Hey, folks. Nice to see everyone here. Morning or this evening wherever you may be. My name is Mary Rossberg, and I work at a company called Recurley. Recurley is a subscription billing platform with a ton of analytics and other value ads built in.
We work with some of the greatest brands in the world. We work with people like slang, like Univision, Twitch, pipe drive, barkbox, really our focus is direct to consumer.
So I'm happy to have this super interesting panel of three people who are experts in their field. They each bring a different perspective and I'd love for them to introduce themselves.
Prasana, you wanna start us off?
Sure. Good morning, everyone. My name is Prashanta Chaturgoaty, and I had the payments, everything related to the payments function for LinkTV.
We are one of the largest live OTT service provider in the US.
So my, my involvement with payments has been a long one. I started with banking, moved to retail, in store, and then slowly to e commerce.
And then obviously to subscription payments business.
And I am very fortunate to be involved with one of the oldest payments network in the world, which is the Zengen payment system, which is an intra bank payment, in Japan. And also the newest one, which is called UPI, the unified payments interface in India.
So I have been working in payments for quite long. And thank you, Mary, and Ricky for inviting me to this webinar.
Hi. My name is Sharon Rose. I am the director of recurring strategy at optimized payments.
And our goal is to provide, analytic and consulting services to merchants in in any vertical.
We want to, really focus on optimization of authorizations We wanna help merchants with interchange and fee analysis.
We provide guidance on different partner vendors that you should have or not have in your payment stack and really keep everyone abreast of, different trends in the payments landscape. Nice to be here.
Hi, everyone. My name is Simak Rosay Zada. I'm really super happy to be here. I'm a VP of Productmark and insights at a company called Go Cardless.
For those who don't know, Go Cardless is a is a payments company. We, focus on building the World Bank payment network what that really means is that we enable businesses to collect money directly from their customer's bank accounts rather than let's say via a digital wallet or via a card network you can pull money directly from people's bank accounts. And what that really means is, you know, saves you money, saves you time and, has a higher success rate amongst many other things as well. So we've been around for twelve or so years now.
I've been here for seven, and really what I focus on is trying to understand all what are the pains of our customers? What do they really care about? What do, you know, our potential customers care about? And then try and apply that to both our and go to market strategy so that we build the right things and talk about them in the right way.
So yeah, I've been doing this for for a while now. But even in my spare time, I've have a keen interest in history as well as payments. So I spend most most of the rest of my time reading about the history of payments, I've been using Bells to make trades back in a very, very long time ago through to, things like the, how and why we set up central banks through to kind of what my hold as well. So, yeah, I'm super excited to be here and, hopefully, share one or two of the things that I've learned along the way.
Do you vlog about that?
Sorry? Do you blog about that? The history of payments? No. No. Not yet. But a few people have said maybe that's something that I should take up in my in my spare time.
So perhaps perhaps over the next year, it might be something I get to? I think it'd be really, really interesting. It's a pretty geeky topic, but if you kept it lightweight and did, you know, sold herself. Hey.
I'm gonna blog maybe once a week, and it's only gonna be a paragraph, but just a quick little snippet. I I think you'd have readers. I would read it. Well, then well, then I've got my first subscriber then.
That that stuff. Exactly. We'll get the other panelists to subscribe as well just so you have a little a little audience to get going. Nice.
You're getting going. So we have a lot of topics to cover. As you can tell from these introductions, we've pulled together a panel of people from different parts of the payments ecosystem. And I think that's what's gonna make this such a rich, conversation.
So let's start with payments. Obviously payments are, pretty pivotal in when it comes to customer acquisition and retention. Right? The payment method, payment timing, payment everything really matters when it comes to acquisition and retention.
I'd love to hear from anyone on the panel, it's probably everybody on the panel, really, on what trends you're seeing around payment preference across subscribers as it relates to apposition or retention.
Cassandra, you wanna go first? Yeah. I can start. So and I will be talking more from perspective of a subscription payments merchant. So when you think about customer payment options, your customer payment options should be be derived from your, the demographics that you are trying to reach out to and also the the cost of your subscription.
And a combination of these two will determine whether you accept only three cards or you accept alternative payment matters. And there can be a bunch of those payment methods starting from, PayPal, Amazon, Pay Apple, Google. I mean, there's there is an infinite list of it. But if you are looking for your customer experience, it cannot really offer all of these.
No. None of the customer. It confuses the customer. If you provide them with a list of twenty payment options, then again, you have to work with on testing what really works for your or customer demographics, and the price point of your of your product.
Yeah.
Yeah.
Any thoughts there, Sharon, or Zimac?
I know we we've seen some trends this past year. And and see it really continuing, in the near term future.
One of the biggest trends that we saw this year across all of our merchants was the use of cash app. I don't know if some of the people on the call are familiar with that today. It's a very popular with some younger people and, the unbanked for some of our merchants. It literally became the number one card used. Above Chase, Wells Fargo Bank of America.
But because the account must be funded by the customer in advance. When you as the merchant go to kind of secure your payment and take money, There might not always be money there for you to take.
