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A modern platform for the payments industry

Warren Hayashi,  Asia Pacific President for Adyen, speaks to Enterprise IT News about the modern platform for the payments industry.

EITN: Please advise, which part of the value chain, a solution provider like Adyen sits at. Can you list down the infrastructure/services you offer along the whole digital payment lifecycle, and which segment/audience that infrastructure/service addresses?

Warren: In most cases, businesses will have multiple providers to handle their gateway, fraud and acquiring services which means juggling different providers leading to business disruption, higher operational costs, and workflow inefficiencies.  The complexity grows exponentially for merchants if they enter multiple geographies and channels.

Adyen offers what we call a full stack solution, meaning we cover the payment flow end-to-end. The payment stays on the Adyen platform and does not flow through third party platforms.

In contrast, many other payment platform providers choose work with a variety of third-party platforms. This means that merchants have to manage several systems and vendors which takes time and money. Sometimes crucial data is lost at the intersection of these systems which might negatively impact the customer experience.

Adyen’s single platform approach means that we connect directly with Visa, MasterCard, and most other payment methods consumers prefer to use globally, and across multiple sales channels like online, mobile and in-store.  With this in place, Adyen enables merchants to reach higher conversion and authorization rates.

EITN: What exactly is an acquiring solution? Is that what a payment gateway offers? If not, what makes Adyen different?

Warren: An acquirer or acquiring bank is a financial institution which processes card transactions (credit and debit) and offers payment acceptance services for merchants. In short, it is the merchant’s bank. It sends purchase authorization requests via card schemes (like Visa and Mastercard) to the customer’s bank.

A gateway is an entirely different service. A gateway is a web-based equivalent of an in-store or point of sale payment terminal, adapting internet-based transactions so that they could be and funnelled into pre-existing payment processors

With Adyen’s built-for-purpose platform, all of a merchant’s transactions regardless of whether they have been performed in-store, online or in-app are consolidated into a single system. When you have one payment provider managing the payment flow end-to-end, it means that you can reduce fraud, increase authorization rates, and deliver an enhanced customer experience. It also means you have access to all payment data in a single space which helps provide a more holistic view of your shoppers and better inform loyalty programs.

Think of all the cross-channel experiences retailers are introducing – buy online and return in-store, buy online but pick up-in store, endless aisle. These can only be realized with a payments provider than can connect both online and in-store payments.

EITN: Within the Malaysian and regional payments landscape, whom are you in co-opetition and/or competition with?

Warren: Malaysia’s payments landscape is diverse and evolving – over 69 per cent of Malaysian are using cashless payment methods more often and moving away from cash due to convenience and wider acceptance of digital payments in the country. With Malaysia’s high Internet penetration rate – 80 per cent, more Malaysians are poised to use digital wallets in the near future, coupled with a robust e-commerce market value of more than RM17.14 billion, as reported by investment and financial services company J.P. Morgan last year. This is where Adyen provides unique value – our platform provides the seamless payment experiences and access to customer insights that both local and international merchants crave. With our acquiring capabilities now expanded to Malaysia, we foresee greater uptake among local merchants looking to expand regionally as well as with international brands looking to include Malaysia as part of their growth strategy.

EITN: What is a modern platform and what does it do better than traditional platforms?

Warren: What makes Adyen’s platform unique is that it connects directly to Visa, Mastercard and all key payment methods globally (for example Apple Pay and WeChat Pay) enabling business to accept payments across online, in-app, and in-store in all markets. With no third-party dependencies, this helps businesses to seamlessly accept payments, allowing for greater control over their overall payment process. For Malaysian merchants looking to go abroad, Adyen’s ability to seamlessly turn on their ability to accept payments in most currencies across the globe gives them to confidence to venture into new markets

EITN: Why is the Asia market fragmented right now? Isn’t competition good for the end user?

Warren: There is a cost to cash, and governments are encouraging their citizens to adopt cashless payments. Diversity in payments is relatively new to the Asian market and consumers are experimenting to see what mode of payment suits them best, offers the best value for their lifestyle and provides the best rewards. Many entrepreneurs have seen the potential of the Asian market and are looking to tap into this to build and grow their businesses – however for a wallet to survive in the long term, the key is to gain scale and a base of devoted users.

EITN: What are Adyen long-term plans for Malaysia? Whom do you partner with commercially and technically?

Warren: We continue to see potential for Malaysian merchants to go global and we are scaling up to assist them.  We work with a variety of partners including: all the global card schemes, local payment methods, and technology payment providers like Magento, Salesforce Commerce Cloud, BigCommerce.

EITN: What can consumers and businesses expect to see when Adyen solutions are implemented?

Warren: Typically, merchants will have multiple contracts with different acquiring banks in different countries. And if you are operating stores as well, you have additional technology and hardware providers required for point of sale payments. Managing all these separate relationships is time-consuming and inefficient. Additionally, all payment data is fragmented across different markets and channels. This causes friction in the customer experience. Not only are payments interrupted, but the overall experience is inconsistent across channels and regions. It is hard to build meaningful relationships with your shoppers and your customer, and retention suffers. Adyen removes this entire headache by managing the entire payment flow, including gateway, risk management, and acquiring, on a single platform.

With Adyen in place, merchants can look forward to higher authorization rates and better customer insights. The addition of local acquiring will allow merchants to leverage Adyen’s integrated platform to deliver unified commerce experiences regardless of where their customers prefer to pay – in-store, online or in-app.

By having just one partner to deal with, revenue reconciliation also becomes a breeze. With one view of all transactions from across all regions, channels, and payment methods, it will allow businesses to track their performance, spot trends, and get to know and reward loyal customers.