ePayment in Global Environment By Orly Amrany (@SOSA)

1. Global e-Payment Orly Amrany

2. Agenda ePayments ecoSystem How to choose payment provider Use Case: Wix’s decision to build its own Billing system How Wix is doing global payments (LATAM use cases) Challenges of Alternative Payment methods w/ Subscription model A Bit About Myself

3. A Bit About Myself

4. Schulich School of Business, Toronto, CA, Marketing Major TAU Recanati MBA Technion, BSc Computer Science engineering IDF Mamram Extended Programming course R&D Center SW Developer

5. Head of Products and Product Marketing SDK Partner Manager, QM Manager, Product Manager, Technology Platform General Manager Premium Services Business Unit Sr. SW Developer & Project Lead

6. ePayments Ecosystem

7. Buzzwords Payment Provider Payment Gateway Payment Aggregators Processor PCI Billing System Acquiring Bank / Acquirer Merchant (of records) PSP (Payment Service Provider) Issuing Bank Charge Back APM (alt. Payment Method)

8. Merchant Issuing Bank Card Schemes Acquiring Bank Alternative Payment Methods Online/offline Bank Transfer eWallets Cash Processor/ Payment GWs Aggregators Billing System Billing Payment

9. Billing System Billing System Product Catalogue PCI Currencies Coupons Recurring Charge / Routing

10. How to Choose Payment Provider?

11. Main Questions: What is your billing model? 1

12. Main Questions: What is your billing model? Which countries you want to sell in? do you have local entity there? 1 2

13. Main Questions: What is your billing model? Which countries you want to sell in? do you have local entity there? Did you already develop billing logic? 1 2 3

14. Do you expect returning users? Is your model a subscription one? YES Dependency on providers / No ability to move between them Become PCI-DSS Compliant OR Save CC / 1-click buy Example:

15. Wix’s Use Case

16. In-House Billing System Subscription based model Currently working with 2 billing solutions Brazil success rate is very low (~40-50%) Old system is no longer supported Old system is not PCI level 1 compliance Old system does not support some needed features Wix’s Payment Status on 2012:

22. Replace old system that was not supported any more Split traffic between vendors (not to be dependent on one) Solve the Brazil issue Allow Wix to enter new markets easily In-House Billing System Management Requirements

26. Support current system functionalities Support current payment options and currencies Allow us to sell in Brazil using local CC Ability to easily enter new territories Redundancy, availability & physical environment (downtimes etc) Knowledge of international market Success rate per GEO (how many Acquiring Banks, and which ones?) Price In-House Billing System Factors / Benchmark KPIs:

34. The Conclusions(After extensive market research & due-diligence of several solutions) …And

35. Conclusion 1-click purchase & recurring requires saving the CC #1

36. Conclusion 1-click purchase & recurring requires saving the CC Switching providers is not feasible in recurring payment (new traffic only) #1

37. Conclusion 1-click purchase & recurring requires saving the CC Switching providers is not feasible in recurring payment (new traffic only) Independency from a specific provider requires saving the CC in Wix #1

38. Conclusion 1-click purchase & recurring requires saving the CC Switching providers is not feasible in recurring payment (new traffic only) Independency from a specific provider requires saving the CC in Wix Need PCI-DSS Level 1 Certification #1

39. Conclusion No solution in the market that is mature* enough, in terms of global ePayments #2

40. Conclusion No solution in the market that is mature* enough, in terms of global ePayments Adding New local provider takes time #2

41. Conclusion No solution in the market that is mature* enough, in terms of global ePayments Adding New local provider takes time APMs w/ recurring is a challenge #2

42. Conclusion No solution in the market that is mature* enough, in terms of global ePayments Adding New local provider takes time APMs w/ recurring is a challenge Need a local entity in most markets #2

43. Conclusion No solution in the market that is mature* enough, in terms of global ePayments Adding New local provider takes time APMs w/ recurring is a challenge Need a local entity in most markets PSP model is less & less popular #2

44. Conclusion No solution in the market that is mature* enough, in terms of global ePayments Adding New local provider takes time APMs w/ recurring is a challenge Need a local entity in most markets PSP model is less & less popular We need the ability to control our globalization’s roadmap #2