So the renewal rates are usually very low.
And then to kind of build on what, you're just saying, it has to work for your business. If it costs you a lot, let's say, to initially get a customer and you're relying on that long term, value down the road to recoup that. This is probably not a good payment method for you to accept. You probably would wanna maybe even, block it from being taken, for your merchants.
But if you're okay with just accepting it for the first time, taking what you can get, it is really widely being used.
The other things trend wise that we've been seeing is, for a lot of our merchants that are streaming, services.
More than fifty percent of their business now is all in app. It's just moving away from the web.
So this is really where you have to to be. People like using their phone, they're gonna view on their phone, they're gonna pay by their phone, so you wanna be there. And then also, in in addition to, other things that are happening, you'll you'll see that companies now are gonna fight for you to stay on their platform. So Google is gonna try to auto fill your payment information when you're on, a checkout page, which is fine for the customer.
It's very convenient. But what Google now is gonna do is they're gonna use a Google token, and you're gonna lose contact with the customer's, payment information. So if you are customer service where some of your metrics is on that to follow the customer. You don't wanna lose that touch point with them.
We also saw some news coming out about Amazon One where you can use palm to pay. Again, they just wanna make it so easy for you so convenient, but as a recurring merchant, it just might not be the best for you.
And then I'd say the other thing that we're seeing too is geographically, if you're an international merchant, you really would want the ability to have local acquiring, and accept local payment methods.
There's some countries where, you know, credit cards are not used. There are are local banking, solutions instead.
And once you take that on, you could really see your authorization rates increase upwards of twenty percent.
That's super helpful. Super interesting.
A question, on the cash out piece, when you talk about it being poor for renewal, and maybe just use it for sign up. Is that a scenario where you would see, a merchant saying, hey, you can use your cash out to sign up, but then you need to provide a and forth. No. No.
It's it's not that. It's it's more saying that if you're happy as merchant just to get that first transaction, and not really count on, you're gonna have downstream revenue. So it's not switching payment methods. It's just saying that there's really a much lower guarantee that you'll have subsequent payments be successful.
So maybe you target the sales that are one time. So for example, in an OTT world, if you have a pay per view, and it isn't tied to a subscription at all. It's just a one time, say, boxing match or whatever.
That might be one where you set it up where you are accepting CashA. Okay. That that's interesting.
So, Mike, any thoughts on, trends around payment acquisition, sorry, payment preferences for subscribers?
Yeah. Absolutely. I mean, we do quite a lot of research on on payer preferences, specifically around, what kind of payment methods do customers in payers in different scenarios actually want to pay with. Right?
So, we we look at things like, okay, if you're if you're trying to sign up to an online subscription service, which of these payment methods would you use? Which of these payments do you have access to and so on? And what you find is you start to see some really interesting trends touch on some of the points Sharon was definitely making that around. The amount of variation you see between, consumers and businesses but also then between, countries and then also between, even areas within countries and then within demographics as well.
Right? So you know, some, you know, really small examples, and and Sharon, you kind of touched on this, you start to see if you ask somebody, okay, you wanna sign up for an online subscription service, you know, something like, something, like, a media service or something.
What you start to see is, The the dominant payment method in in North America is absolutely a credit card. Right? Like, that's that's the one that, like, sixty percent of people are like, yeah, I wanna pay with that or seventy percent of people one way with that. If you ask that same question in the UK where where I am at the moment, it's actually quite quite meaningfully more balanced.
You'll start to see maybe twenty to thirty percent of people will say, yeah, I wouldn't wanna use my credit or debit card, then you'll start to see maybe twenty to thirty, maybe even forty percent of people say, actually, I wanna use my bank account, set it up on direct And you start to see maybe, like, ten, fifteen, twenty percent, people say I wanna use PayPal, then you'll see a kind of a long tail of other things as well. And if you go to somewhere like Germany, that kind of using your bank account is probably north of fifty percent, and credit card is, like, you know, below ten percent. I
was thinking there's, like, eighty percent in Germany for your bank account. It's it's style popular.
And so so you really need to be able to be aware of, first of all, those country trends, if you're if you're kind of operating in different places. And to kind of present this point, you know, not saying not just offering, you know, twenty, twenty five payment options in all of them, but going, okay, what are the top you know, three to five that are really gonna be the most important.
But then the the demographic kind of trend starts to get really interesting as well where you actually start to see quite meaningful shifts between, let's say, gen z, gen x, millennials, gen, so on where you start to see you know, people between the ages of eighty, even even in card heavy markets, you start to see people between the ages, let's say, eighteen and twenty four, have, you know, half the number of people who select cards versus people who are, you know, forty plus, for example. Right. So that kind of shift becomes, becomes really, really apparent.
