Payments have come a long way, that can’t be understated enough.
In 2024, merchants, retailers, social media apps, you name it; they now all have the capacity to integrate payment solutions designed to meet the increasingly more demanding needs of the customer.
This is in large part thanks to the introduction of embedded payments, the integration of digital payment products into a non-financial company’s products and solutions, all in a bid to make the merchant operations as seamless and scalable as possible, because at the end, every company wants to unlock more revenue channels and every customer wants to ensure that they pay in a compliant and secure environment, that’s what brings back customers, right?
Ease of payment undoubtedly makes the customer happier, but as embedded payments have evolved so much since its introduction, the need for multiple payment functions and compliance safeguards from both customer and merchant entails a new type of embedded payments solution is essential.
That is what Worldline and Online Payment Platform (OPP) are seeking to bring to the market with their embedded payments solution, launched in October.
Payment Expert Senior Journalist, Callum Williams, was invited to a call to interview Marc-Henri Desportes, CEO of Worldline, and Richard Straver, Founder of OPP, for an in-depth discussion on the importance of embedded finance, the latest launch from both companies and the evolving customer and merchant needs in 2024.
Callum Williams: I think we will dive straight into it. I’ll open this first question up to the both of you. Embedded payments has been in its relative infancy since 2015.
So to the present day, how transformative do you believe embedded payments have been to not just the financial industry, but other industries too? I’ll open that one up to you, Marc-Henri, first.
Marc-Henri Desportes: I think it’s really transformative because it helps the platform era to really take place, because we see more and more founders willing to launch a new business putting in contact a vast crowd of users, consumers and buyers and sellers providers, and there is a huge potential in this domain.
By making it simple and easy it’s accelerating this move and clearly simple and easy is not straightforward because as it is involving money, you have a lot of regulation falling on them, and this regulation has intensified over time.
But it all comes down at the end to how the financial flows are handled in a compliant way. And so for these founders to develop their business and find their way into this new industry, having a simple solution, something that is not too difficult or too much tailor-made or in which they need to glue different options, providers into something that really works is really making a difference.
Richard Straver: Beautifully said. Just to add to that, looking at the fintech industry, the first wave of real online fintech was basically geared and designed towards the typical e-commerce journeys of web shops.
So what we see is that the old embedded payments were kind of refactored web shop payment solutions, trying to build, trying to make that kind of work for marketplaces and platforms, which it does to some extent, of course.
But for example, myself, the first seven years of my career I had a web development company and I built numerous platforms and marketplaces and due to those first hand experiences, I felt it could have been done a lot better because there was a lot of noise and lot of inefficiency, it was simply obvious that that technology was built for web shops and they tried to fit it into a platform.
“There’s almost no industry that’s not being affected by the platformisation era”
I think that the fintech industry in that regard has had to adopt and enhance and broaden their systems in order to deal with this dynamic. For us, we came late to the payments industry, it was never my ambition to go there.
I’m just a Founder that built platforms and marketplaces and had this drive to try and make the user journey as efficient as possible, but I knew payments was something I had to fix because it will inevitably be a part of a platform usage in pretty much all cases.
But looking at industries next to the fintech industry, I think there’s almost no industry that’s not being affected I think by the platformisation era and no consumer that’s not affected or businesses not affected by it already.
Looking at your own spending behaviour, probably about 50% of your purchases have been done through a platform in the last year or so, Amazons or Ubers etc., but also the smaller ones, niche players that within their industry are changing that particular dynamic.
It’s not just about the large established ones, it’s actually about all these niche players that are coming up and baking something much more efficient within their particular industry. What we see is that there’s literally thousands being launched every year and probably even more per country or continent.
Callum Williams: Yeah, brilliant point there Richard. Touching on the ease of use regarding the merchant and how to properly onboard the customers as well, that’s really vital and something we’ve been seeing quite a lot in the industry over the past several years.
Marc-Henri, the new solution with OPP, what made it the right partner for this embedded payments solution?
Marc-Henri Desportes: Clearly we were having the ability to serve all kinds of payments. We are having to scale these payments and also to sell them locally. But what we needed is a very agile interface that was easy to connect with for the marketplaces and that was taking the pain away from the complexity of their business, like onboarding the buyers and the seller in a very simple and automated way.
