interact with their favorite brands. The benefits of bringing ecommerce shopping experience to in store shoppers, and unifying payment processes across sales channel and geographies are huge. This is a revolution for retailers offering new shopper experiences, driving new sales, streaming processes and costs.”