And so, yeah, you have to kind of pay attention to to that as well. And then I guess the final piece is, you know, how much can you actually force and what we start to see as well as some quite interesting types of services. I think less on the consumer side, more on the business side where, you know, for a lot of your customers or businesses, well, to what degree can you dictate the terms of, okay, what you to pay this way because I want you to pay this way because, you know, ultimately, ultimately is kind of better for me downstream or something like that. And what we what we actually see as well, if you kind of do the math right on all those things, you know, we've seen customers who I mean, maybe this isn't new, but a lot of people are surprised when they see it, they're responding to payer preferences, but actually the total number of merchants that are acquiring all that payment page conversion go up as a result of adding incremental payment methods as well.
So they're not just -- Right. It's not cannibalism, but actual additional revenue. Yeah. Exactly. Which is, super interesting to see.
We've seen the same with a lot of our merchants after they added PayPal. It was really remarkable to see Really, not cannibalization, but just an up and to the right of more, more, more. Well, I mean, we we so so we actually do the same research of, like, what would you like to pay, but we flip it on head and say, you know, what would you absolutely not use? And you start to get some really interesting things where it's like, you know, even in the US, you start to see something like you know, five to ten percent of people say, I will not use a credit card to sign up for this service. So if that's the only thing on offer, then you're losing that percentage of people, basically.
Are you are you serving your your merchants that you work with around that topic or are the merchants serving their end customers around what would you not use? We're surveying payers. So our merchants and customers, we mentioned merchants and customers. Yeah. That's fascinating. That is fascinating. I bet we'd all be interested if you ever are interested in publishing the findings.
On his blog? I mean, real right?
What would you not use that? It is an interesting flip. Interesting. Isn't it? Yeah. Yeah.
Yeah. Yeah. I think they are sorry. It's very I I think there is one more thing that we probably should mention is buy now pay later.
Yeah. And that is getting some kind of traction. Like, when you are in a in a recurring subscription business that I mean, it does make sense when you have a high value item, but you can also look at different billing terms.
And you if as long as it makes sense for your customer, our adds value, customer sees a value in it. You can always bundle it. Okay. So it's a quarterly payment or a yearly payment or if it is event driven, that's also is alluring a lot of customers towards buy now pay later.
Yeah. I mean, buy now pay later for me, It's a catch phrase. And what I'm hearing more and more from customers is I want buy now pay later, and then we unpack it, and it and they really mean things like you're describing. I want a creative way to bill my customers in a different way, not classic BNPL.
You know what I mean? Like, it's not is not classic layaway program of old or anything like that. It's just how can I get more creative? But there are merchants even in the direct consumer space with low ticket items that are bringing up should I be offering by now pay later? And I guess I'm curious, what, let's let's try sharing what are your thoughts there on why a merchant with a low ticket item as their subscription would be interested in a buy now pay pay later. Is there is there like a a revenue risk shift or something like that that is driving that or if anyone wants to comment?
I mean, we don't We don't really see it that much in the subscription space just because the subscription itself usually is the incremental payment, whether it's monthly, it's it's kinda already broken, broken down.
But that just brings up a good point. You know, when you do hear things about, by now pay later, last year, I can tell you so many merchants came to me and said, should they should I be accepting crypto? And the answer is no. Should I be accepting crypto? Because people are gonna pay ten dollars in crypto.
So there's there's a lot of buzz about a lot of things and they're appropriate for certain products.
But they're just not appropriate for all.
Yeah.
Yeah. That makes sense. Let's move on to another topic around acquisition.
So when we think about customer acquisition, obviously the name of the game is frictionless.
Right? How do we keep that that experience as frictionless as possible, as seamless as possible, as user friendly as possible?
Can any of you talk about strategies that you see businesses using, whether it's your business or other businesses that are really focused on making that acquisition frictionless.
What do you think for Santa?
Yeah. I can start with it. So while in the acquisition flow, you mentioned what is the most important thing which is less friction.
And That's obviously important, but at the same time, you have to make sure that you are transparent and clear to the customer or in terms of what the customer is getting this month, next month, or the future billing subscriptions.
So make sure your terms and conditions are very clearly stated. Number one. Number two, they get the right payment options for that particular customer. We have discussed that in the previous, discussion.
So make sure that you offer them the most relevant one and take out everything that is not relevant for the customer to not to confuse them with multiple options. And then, also, we have seen a lot of differentiation in terms of customer conversion when you tell them up on what are the guardrails that they have. Like, you can cancel it. You can get a refund.
You can force the subscription or what are what important that the customer has got when they are subscribing. So because there is always a kind of anxiety. Oh, if I scribe, is this the right one for me? Right.
And they can reduce that barrier by offering or make it clear what are the options they have.
It's almost like Prasante, you're saying you're building your brand with the customer from the get go of acquisition. You're building trust. You're saying you know, there are ways to get out of this. We're not gonna make it difficult for you to leave. If you wanna pause, you can pause.
That that to me says I'm going to acquire you in a frictionless manner, and I'm gonna build brand and trust right from the get go so that you don't have to worry that of about who you're signing up with.
Right. You have to, get the customer trust. Yes. Yes.
I love that.