45. Conclusion Billing System (handling subscriptions) is separated from the payments ability #3

46. Conclusion Billing System (handling subscriptions) is separated from the payments ability Support different future charging model (e.g quantity base, quota base) #3

47. Conclusion Billing System (handling subscriptions) is separated from the payments ability Support different future charging model (e.g quantity base, quota base) Flexibility of recurring logic (e.g charge on the 2nd, 16th) #3

48. Conclusion Billing System (handling subscriptions) is separated from the payments ability Support different future charging model (e.g quantity base, quota base) Flexibility of recurring logic (e.g charge on the 2nd, 16th) Need to develop subscription manager #3

49. Conclusion 4 =+ + Service Bill System (SBS) #4 #1 #2 #3

50. Business Impact Initial success rate ~+0.5% (!) in ALL countries Improved Retry logic: Saving ~9% OF ALL transactions (US results: Mo: 87.5% → 95.8%, Y: 67.7%--> 86.2%) ChargeBacks fight saving: ~200K/ Year Easy AB test of different Processors (success rate) Saving middleman processing fees on 200M/Y : 3 Million /Y

51. Global Payments

52. LATAM Case (BR) Popular Payment Methods • ~75% debit & credit Cards (mostly local CC) • ~15-30% cash (mostly Boleto) • Local CC of visa/MC • Local brands of cc: Elo, Hipercard

53. LATAM Case (BR) Legal / Operation / Finance • Need local entity to process local cards • There is local tax • Need to add 1 field (CNPJ/CNP) • Invoicing needs to be sealed / provided by local firm (Acal accounting firm)

54. LATAM Case (BR) Major Acquire Banks

55. LATAM Case (BR) Local payment providers

56. LATAM Case (BR) Consideration • User flow for Boleto / CC • Ability to save the cc (Payment Page Vs Redirect) • Boleto does not support recurring • PCI concerns

57. LATAM Case (BR) Action taken - local CC support first • Establish Wix BR entity • Sign-up w/ local accounting firm (Acal) • For local cc: • Open bank account in HSBC (settlement) • Sign up w/ Cielo, opened MID • Integration directly with Cielo (in the past CobreBem & Braspag) • For Boleto: Connect via AstroPay (all banks)

58. LATAM Case (MX) Popular Payment Methods • ~45% debit & credit Cards (international/local) • ~32% cash (mostly oxxo) • ~15% bank transfer

59. LATAM Case (MX) Legal / Operation / Finance • Need local entity to process local cards • There is local tax • Add fields (RFC/Vat ID, address fields) • Invoicing needs to be sealed & connected to the Tax authorities

60. LATAM Case (MX) Major Acquire Banks

61. LATAM Case (MX) Local payment Providers

62. LATAM Case (MX) Consideration • User flow on oxxo, bank transfer • Ability to save the cc (Payment Page Vs Redirect) • OXXO/bank transfer doesn’t support recurring • PCI concerns

63. LATAM Case (MX) Action Taken • Establish Wix MX entity • Sign-up w/ local accounting firm/invoicing (BBVA,Interfactura) • Tech Integration project with Interfactura • For local cc: • Sign up w/ banorte, open Bank account • Integration to banorte Via Adyen GW (can be done directly w/ Banorte) • For APM • integration with MercadoPago for OXXO & Bank Transfer

64. Challenges of APM & Subscription Model

65. • Recurring model • Churn / Opt-in • Monthly Subscriptions Billing Challenges Non-recurring Payment Methods (Direct Debit, iDeal, Cash) Off-line Payment Methods (SEPA, Bank Transfer, Cash based..) • Service delivery issue (e.g domain)

66. Possible Solutions “Manual recurring” – send email give option to “pay now” Sell yearly subscriptions only Delivery after payment (Srv subs. Date starts after payment, not on pay)

67. UX Challenges How Sell Yearly (change cycle after selecting payment option?) Cannibalization of CC Redirect flows

68. Suggested Solutions

74. Questions?

75. Thank You! orlyam@gmail.com orly@wix.com Email 054-2126685 Mobile

ePayment in Global Environment By Orly Amrany (@SOSA)

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