Design & Development

Payment Provider Seeks Simplification

The process of collecting and processing online payments is confusing. There are many parties involved and the fees can be difficult to decipher. Adyen is one company that hopes to clear up the process and to simplify payments from international customers, too. Peter Caparso is president of North America for Adyen, and he joined us to talk about the company.

Practical eCommerce: How does Adyen differ from other payment providers?

Peter Caparso: “If you look at the legacy payment providers that are out there today, a lot of them have platforms that have been in existence for 10 to 15 years. There’s certainly nothing wrong with them. They’re very functional. They can certainly handle the traffic quite well. But, we really think that there’s been a lapse of real innovation and creativity to be put back into the ecommerce arena. We see ourselves as a next generation payment provider. We’re really trying to focus in on innovation, real-time access so that our customer base of merchants can look at the data coming in, make educated decisions, and then alter or augment their ecommerce offerings.

“We give customers the ability to see how the actual traffic is trending in, where the transactional flow is coming. We also offer to customers the ability to either host a payment page or we can host the payment page. If we host it, they can actually control every facet of that page– every pixel, every color, good schematic.

“So, let’s say someone is rolling out a trial or a new title, they can roll out page A to a certain part of the country, page B to another part of the country, and really get the trend and the consumer analytic to see which page is trending better. We give our customers a view into how the traffic is going, who are buying, or where they’re coming from. We’re trying to give them as much information that we could capture to allow them to make educated decisions so they can shape their business moving forward.”

PeC: So, if Adyen is hosting the payment checkout process, would a merchant’s customers be redirected to another server?

Caparso: “Yes. We have skin technology, which customers could utilize, and they could have many variations of payment pages. They could have it by country, by product line–it’s extremely flexible. Again, this is assuming we host a payment page, but if the merchant wanted to host their own payment page, we can facilitate that as well.”

PeC: If Adyen is hosting the payment page, is it PCI (payment card industry) compliant?

Caparso: “Absolutely. PCI compliance is not going away and it’s only going to get larger and larger. If a merchant allows Adyen to host the payment page, we rid the merchant of that PCI compliance headache. We are compliant with PCI regulation. We are really seeing a movement in the marketplace today for consumers to kind of get away from that because that’s not their core business. It makes it a lot more convenient for them and lets them focus on their core business.”

PeC: If merchants have phone sales or walk-in traffic, would they still have other PCI requirements besides the services you’re providing?

Caparso: “We do have a variation that we call a call center where we can facilitate working with merchants taking orders over phone, which then the rep would enter it to an online web picture. But actual walk-in business, we’re not there yet. So, yes, there would still be some PCI [issues] from customers walking in, but anything handled on the web right now, we can greatly assist in reducing the PCI compliance.”

PeC: How does your redirect solution compare to Google Checkout?

Caparso: “Google Checkout can certainly can fit the bill for what a lot of your readers may be looking for. Here’s where I think we can absolutely help augment and enhance in regards to Google Checkout: Adyen is a global payment provider. So, we have worked with everything in North America. We are well versed in domestic payment efforts. If people are starting to look outside the boundaries and possibly looking to achieve more revenue or just expand their reach, we have a vast portfolio of predominant credit and debit payment offerings that are fully integrated into our solution. So, this is one big advantage.

“Google Checkout is very limited by its payment scope. We are integrated with a broader range of payment options (such as PayPal or Moneybookers, in addition to credit and debit offerings) compared to Google Checkout’s one payment option.

“The last thing is cost. From my familiarity with the cost of Google Checkout, we have a very simplified pricing model. We just charge our merchants a transactional price and a fixed amount on the [credit card] interchange. We’re very transparent in our cost and we’re also extremely flexible with our commitments. We only ask our customers to sign a one-year agreement and we do not require exclusivity. They should have the ability to leave at any time without liquidated damages or penalties. If for some reason it doesn’t work out, we wish them well. We don’t want to penalize them on the way out the door.”

PeC: If a U.S.-based merchant is selling internationally, say to Germany, how does your solution help the German consumer purchase products?

Caparso: In North America, the credit card is just the standard vehicle of payment. Germany is almost the inverse. I think the latest poll I read said 17 or 18 percent of the total population of Germany use a credit card for payment. So, if you rolled out to Germany only offering credit cards, you are leaving over 80 percent of the population without access to your product or service.

“We have the predominant payment methods in Germany. We’ve integrated into some of the largest banks there, which gives us access to the predominant credit and debit offerings as well as bank transfers. That’s really a value add that we could potentially offer to smaller merchants.

“We have the expertise. We’ve been building this for close to 12 years. We have this inherent knowledge, we have the relationships with a lot of these foreign banks that allow us to channel in and get the lowest rate, as well as to offer a portfolio of the significant payment methods.”

PeC: Would a German consumer see a different checkout than a North American consumer?

Caparso: “It depends on how the merchant would like to set it up. We can set it up to read the IP address coming in, and it could recognize it’s a German IP address and offer the native German payment method.”

PeC: Tell us a little bit more about Adyen.

Caparso: “The core team of Adyen came from a company called Bibit, an Amsterdam-based company formed in the late 1990s. It had a business model where it would integrate into the predominant European banks to offer the localized payment methods at the lowest rate. We executed on that business plan successfully to the point that in 2004, the Royal Bank of Scotland completely acquired us. I was not a founder; however, a lot of the founders decided to exit the business, and take a couple years off, and I ended up staying at RBS.

“Towards the middle to the end part of this past decade, a lot of us got back together and, just from staying in this business and hearing merchants saying, ‘We really want more transparency, more flexibility, and more access to the data,’ we decided there was still a lot of work to be done in this space.

“Adyen’s CEO, Pieter Van der Does, was the former EVP of global sales for Bibit; Arnout Schuijff who was the CTO of Bibit, is now the CTO of Adyen; and Roelant Prins, Adyen’s COO, was the former COO of Bibit; and I ran Bibit’s North American operations. So, we all got together and founded Adyen in December 2006. Our payment platform actually went live in mid-2007, and as of January 2010, the company has achieved profitability.”

PeC: Anything else on your mind for our readers?

Caparso: “We have gone through a tough time in the recession and people are really looking very carefully at their business and how to take it to the next step forward. I do think there are ways they can do that at not a high cost, and one of the ways to do that is absolutely globalization. I think by expanding your product reach and expanding your scope, you can reach a whole new marketplace and you can achieve revenues that you may not be realizing today.

“We pride ourselves on working with the small-to-medium-type customers to help them grow and make their business achieve. So, we see this as kind of a sweet spot, where we offer a real view into other traffic that’s trending, make educated decisions, and as we get on this road to recovery, reap higher revenues in the end.”

PEC Staff
PEC Staff
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