I think that, yeah, I mean, I I would agree with that. And I and I would almost, you know, go as far to say that I I don't think the name of the game is is frictionless. Right? I think the name of the game is is a balance between ease of use or convenience and safety and security on the other.
Right? I often think being like a a goldilocks zone in between that you need to be ease of frictionless enough, but then secure enough. And when we when we talk to payers and and consumers and and ask them, again, very similarly to, with preferences level, what makes you pick a payment method, what makes you not pick a payment method, and obviously a long list of things that people care about, but the the vast majority of people number one and number two all the time are in in sometimes in reverse order, but, like, our ease of use and security. Right?
Like, that those two, like, massively outweigh every else. And then you get a long tail of everything ending at rewards, like, that's always, like, the lowest thing. There's always top of people's minds. In in the in talk to people when you ask payers, like, what made you pick that?
It's rarely, like, a rewards or a points, kind of system. But you know, people care about security or perhaps the perception of security, but they care about feeling that they're what they're doing, what they're doing is secure and that, you know, it's as frictionless as possible. And so getting that goldilocks zone right, like figuring out, what are enough clicks and levels of security that people trust what I'm doing, but then, but then there's, you know, you're not making people input lots and lots of information, you know, you're not asking for scans of your passport and sending it across to, like, the, by post to the CEO's house to verify.
Like, obviously, that's well, but, like, is is not gonna get any conversion right through to, you know, hey, just, you know, tweet your bank account details to us and we'll charge them. Right? Like, obviously, that's super frictionless, but, like, not not not particularly, secure. Right?
So, like Great point. I think it's great. You need the two. Yeah. That's a great point.
East of Houston security. I like it. I I I think when I think of my own purchasing adventures, I don't even think about security because it's just so ingrained in me. I just don't click anything that doesn't secure, so it wouldn't have come top of mind to me, but you're right.
That's actually the foundation of of my buyer's journey for me.
I think it also depends on what you're buying. Like, if there was a, like you said, a one time fight that you're purchasing a streaming thing, then know, you want it to be quick. I wanna see it. I wanna see it now. I wanna pay for it. If you're signing up for an insurance policy, your expectation is you're gonna have to fill out a lot of information.
Your name and your address, you know, ZIP code, everything else. And, you know, as a merchant that can really benefit you on the back end with what you pay for interchange.
So you kind of have to weigh, getting the customers, enrolled upfront with certain costs how it affects you on the back end.
Yeah. That's a great point. I can't tell tell the number of, the number of times though I have tried to sign up for, like, a pay per view or is it a football match that I wanted to watch I just needed to sign up for service, and then they're asking me loads of payment information, where do I that I'm missing the start of the game. So, yeah. Exactly.
Exactly. Yeah. For those moments, that's when I'm really grateful there's Apple Pay because I just double click with my thumb and I'm done. And again, to your point sharing, it's on my phone. It's totally maybe the rational part of my brain just gets downplayed by the emotional part, and I ignore the security sides of things, just like whatever.
Absolutely. I've had that experience on eBay when I saw an amazing hat. I was like, Great.
Let's move on to renewals and retention. So there's obviously the payment preferences. There's acquisition. Once you've got the customer in, the the subscription economy is about that future revenue, about that renewal.
Let's talk about ways to encourage renewals, ways to encourage retention, essentially ways to reduce that involuntary churn.
Sharon, this this feels like a sweet spot for you because you have work so many customers over the years.
I I I think probably for the the merchants on the call, one of the biggest things just to know is that There is not one silver bullet that is gonna take care of all of your involuntary churn.
You have a lot of tools at your disposal as the recurring merchants, formerly provides a lot of those tools for you, whether it's something like an account updater to make sure that you have the most up to date information on your customers.
You just wanna chip away at any single thing that's in your power as a merchant to take care of. You wanna be there to to, have the charge when somebody has money in their accounts You want to, if you've exhausted all of your resources, you might wanna bring on a third party declined salvage vendor.
And like Prasante was saying, you also want to make sure that you are clear, and communicate with your customers.
You know, involuntary churn could really just be customers kind of ghosting you because they don't wanna deal with you, and they're hoping that you'll kind of go away.
So if you have, you know, a nice way to cancel, an easy way to cancel, like, a, like, Visa and Mastercard's mandate, that is very simple, then if it's voluntary, then you as an organization can turn around and and try to get them back with a win back strategy.
But if it's involuntary churn and you're just don't know what happened, then you you might be at a loss and you you might not know what next steps to take.
Yeah.
Good point.
Yeah. I am I'll add a little bit on that if you don't mind as well. The, I think, I mean, as as Sharon said, there's a lot of tools, right, available for for for a lot of this. I think a big part of of of, like, of what Go Carlas does to help, and, and, you know, I'll speak from the Go Carla's perspective here because it's the but I'm I'm most knowledgeable on in this area, but it can be applied in a few different ways.
Is how how how can you reduce the probability of payment fee? Alright? That's kinda like a starting point for for involuntary churn, and look, there's a there's a simple way of of of thinking about that is, like, there are many reasons why payments fail broadly, you know, the a bank thing because it's, you know, there's there's some risk involved that's been potentially identified the account can be closed, or there can be no money on account, and then there's a long tail of other things. Right?