That was what OPP was able to do at scale. The efficiency, the level of automation, I think, are up top of the industry. And why so? Because they designed their product from the beginning to feed this specific market need.
So that’s why we wanted to work with OPP. That’s why we joined forces and that’s why we combined what we are building, this easiness to connect to marketplaces and its efficiency, which is above the market with the ability to sell all kinds of payments and then make it a one-stop shop. That’s really a no-brainer for any new marketplace founder.
Callum Williams: And Richard, coming into the partnership as well, you’re leveraging your expertise within the merchant and the marketplace industries.
Could you just let us in and understand what are some of the most pressing merchant needs when it comes to payments? How do they differ from different industries? I know you have IKEA as one of your clients and Gumtree. How do their payment methods differ in terms of what their customers need, for example?
Richard Straver: When you look at platforms and marketplaces, you will see that there are marketplaces that have a C2C dynamic, a B2B dynamic, and then you have marketplaces and platforms that do both.
At the end of the day for us, we have to move money from one part to another bank account. That’s basically what we have to do.
Looking at regulation, in terms of the onboarding flow or the onboarding APIs, it will differ a little bit for a business merchant as to a consumer merchant.
But apart from that, the rest is pretty much exactly the same. It’s all being able to leverage the relevant payment methods for that particular country or target group. Now, that could be different for consumers and businesses, but mainly we see it overlaps, whether they were online using PayPal, credit cards, simple bank transfers or local debit schemes like Bancontact or iDeal… you name it. All that on the transaction or buyer side, it’s kind of the same.
Callum Williams: That kind of leads me into my next question and that would be regarding the Worldline and OPP embedded payment solution.
Just how will this solution address some of those aforementioned merchant needs, whilst also ensuring that customer satisfaction is as seamless as possible during the checkout process? I’ll go to you Marc-Henri for this question.
Marc-Henri Desportes: We will cover all the needs of our marketplace where we really differentiate the ease of integration on our APIs, onboarding within weeks, the super automated sub-merchant or seller onboarding, the super automated handling of disputes and various processes, and the highest level of compliance, as Richard just said.
One thing that is going to come in the coming weeks and months I’m pretty sure is accepting the payment physically on a mobile device. So the Worldline tap on mobile solution will complement this offer, which is particularly useful for platforms including delivery to the home services, of goods where consumers may like to pay after. Having a payment on device makes a really big difference.
So that’s another complementary dimension between the offer that one is bringing and the capabilities of OPP to fit market data.
Richard Straver: And I think it’s a great question because user happiness is the number one target for any platform. You need to ensure that your users are just applauding you all over the internet. Otherwise, you’re going to get bad ratings and your platform’s going down.
What you need is that people love trading or working on your platform, and when you integrate payments, this will inevitably come with a new type of support and service needs. This is something that we actually only really discovered once we started doing this at a huge scale.
“Our calls tend to take less than on average one minute – this is pretty phenomenal in the payments industry.”
So for example, eBay Kleinanzerigen serves 18 million users in Germany. What we saw is that these platform businesses are very good at helping users with their typical journeys, but when it comes to payments, they are not the experts at helping and providing support there.
But you’re still going to get loads of questions. Where’s my money? Why didn’t this payment work? Why is my KYC still not finished? When is my money coming out of escrow, etc. Those platforms, they don’t want to build a new support department just to be able to handle those payment questions and even if they did, they’re going to have issues with the fact that due to GDPR, they don’t have visibility in all the data they may require to be able to even handle that support question.
So what we did is two things. First, we started building an automated mediation program. This is a product that allows you to launch a mediation process between the buyer and the seller on any transaction that’s still in escrow.
This solves any issues between the buyer and seller and once they find a solution, it’s automatically handled. Due to hundreds of thousands of these disputes that we’ve already done, we’re able to devise or create an automated mediation flow that handles about 70% of all these issues automatically.
Our system has been designed in such a way that with most cases, we will automatically detect the phone number. Our calls tend to take less than on average one minute. This is in the payments industry and is pretty phenomenal. I mean, try calling one of the big competitors as a buyer once you’ve done a transaction on a marketplace and find somebody who wants to answer you.
Callum Williams: Yeah, no, I get that. I’ve had my own difficulties with that in the past. So I think you’re quite right there.
That brings to an end part one of Payment Expert’s conversation with Worldline and OPP. Part two will be released next week, 21 November.
