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Case study

The essential role of a comprehensive approach to payment processing optimisation

Thursday 27 April 2017 | 10:14 AM CET

Artem Tymoshenko, Maxpay: Payment processing requires a comprehensive approach in order to become an efficient tool to optimise sales

High payment conversion is essential to the success of any online merchant. However, simply picking the first payment processor you come across with might not be the best solution. To make an online product profitable, merchant needs to take into account the characteristics of the marketing funnel, target markets, and local regulatory systems. Naturally, the US market is different from the European and Asian markets. When choosing a payment solution, both the features of the online product and the features of the market need to be taken into account. This is the reason why it requires a comprehensive approach.

Choosing the right payment processor should be at the forefront when developing any e-business strategy and must be decided after the business plan and marketing strategy are being discussed.

Our comprehensive approach has been applied to an online bookstore offering both physical and online book (as well as magazines with monthly subscription), having turnover of more than USD 1 million per month. When we started working with the client, 45% of the payments they received came from the UK, 25% from France, and 15% from Australia and 15% from the UK. Considering that each of these countries has their own rules and regulations for card payments, we had to optimize each and every of their processes.

In the UK, the conversion of initial payments made by the user on the trader's website was 75%, while the conversion of ongoing recurring payments processed without the participation of the cardholder was 25%. Moreover, refunds and chargebacks were at 1-2%.

In France, the main issue was related to the payment system Card Bancair. Accessing it came with higher infrastructure costs, which led to a loss of profit.

What concerned the client most was the conversion rates for US payments in Europe. Conversions were at 35-45%. This low rate was due to the limitations of US banks and US regulatory policy.

After a thorough analysis of our client business structure, we proposed the following solutions:

1. Open a subsidiary legal entity in the US and in the UK to create a domestic triangle. This meant that the banks issuing the cards and the banks accepting the payments were within the same country.
2. In the US, we proposed that they open two more merchant accounts in order to balance, support and track conversion rates. We also advised them to change payment traffic routing within three months. As a result, conversion increased to 55%.
3. They also opened a merchant account with an US bank. This increased the conversion of recurring payments to 45%. This also meant that problems associated with VISA scrutinizing transactions was taken care of, since they were no longer performing cross-border transactions.
4. In France, we were able to allow them access to a local payment system without all the tedious red tape, due to Maxpay working with French banks for online acquiring for years.

The outcomes were:
• The volume of payments in France increased and overtook the volume of payments from US clients.
• Optimisation in the UK led to an increase of payment conversion to 10%.
• Optimisation in the US led to an increase of payment conversion to 15%.

As a result of implementing our solutions and optimising the billing system, the company`s sales grew to 37% in six months. What`s more, the optimisation did not affect the marketing strategy or the geostructure of the market. 

About Artem Tymoshenko

Artem Tymoshenko is the CEO Maxpay. With more than 10 years of experience in the payment industry, Artem Tymoshenko is involved in everything related to product development, decision making, marketing strategy, and other key policy issues.

 About Maxpay

Maxpay is an international payment platform with 32 banks/partners in USA, EU and Asia, as well as companies and partners from 49 jurisdictions. The service was launched in 2014 by a professional team with over 10 years experience in e-commerce. The company works with the largest acquirer banks in Europe, USA, Canada, Great Britain and Asia. Maxpay has a PCI DSS 1 V 3.1 certification and is an official partner of Qualys and Ethoca, leaders in the field of data security and anti-fraud protection. In 2017, Maxpay launched fraud prevention platform Covery and became the Signature member of Merchant Risk Council.

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