Right. I think if you can if you can limit the first two Right? Like the probability of a bank saying, no, I don't fancy that, or a card provider saying, no, I don't fancy that, or the probability that, that the account is closed. Then you kind of you you cut out maybe sixty, seventy, eighty percent of potential failures.
And what you're left with is the bulk of which is I don't have enough money in the account. And then you can start to address those in in really particular ways. And so from a go cost perspective, we would always recommend If you're building the bank account directly, you kind of remove a lot of kind of card payment failures and card errors and so on. And, you know, maybe half or even reduced by sixty, seventy percent, the total number of failures, which then has a knock on effect on on your churn rates.
And then you can kind of focus on the some other tools. Right? So, okay, insufficient funds. Okay.
Well, what when can you predict when someone's gonna have some funds available. Right? Can you what kind of retry strategies do you have in place? You know, you can have relatively straightforward ones where it's like, call.
We try after three days, or you can start to, you know, leverage data that, you know, exists in across different platforms to go, okay, well, you know, CEMAC account we predict is gonna have money in in it on the fifth of September.
And Sharon's, we think, is gonna be on the fifteenth of September, and present is gonna be on the twenty fifth of September. So don't bother retrying those until those points, and then how and that will kind of help you optimize, the the the the the potential for for for actually being successful with that as well. So there's a bunch of tools available. I think it's really up to you to figure out, like, what actually is the root cause of things, and then I I understand as I chipping away at them bit by bit. You know what though? And and and part of of of of just to kind of answer that too is you need to have the data.
You need to have the data. You need to be able to slice and dice it. You need to understand what you're seeing, and you need to, get those codes, not all acquirers are created equal, not all provide the same information back to you as the merchants, And if certain things are, let's say, just put into generic categories, you might not know what's happening in your account.
So that's where it's key to have, like, the the right partners that can provide you with that information and do the analysis on that information as well? Yeah. I I think that that that point is is so key. Right?
Like, the the level of debt of information as well. Right? And and and it it not only means you can slice and dice and figure out your strategy, but your approach is gonna change completely right. Like, if you if you if if you get something that says, you know, this payment fails because they're out of funds, you're gonna respond in one way.
If they say this account this payment failed because the account was closed. Well, there's no point retrying the account's closed. Right? But you might respond in a way.
And I've even seen the level of debt for later, which is, you know, this is closed because the owner of the account passed away, which is a bit in some places. Right? Like, you the email or letter that you send as a result of that is very different to a you just think it's generically been closed, just for example. Right?
So, like, you you can start to be really kind of customer centric with your with your cons as well. You can also zero in. I mean, you might not know that you have a problem with one particular issuer. You know, if you're not really doing any type of in and else's, or you might not know that for some reason Mastercard is not working for you in Belgium.
You know, you you know, this is really where the information, comes back and to, in the long run. Yeah. And it probably, I would just like to chime in what you, sir, Sharon, and Samark, you guys have told And probably those, the time that have been involved in the payments industry. So I have seen payments being a line item on the P and L where it is, it it was a cost center.
And the sole focus was, oh, can I reduce my payment acceptance cost? And what do I do? I just negotiate with another processor, which charged me a little less. And from there, I can see where payments can be an enabler to reduce your involuntary churn to improve your customer conversion.
So the discussion is being changed now. And what is really driving the change is data.
So if I mean, I see payments right now is, I mean, definitely timing with the fintech thing and the tech part is growing. I see it is fifty percent about analyzing your data able to figure out what kind of strategy you are going to adopt for what kind of customer issue. And then twenty five percent is managing all those regulatory requirements.
And then the rest twenty five percent is trained on finding out how we can improve your customer experience in payments or there's a final stop for any customer before they purchase your goods.
Yeah.
Super interesting. The data, bringing up data, Sharon, it just really unleashed that that it pulled us all back to ah yes. The more data you have, the more you can analyze everything when it comes to acquisition and renewal.
And and I think a lot of merchants, they have departments, you know, to acquire new new customers. They'll spend a lot of money up front to acquire a new customer.
As part of doing business.
But if they paid a lot less, they could have saved them on the back end instead of, like, you know, instead of having to acquire us. I mean, obviously, you wanna keep getting new customers, but, Yeah. Yeah. Yeah.
I see that happening as well. I I think, when we work with merchants and we look at data that The more data you have, the better, to your point, that great example of, like, maybe it is one particular issue. Have you ever ever seen? Have you ever thought of that or Maybe it's Mastercard in Belgium.
Do you have the data to even see that?
And then it becomes, you know, who are your business partners if did you create an internal payments team to really dig into that sort of thing. Are you building that bench? Are you building bridges with your own data analytics team?
It's your data warehouse pulling in the right information so you can manipulate the data. Have you hired the right consultants that can help you with that kind of problem? There's many ways to tackle it. I'm coming all the way back to how you open Sharon with there's no silver bullet, and I totally laughed at that because Wow. Everyone wishes there was, really.
