Adyen, the Amsterdam-based global payments company, has launched Adyen Global Acquiring in three more countries — Brazil, Hong Kong and Australia. It had already operated as an acquirer in Europe and the U.S. For merchants in those countries, this means they can process their payments locally through Adyen rather than deal with multiple third party acquirers in each region.
When the company began 10 years ago, it was more of a tech gateway, said Kamran Zaki, president of Adyen in North American. Now it has become a full fledged acquirer for Visa, Mastercard, Alipay and bank funding in Germany. The company processes payments predominantly for large enterprise merchants including Uber, KLM, Airbnb, Netflix, Evernote, Crocs and easyJet among them.
The company has strong appeal to companies operating internationally because it provides a local way of accepting payments in so many countries.
“One of the big pain points for large merchants is they would have to find partners in all these companies to accept payments from customers,” said Zaki. “When they have one contract with us, they can scale to all these countries and channels, from ecommerce to Point-of-Sale (POS).”
Take Netflix, an Adyen user, for example.
“They are in 190 markets and as they expand into new markets they would have to do cross-border payments or find partners in all these markets. But in this new model, they can partner with us and as they expand into new geographies it is a lot less work for them on their payments.”
“When a merchant works with a gateway and a transaction is denied, the merchants don’t really have insight into why it was actually denied, because gateways don’t really know what happens to the payment after it gets passed on,” explained a Adyen spokesperson. An acquirer like Adyen not only processes the payment but it is the one to pass it on, so it knows the exact reason a charge got denied and can often work with the merchant to fix it.
Digital companies, from Evernote to Netflix, often go global very quickly and need the ability to accept payments from around the world.
Adyen uses the latest technology and doesn’t have the legacy issues of older companies like Chase and Worldpay, Zaki said.
“We have built one system globally from the ground up and it is running all these payments across all the channels. No one else has done that because of their legacy needs and alliances. And it is hard to do — you need regulator approval in the local markets and you need the tech know-how of the payments in all these markets. No one else has this.”
US is more card-centric than Europe
Adyen is also helped being a Dutch company, added Zaki who is based, of course, in northern California
“In the U.S. we are so card centric, credit and debit for both ecommerce and POS, but in other parts of the world people are paying with cash or online banking systems. Things in the U.S. are built with card centricity in mind, while in Europe they have built to accept cards and other forms of payment.”
In Germany, consumers want to pay with debit cards, but since their debit cards are PIN-enabled, they don’t work in ecommerce. So many Germans use a two-factor online banking redirect model or direct debit where they provide their bank details to the merchant, he said.
Adyen fights fraud by focusing on the DNA of the shopper, he explained.
“Rather than just using a rules-based approach or common elements like address verification or CCD, we felt looking across the shopper’s IP address, her card number, channel and geography is more effective. If you have seen the credit card used across multiple accounts, or an IP address with too many geographies or credit card combinations, this shopper focus is a more powerful tool.”
Adyen doesn’t accept or reject a transaction — it passes its rating along to the merchant for the decision.
“Then it’s up to the merchant to decide whether to act on what the fraud system is showing them — ignore it, or review it. Our philosophy is that we are not going to guarantee to take it off your hands and manage all your fraud capabilities if you will pay us 5%. I can always back into a number that is good for me, but it might hurt your top line and customer experience. We work with merchant customers when they come on board to set parameters and iterate, but we always leave the end control in their hands to balance customer conversion against potential fraud losses, as long as they are within the card rules.”
Adyen is also getting into POS systems and expects to announce several large merchants as customers in December or January.
“We have all been talking about omni channel, but it’s tough for retailers to streamline and find one partner who can help the across ecommerce, POS and multiple geographies, especially if you look outside the U.S. and Europe. In big cities you might have 20 different partners you have to work with to pull this all together. We can make it seamless for them across these different channels.”
This article was written by Tom Groenfeldt from Forbes and was legally licensed through the NewsCred publisher network.