EyeForTravelv3bPayments

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Josep Bernat
The future of online payments
which solution is the best fit
for your company
TDS Europe 2014 - EyeForTravel London

© Nuk2 TDS Europe 2014 - EyeForTravel London
Josep Bernat has been the Chief Revenue Officer at vueling, clickair
and OdigeO for the last decade.
The responsibilities has been across different brands and
geographies:
• Pricing
• Product offering
• Payment methods
• Revenue protection
• Business analysis and business intelligence

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Holisitic payment strategy and its
elements
3 TDS Europe 2014 - EyeForTravel London
• It is based on four core building blocks:
– Business model
– Payment methods
– Controls
– Hygiene factors
• Payment strategy:
– Offer to the customers the widest range of appropriate payment
methods in a low cost, revenue earning environment.
– More specifically, accept numerous payment methods across
multiple channels, with optimized currency management,
inherent fraud and risk management, with centralized reporting,
consolidated data, in a compliant, low cost, reliable
environment.

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Improving the customer experience
• Online customers from US have different shopping preferences
than European ones. Furthermore, each of these large regions is
comprised of smaller regions who in turn exhibit additional
differences in shopping habits.
• As merchants we need to understand these preferences and how
they evolve.
• Ignoring these differences gives your competition an enormous
advantage.

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Improving the customer experience
• To deliver the ultimate localized experience depends on:
– Knowing who your visitors are
– Knowing which visitors are converting
– Offering local currencies
– Setting the right price
– Allowing preferred payment methods
– Localizing form fields
– Complying with tax issues

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Knowing who your visitors are
• It is not enough to know your traffic sources or the IP countries
– If the IP comes from the US, it does not mean that the customer
is an English speaker.
• Also is important when you are able to identify the customer.
– Device fingerprint or Cookies.
• What is the role of the customer?
– Data mining tools.
• Who is the best team to know customer behaviour?
– When was the last time they met with marketing team?

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Knowing which visitors are
converting
• By conversion we understand those customers that finally click the
purchase button.
• You need to determine the main characteristics that make a
customer to purchase. And how you can improve the value basket.
– Data mining tools
– Behavior analysis
– Cart abandoning
• Simple reporting as computing differences on conversion by
characteristics identifies opportunities to optimize conversion.

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Getting paid
• This is what it’s all about.
• What payment methods you wish to accept across what channels
and then sanity check of these against what you are selling via
each channel
– E.g. direct debit to purchase airline tickets
• Global credit cards
– They are key
– Flat fee, cost+ or cost++ model.
– The acceptance rate depends on country and acquiring entity.

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Getting paid – Push vs Pull
• Pull methods
– Are based on the seller “pulling” the funds
• Credit cards, debit cards, direct debits
– Fraud liability: The buyer will often retain some rights.
– Risk control
• Push methods
– Are initiated by the buyer who pushes the fund to the seller
• Online bank transfer, offline bank transfer, boletos
– The transaction may be non-refutable and guaranteed to the
seller.
– How to refund the customer?
– Drop rate of sales.
– Reconciliation and operational issues.

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Getting paid – Push vs Pull
• Customers prefer their own currency
– Customers spend most of the time using a single currency to
pay. US customers prefer prices in $, rather than €.
• Currency management
– Match the customer and inventory currencies
– The settlement currency is an issue
– The Dynamic Currency Conversion is an option for most of the
business
– Your own DCC conversion is also an option.
– FX risk protection also needs to be analyzed

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Offering local payment methods

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Offering local payment methods
• Confusion on payments are
bad for conversion but good
for revenue if surcharging is
allowed in the country.
• Payment methods need to be
offered depending on the
averse risk of the business
and a risk evaluation of the
customer and the
transaction.

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Complying with tax issues
• Taxes are presented in a variety of different ways depending on
which country buyers are from, and you need to present them in the
way buyers are get used.
• In US sales taxes are added to marketed price. The price will
increase when they arrive to the shopping cart.
• In Europe the VAT (valued added tax) is included with the marketed
price.

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Not to forget
• Revenue protection:
– Why revenue protection?
– The main objective of the department is:
• Not to keep the cost of fraud low.
• To keep the revenue maximized.
– The cost of fraud
– The cost of having a fraud system:
» The cost of the operational fraud
» The filtering cost:
• The sales lost because there is a fraud system in
place
• Keeping the revenue protection optimal is not about software is
about people and processes.

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Not to forget
• Reporting and reconciliation
– Centralized is a must
– Single source is good but impossible to have if you do not want
to miss revenue opportunities.
– Refunds is the main issue to solve, until you discover the
foreign exchange.

EyeForTravelv3bPayments

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