And and every vendor's gonna say that they are the silver bullet just for those listening. Gonna hear a lot of, like, I am the silver bullet. Don't worry. I got it. But it's, it's a quilt, if you will. It's it's it's complex. It is complex.
So let's talk about something that Prasanta brought up. So Prasanta, you mentioned regulations and compliance and all that good fun stuff. There it there has been a steady increase in regulations, whether it comes to, like, GDPR and privacy or other things like the mandates from different card companies around making it really clear that you can cancel, a subscription.
Let's talk about what businesses out there can do to to ensure that they're compliant.
And I'd love to hear from all three of you. Any one of you can start.
I can start, say, we have been or if you go back few years, down the compliance that was required from any merchant was to be compliant with the card branch rules which come came every one seventy six months.
Compared to it now, you have almost every state if I remember maybe and this number is changing on a daily basis. That is twenty states have got different requirements in the US that you have to comply if the customer is out staying living out of that state.
Then you have the card brand rules which has been change ever changing for more more frequently.
And then you come back even now we have a proposed rule set from, FTC, who is trying to come up with an overarching, but that is not going to override your state mandated or any other rules.
So you have to go look into your customer. And again, it comes back to data and comes back to the strategy.
How are you going to be compliant with all these rules? Most of these are, again, for subscription merchants, but anything are a part of that also covers e commerce as well.
I think you were talking about too, with the change, in regulation in India. I think it threw off every single one of my merchants could not do business in India.
That was a drastic change. I think people are slowly starting to recover and find ways and partners within India to help them.
But that's a a really great example of literally across the board. Every single person, every single company lost access to their subscription business immediately.
And it it's it's been taking a long time to get back up and running.
You know, for things like, you know, PCI compliance, a lot of merchants don't wanna take on that response, ability they would much rather have a third party provider that is compliant and have them deal with maintaining that because it is expensive than it is a heavy lift to make sure that you're always up to date.
I think the struggle, though, is Our listeners are probably aware that it's nasty business that things are changing radically and constantly and The struggle is how do we stay on top of it? Are what, what are companies doing to stay on top of it? Are they are they hiring internal?
Are are they creating their own internal legal team? Are they creating their own internal compliance team? Is that or is that part of a payments team charter to be looking at all these constantly changing regulations?
What are your thoughts there? What are you seeing?
So we are, eating up more bandwidth from our legal team. I mean, if you are picking up merchant, you will have an in house legal team. That's the greatest option. And Wing is definitely big enough for its own legal team.
Right. Right. And but if you are not, then definitely you need to reach out to someone who can help you in understanding those regulations and try to figure out how you tackle all of those regulatory things because there is no I mean, just not knowing the regulations are not going to immune new if I'm not compliant to it. So you have to comply to it. There is no other options.
So, yeah, we have been, fortunate enough to have an in house team and our payments team, we collaborate with our legal team. We bounce things each other with each other. If they hear something on the payment side or we hear something, we'll go back and clarify with them.
Oh.
And maybe it won't comment on the on the what should you do so much. I think I think presented that there is answer is pretty much perfectly accurate.
I think the the thing that I would maybe add on the regulation and compliance thing as well is that there are definitely opportunities as a result of regulation. Right? Like, as as well as it being something that's like, oh, you know, I've gotta now comply with this or I've now gotta comply with that. When I think about some of the regulation that's driven let's say the concept of open banking across Europe, I think that presents, you know, phenomenal opportunity for for businesses that's, you know, being mirrored in other places around the world as well, right, where, you know, the very fact that, we're taking, you know, the the the individual stores of value, right, like their bank account where all their money is, and ultimately their transactions are are detailed.
Well, however they choose to transact, whether that's, you know, Virro a wallet or via a card or directly with the bank account, being able to then not just have that as a closed garden list of, like, transact information, and balance information, but opening that up for businesses to be able to plug into and go, okay, this person signing up to my service, actually, you know, right now, they're using an account that doesn't have any money in it. Is this actually a real account? How's that gonna affect me later on? Or Oh, yeah.
This one has money in it. I can see the balance.
I can look into the account and go every every month. They get their salary paid in on the twenty fifth of the month or something like that. Therefore, I can have greater confidence that this is a real account that they own the account. It's not gonna cause me credit problems later on.
Like, being able to do those things, quickly and easily during the sign up process without really that much interaction with the payer or customer themselves, other than for them to authorize it, is a phenomenal opportunity to drive both better sign up experiences in the in the at the start of things and also then kind of a better kind of ongoing customer experience toward, you know, as as a relationship progresses, mostly driven in part well, in part driven by regulation, right, in lots of places Well, so I think there's there's there's definitely opportunities there from a from a from a regulation, regulation perspective that people should be are aware of and be looking into how they can best leverage it for for any pains that they may have in their business as well.
It it makes me think of a a question around bank transfers.
