Ep. 13 - Rapid Dispute Resolution spotlight, Peloton subscription churn, Klarna picks up Laybuy NZ assets, New Travelex app, plus PotN, BotN & more..
Grant Evans
Partnerships Leader @ Nomupay | LinkedIn Top Voice | Writer of The Payments Shed ??
Rapid Dispute Resolution (RDR) - Is it really helping to combat fraud?
The introduction of RDR (Rapid Dispute Resolution) has drastically transformed the chargeback landscape in payments. But what about fraud ratios?
The challenge is that RDR does not truly combat payment fraud, so although many businesses have reduced their chargeback levels and appeased their acquirers in some ways, their TC40/SAFE ratios can often remain high.
This leads to challenges from the Card Schemes that can still result in a business losing their merchant account facilities. As many acquirers do not readily pass on TC40/SAFE data to businesses, many merchants can be operating without the knowledge that they even have a fraud problem that could ultimately lead to them losing their payment facilities.
This makes utilising a payment gateway that pulls this information from the acquirers and presents it to businesses so important, as well as considering a more advanced fraud tool that allows a business to get ahead of this problem before they enter a Scheme fraud monitoring program.
The team at Kount have recently put together a brilliant overview of TC40/SAFE alerts and they also explain RDR in five simple steps on the Kount website.
SAFE and TC40 Data overview from Kount:
RDR in five steps from Kount:
Payment fraud sadly isn’t going anywhere fast, so it is paramount that merchants have a clearly defined internal strategy around chargeback and fraud management.
I have seen some great success stories from businesses that have really invested in this area, reducing chargeback and fraud ratios significantly through the power of data, and subsequently how they have utilised that data to make payment process improvements.
With impending new scheme rules that will greatly impact subscription economy merchants that aren't appropriately managing their fraud ratios, this has never been more relevant for the recurring commerce sector in particular.
Peloton sees steep quarterly decline in paid app subscription customers
On the subject of subscriptions, some interesting figures were released by Peloton this week regarding a steep 8.4% churn on their app subscriptions over the last quarter.
It is now easier than ever for customers to cancel their subscriptions, whether they be on direct debit or continuous payment authority (CPA) and merchants need to have the best possible alerts in place from their payment providers to ensure they can try to retain these departing customers.
Utilising Network Tokens is a very useful way for merchants to ensure that they are getting the best possible authorisation rate on their subscription CPA customers they can, which could go some way towards offsetting a certain percentage of organic customer churn.
Primer have a very useful guide to Network Tokens on their website which you can read here:
Given so many of the worlds leading brands are introducing what can become very, very lucrative subscription models, this highlights that continual innovation and perks still need to be offered to end customers in order to ensure that churn levels don't grow to worrying levels.
You can read the full Peloton story on the PYMNTS website here:
Klarna acquires Laybuy business
The decline of Laybuy over the past couple of years has been a difficult watch, given it was one of the pioneers of Buy Now Pay Later alongside Afterpay/Clearpay and Klarna.
Having delisted from the Australian stock market back in January 2023, the writing seemed on the wall for the business, before it formally entered administration back in June of this year.
The news this week that Klarna has picked up the brand assets for Laybuy in New Zealand isn't a surprising one, though it is a surprise perhaps that nobody picked up the brand sooner.
You can read more on this story via Finextra here:
Laybuy maintained a reasonable active customer base at the point of its demise and it has left a gap in the market in New Zealand that Klarna now seems more eager to re-explore with less competition, having previously only held a skeleton staff in the country previously.
The Laybuy demise has of course got the BNPL naysayers shouting from the rooftops again. Question marks remain around regulation, consumer protection, a flooded market and profitability.
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A former market leader heading in this direction is a stark warning to other players in the market without doubt, but Klarna heading towards a monstrous IPO also shows that there can be a successful route forward for BNPL providers that have pivoted into other verticals outside of their core lending products.
