Managing Risk and Supporting Growth in the E-commerce Era

Treasury and Trade Solutions 10 3. Payments strategy For a D2C online business, confusing or difficult to navigate payment pages can increase abandoned cart rates and even inhibit repeat purchases. A best-in-class consumer experience provides seamless access to the payment methods relevant to the country of purchase. How integrated is your checkout experience? Checkout journeys that redirect a user away from an e-commerce site may increase risk of cart abandonment. Do you offer local currency pricing? This is particularly relevant when e-commerce activities expand internationally. Providing a customer with pricing in their preferred currency provides cost certainty to the buyer and decreases risk of cart abandonment. Do you offer relevant local payment methods? It is important to conduct a detailed assessment of the consumer payments landscape in each launch market to understand consumer payment preferences, which may differ from country to country. Treasury can call on its banking partners with local market presence and knowledge of the rapidly evolving payment landscape to gain insights to share with the business. Do you have access to local acquiring? For e-commerce businesses that sell to consumers in multiple countries, working with a PSP that has domestic (local) acquiring licenses for card payments can be highly beneficial — card transactions can be routed to the card networks (e.g. Visa, Mastercard) as a domestic transaction. This reduces the risk of transaction declines by the cardholder’s bank (issuing bank), achieves lower interchange costs and reduces settlement time for the merchant to receive funds. How do you mitigate fraudulent payments? Your online payments model should build in mitigants to combat fraud and improve security of payments. In Europe, the revised Payment Services Directive (PSD2) introduced Strong Customer Authentication (SCA) requirements that merchants and payment providers must adhere to for card and non-card transactions. It is key for merchants to work closely with their payment providers to implement a robust SCA solution that adheres to the regulatory requirements whilst minimising friction in the consumer’s checkout journey. Key considerations in accepting consumer payments When establishing a new D2C model, treasury should collaborate with the business and payments teams on the design of the consumer checkout and the end-to-end payment journey, to meet the dual objectives of optimising payment acceptance to grow sales while ensuring any downstream implications are properly managed. Questions to consider when deploying a D2C e-commerce payment model