Are you seeing an uptick an overall trend in bank transfers being an accepted, a good form of payment for direct to consumer more and more. Is that is that an option for you in America for D2C?
I think it's an option, in general. Yes.
They're like, I I I I don't think for for for some of the kind of, you know, direct to consumer type of service. Again, it depends on the service.
There's there's a whole load of, you know, consumer more traditional businesses where it's it's already planned a pretty popular depending on which country or on which democratic demographic some of your, you know, some of your more traditional media, some of your more kind of, like, you know, gym subscriptions and things like that. This is pretty Yeah. Exactly. But then but then, when you're looking at more the more digital services, it's definitely growing, it, you know, pales in comparison in the US compared to, you know, people using their credit credit card to pay for these things.
But absolutely growing. And and already, you know, relatively relatively large in other places around the world. You know, I mean, as an example, you know, this is again kind of getting into the regional stuff and actually less less subscription based, but in somewhere like the Netherlands already, like, north of forty fifty percent of e commerce transactions come from the bank account directly via ideal, for example. So, like, again, people are starting to transact this way.
It just needs a critical mass in these people be getting used to that, and it needs, and in people kind of believing in the technology. And then also the technology being easy to use, and some of these kind of regulate making the technology easier to use if that makes sense. Yeah. It's helpful.
Super interesting. I think about fraud as well and, like, basically, identity theft, payments, information theft, all that, making the news more and more and more.
I think that's part of making consumers aware of that possibility and therefore a little bit more interest in a more secure payment method. So super interesting.
It wasn't that good. Sometimes for subs for subscriptions though. A lot of times it's a a push meaning that the consumer has to push it to you. So you as the merchant cannot go in, let's say it's the first of the month and you're going to bill. You you can't go in and and take the money. They have to push the money to you.
And then I think for, customers within the United states. I think that they do, you know, do want that sense of security that there's recourse if something happens. And once you push the money to a merchant, it's gone.
So if there's a problem with it, if there's something that you want it back, you It's very it's very difficult to to get that that money back. That's an interesting perspective. I've done a few charge backs in my day. So Yes.
I did. I know. It depends on the on how you see it. When you get on the phone and you say, look, I'm in payments, and this is going to be a chargeback conversation.
We're like, oh, no.
I do think it though depends how you set it up right. Like, totally Sharon. A lot of these, bank transfers penet methods are are push based, but you can you can link pretty easily to, the various debit systems that that exist, like, you know, ACH debit in in the US or back start debit in the UK and pre authorized debit in Canada, for example, which are a much more pool based Right? Like, there's no authorization required.
There's no push required from the customer. It's very much just like set it up and the merchant can pull the funds. And then there are respective chargeback regimes in place that are very depending on the on the jurisdiction and so on, like, in depends on, like, the length of time you can do it for, but, like, it's it's definitely, something you can work with. But it depends how you want to have a session just on that.
At some point.
I would love that. I wanted to practice something. Sorry. I said I don't know how many people would watch, but yeah.
I mean, it's like your blog. You gotta grow your audience. Right? Let's start with us three and then soon the world.
I'm gonna come back to something that Prasanta said around it's fifty percent technology now. And it's been a journey really for the payments industry.
What role does technology play? Like, when it comes to really securing subscription payments, tell tell us a little bit more around technology because it's a it's obviously a hot topic for me on a regular basis with merchants.
Sharon, can you talk a little bit about that?
About technology?
Yeah. About the role that technology plays in securing subscription payment process. So when I think of technology, it's sort of the pop the hood and go nitty gritty. So things like tokenization.
Where are we going with tokenization and what role does that play in making subscription payments more fluid, more likely to be successful, less fraud.
And and and and that is a good example.
You know, we do know that, when tokens are used, it is that first step towards, just protecting, the pan.
And now I'm sure, the merchants on the call have heard of the use of network tokens, that's bringing it to a whole another level.
This is saying that the tokens are going to be provisioned come, you know, visa, Mastercard, that added level of safety has caused a lift in authorization rates for merchants because they believe it's that one little bit more, to protect against, the the cards being stolen.
Yeah. Prasante, any thoughts there? Yeah. From a merchant perspective, it gets it is getting really complicated.
And from the technology I mean, I come from a technology background. So I really am biased on technology.
The But the problem that comes when you are wearing a merchant hat is, firstly, figuring out how do you do this tokenization? What is the options that you am. And it is very difficult for if you are a midsized or smaller one, do not have enough bandwidth in the within your payments team to do this analysis.
So first, you have to figure out what do you do? Do you take and process a token or you take network token who keeps it and how do you do it? What happens Can can you measure each organization really giving you the additional success that you would expect it to give? Or is it was it better with Penn? Now it's difficult for a merchant to make sure that they get to know all of these options and choose the best one.
So maybe you need to go ahead and look for as partners in the case who can help you in making the right choice.
And same sorry. It's literally not exactly for tokenization, but when you talk about technology, You are also thinking about the other piece where your payment, depending on what kind of business you are, your payment has to be up twenty four by seven If you're a global merchant, it's more so. So that's number one. Number two is how are you securing? Like, if you if you're not on tokens, who is managing or who is keeping your PII or PCI information.