Klarna is rumoured to be looking to secure $20b from said IPO, not bad for a business that was seen as flash in the pan by many a few years ago..!
Waza secures seed funding
The African FinTech revolution shows no sign of slowing down any time soon, with Waza the latest fast growing payments FinTech from the region to secure an impressive $8m seed round to help accelerate growth.
Waza is a platform that enables businesses to easily make and receive global payments, reduce their transaction costs, and expand their customer base to new international markets.
Similar competing businesses in their market segment include AZA Finance, Verto and Conduit.
TechCrunch have a great article on the investment round and the business background that you can read here:
Travelex launches new Travelex Money Card (TMC) app
Global foreign exchange provider Travelex has announced the launch of a new money card app.
In what is becoming an ever narrowing market with only a few leading players remaining in the traditional bureau de change segment which includes the likes of Travelex, The Change Group, Global Exchange and Eurochange, this is an interesting more from Travelex in an attempt to steal the march on their competitors with some more innovative digital payments technology.
Benefits of the new app include the ability to top up an account in 22 currencies, as well as adding digital wallet capabilities for account holders such as Apple Pay and Google Pay.
You can read more on this news via the Paypers article below:
Podcast of the Newsletter
PotN this episode is an Economist podcast from a few weeks ago that touches on the AI boom and what might threaten the huge volumes of investments that have already been ploughed into the technology.
Some estimates have put investment volumes in the technology to date at a staggering $1.4 trillion! At those levels, there are going to be some very powerful global organisations that surely won't rest on their laurels in making AI technology a huge success. But what might end up getting in their way?
You can listen to this episode on Spotify here:
Book of the Newsletter
BotN this episode goes to a book that was recommended to me by several partnership leaders that were fortunate enough to attend the recent Partnership Leaders Catalyst conference in Chicago, which I had pretty serious FOMO not to be at this year.
It looked like a fantastic event for anyone involved in the world of partnerships. The event will be back next year and you can check the details for Catalyst 2025 out here: https://www.joincatalyst.com/.
Anyway, the book that has recently landed on my doorstep following all of those recommendations is The Book on Partnerships: How Startups Work With Partners To Sell More, Add Features, And Get Acquired, by Franz-Josef F M Schrepf.
I always like to stress that learning about and understanding how to get the very best out of partnerships is not just for those who work in partnerships, but for the entire ecosystem of most organisations. So non-partnership folks, don't assume this book isn't for you please!
As this is a brand new release, you are most likely best off picking up your copy via trusty old Amazon this time around. A link to the book is below:
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Thank you for reading The Payments Shed Newsletter.
Sources: The Payments Shed Images | Primer | PYMNTS | Finextra | Kount | TechCrunch | The Paypers | Spotify | The Economist | Amazon |
The Payment Solutions Guy — I'll help you decrease processing fees by 20%, and improve approval rates (guaranteed) by finding the best Payment Providers for your business | Visit my website to learn how
6 个月Looking forward to the new episode, superstitions won't stop me!
SVP Head of Fraud & Risk Solutions @NextGen Payments | Payment Services for High Risk Verticals | Consultancy | Fraud and Chargeback Prevention Specialist | Payments Optimisation | Acquiring Solutions | ex Barclaycard
6 个月I completely agree with your points on RDR, Grant Visa’s Compelling Evidence 3.0 does help with fraud and fraud ratios, and the gateway plays a key role in this solution. While RDR is excellent for reducing chargebacks and helping merchants operationally by removing chargebacks from the ecosystem, it does require merchants to issue refunds. The advantage of CE3.0, particularly for subscription businesses, is that if you can provide evidence of previous, undisputed transactions with the merchant, the fraud liability shifts back to the issuing bank. This allows the merchant to retain the full transaction amount without needing to issue a refund. Data is essential for this process, and that's where the gateway can add significant value, as it holds all the necessary data to support CE3.0. More info on this product and its benefits https://kount.com/en-gb/node/211 Mastercard will be launching a similar proposition October 2024. Kount, an Equifax Company