That you are being compliant with all these roles. And can you trust them? That's that's a very big question.
Floats in my any merchants brain whenever they think about technology.
Also, the technology could work against you because the fraudsters use it every day, every minute.
Of hiding their location of of signing up with a million cars, of card testing, So if there's any new way to secure your system, they're gonna try to do it. And once you put one thing in place, they're just gonna go around it and find another way to get in there.
It's true. Yeah. It's it's a whack a mole kind of situation where you just chase these people they are becoming more and more creative in finding out more, more places where they can intrude into your systems or even in your payments, journey?
They'll try to get directed, like, through an API call. It's not even just at the checkout page. There's a lot of ways to get them.
Yeah.
Yeah. That's true. I think in that respect, as well, like, maybe one of the areas of technology that I think, that is playing a a growing role. I don't know, maybe maybe he's been big for a long time, but I think he's definitely growing.
Is, and back to our point on data and and we'll specifically the the application of machine learning to that data to make a lot of these predictions. Right? So, like, you can you can you can let the black box kind of spark as much of this as you can, but I think more importantly as well, you can start to do some really interesting things with that goldilocks zone, right, where you if you if you are seeing a potential customer or payer who, you know, the black box of machine learning spits out and says, hey, this person is slightly more risky. You can take certain steps and certain actions, whereas if it's hey, we actually think that we're pretty confident that this is a real person making a real transaction when it's genuinely signed up, then make it really easy for that person because you've gotta a highly group of confidence that they're that they're, you know, a legitimate customer.
And I think that use of machine learning in that space is is really quite clever, both from a anti fraud perspective, but also then from a, you know, payment recovery perspective when, you know, payments go wrong for, you know, insufficient funds or other things as well. You can start to have really customer centric approaches to your kind of recovery, processes too.
I like that. Super helpful.
We're coming up on time here. I wanted to wrap up and ask each of you to just share what you're excited about in the future of payments.
I I personally just wanted to say I love it that people are paying more attention to payments.
I when I meet a lot of merchants, the person at the company that's working in payments just got assigned to it. They don't even, like, get hired as a payment person. It just fell in their lap or somebody used to do it, and they left. And now I'm in charge of it, and I don't know what I'm doing. So I'm I'm just I'm just glad to see that it's it's standing on its own as, a big contributor to the organization, not just as a cost, but there are, you know, how your business is doing.
You can proactively, you know, go out there, save money. There there are best practices on on how to the things, and it is something that has to be cared for and managed all the time.
Don't just get your one invoice at the end of the month saying this is your processing fees. And that's it. That's your whole payment strategy. Yeah. It's really standing on its own.
As, something that should be, looked into.
I'm excited about that too. Yep.
And I'll probably go with that cliched word, being artificial intelligence or machine learning, please. I think that will be a big disaster. So my question is can I figure out that, okay, Simaq is more, likely to pay me next month? He's he has missed his payment this month on the day, but can I just give him five more extra days?
Because he has generally paid. And Prasanta is not going to pay us for whatever reason, and he has been in that space for a few more times. I'm I'm probably simplifying it. There are maybe hundreds of different parameters that you need to think about.
When you are trying to figure out what is a customer's propensity to pay you next month being a subscription merchant. That should be the biggest thing that you come to understand.
And, again, I'm worried about that black box thinking. Like, can I just ask, you know, black box saying, okay, Simaq is your good customer giving five days more? Prashanti is not, so cut him off as soon as he fails his payment.
Right. So those are and also the usage of the same kind of tools for defrauding you.
That's So fraudsters will definitely be the cost of, the cost of computation has come down to a limit where they can definitely leverage these technology and try to be a legit customer of yours and defraud you.
It's it's both good and bad. Have to be able to figure out.
Yeah. I mean, AI going beyond machine learning. When I think of machine learning, I think about, you know, retry logic around soft declines because of the world that I live. And that that's where I go first.
But you're talking about that well beyond that. Well beyond that to to the level of detail that you're describing. Yeah. Super fascinating.
Samad? I don't think I can do better than either those answers. They're super impressive, but, I think, I think what our probably, maybe build on it is is maybe take us back to the start with, with, by extending pro presenter's answer and and say, well, when you've got the applying machine learning to the sign up process as well. Right? And go, okay. Well, there are there are twenty five different options, and I'm statically gonna say here are the best three to represent in in the US. We'll actually hear the hear the three best that I think Mary is gonna be most likely to use and I'll present And I think when you start to have that kind of dynamic ability to adapt your your your processes right from the very start right through to the end, I think, that's when you could do some really, really cool stuff and and and not miss out on any customers.
Yeah. We're definitely getting there. I'd like step by step, personalization, and and what feels like a automated way.
It's it's coming for us whether we want it or not. So great. Well, thank you guys so much for your time this morning.
Great conversations, and, we hope our audience enjoyed it as well. Thank you.
