Online Payment Systems in Turkish E-commerce - Merchant Experiences - 2015.02.24-en

Online Payment Systems
in Turkish E-Commerce:
Merchant Experiences
24.02.2015
EticaretSEM, TEB Incubator
İstanbul
1
Accepting payment is now easy
https://www.iyzico.com

Predefined and Sequential Life:
Birth, School, University, Consultancy,
Corporate Career, ...
2
@hakanerdogan
Life with Entrepreneurship:
Uncertain, ups and downs, stressfull,
enjoyable, passionate, roller-coaster ...
1981 2005 2007 2012
2014
Feb
2014
Nov
iyzico

3
Payment Systems Experience, Since 2007
Credit / Debit Cards :
- EST / Asseco
- Garanti Bank GVP
- YKB Posnet
EFT / Wire Transfer:
- Integration of
Internet Banking

Business Models in E-commerce
4
Business Model İş Modeli
Marketplaces Pazaryerleri
E-Retailers E-Perakendeciler
Classifieds İlan Siteleri
Private Shopping Özel Alışveriş Kulüpleri
Group Buying Grup Satınalma / Fırsat Siteleri
Verticals Dikeyler
Price Comparison Fiyat Karşılaştırma Siteleri
Services over Internet İnternet Üzerinden Hizmet Satan
Siteler
… …

Business Models in E-commerce
5

Why Payment Systems are so Important ?
• Payment systems are major sub-ecosystems of e-commerce
• Payment Systems always grow parallel with e-commerce:
6

Why Payment Systems are so Important ?
• Banks and telco companies drives payment systems in Turkey
:
o BKM Express
o İş Bank Parakod
o Garanti Bank iGaranti
o DenizBank FastPay
o Turkcell Cüzdan
o Vodafone Cep Cüzdan
o TTNET & Avea Mobilexpress
o …
7

8
Chronology of Payment Systems in Turkey
iPara November 2011
PaymentWall Turkey Office October 2011
PayU Turkey Office September 2011
PaytoGo Mid 2011
PayPal Turkey Office Early 2011
Mobilexpress Early 2011
Asseco SEE July 2010

9
Vodafone Cep Cüzdan November 2013
Garanti Bank iGaranti May 2013
iyzico Turkey Office April 2013
DenizBank FastPay January 2013
İş Bank Parakod October 2012
Turkcell Cüzdan October 2012
BKM Express June 2012

10
…
…
Öde.Al April 2014
Monitise – Pozitron Acq. February 2014

Breakdown of Payment Systems in Turkey
11

Cash on Delivery and EFT / Wire Transfer
12
1. Asenkron Ödeme Sistemleri (Asynchronous Payment Systems)
a. Kapıda Ödeme (Cash on Delivery = CoD)
b. EFT / Havale (EFT / Wire Transfer)

Cash on Delivery and EFT / Wire Transfer
13
1. Asenkron Ödeme Sistemleri (Asynchronous Payment Systems)
a. Kapıda Ödeme (Cash on Delivery = CoD)
b. EFT / Havale (EFT / Wire Transfer)

Card Payment Systems
14
2. Senkron Ödeme Sistemleri (Synchronous Payment Systems)
a. Kartlı Ödeme Sistemleri (Card Payment Systems)
i. Kredi Kartları (Credit Cards) * 57 million
ii. Banka Kartları (Debit Cards) * 102 million
iii. Ön Ödemeli Kartlar (Prepaid Cards)
* BKM, August 2014: http://www.bkm.com.tr/istatistik/pos_atm_kart_sayisi.asp

Card Payment Systems
15
a. Kartlı Ödeme Sistemleri (Card Payment Systems)
i. Kredi Kartları (Credit Cards) * 57 million
ii. Banka Kartları (Debit Cards) * 102 million
iii. Ön Ödemeli Kartlar (Prepaid Cards)
* BKM, August 2014: http://www.bkm.com.tr/istatistik/pos_atm_kart_sayisi.asp

Online / Digital Wallets
16
b. Alternatif Ödeme Sistemleri (Alternative Payment Systems)
i. Online / Dijital Cüzdanlar (Online / Digital Wallets)
 BKM Express
 iPara
 PayPal
 …

Online / Digital Wallets – BKM Express
17
i. Online / Dijital Cüzdanlar (Online / Digital Wallets)
 BKM Express
 iPara
 PayPal
 …

18

19

20

21

Mobile Wallets
22
ii. Mobil Cüzdanlar (Mobile Wallets)
 İş Bank Parakod
 Turkcell Cüzdan
 TTNET & Avea Mobilexpress
 iGaranti
 Vodafone Cep Cüzdan
 FastPay
 …

Mobile Wallets – İş Bank Parakod
23
ii. Mobil Cüzdanlar (Mobile Wallets)
 İş Bank Parakod
 Turkcell Cüzdan
 TTNET & Avea Mobilexpress
 iGaranti
 Vodafone Cep Cüzdan
 FastPay
 …

24

25

26

SMS Based Payment Systems
27
iii. SMS Bazlı Ödeme Sistemleri (SMS Based Payment Systems)
 Mikro Ödeme
 PaytoGo
 …

Infrastructure Providers
28
3. Altyapı Sağlayıcılar (Infrastructure Providers)
a. iyzico
b. PayU
c. PaymentWall
d. …

API Providers & Gateways
29
4. API Sağlayıcılar (API Providers & Gateways)
a. Asseco SEE (EST)
b. Garanti Bank - GVP
c. Yapı ve Kredi Bank - Posnet

Breakdown of Payment Systems in Turkey
30
Asynchronous
Payment Systems
Cash on
Delivery
EFT / Wire
Transfer
Card Payment
Systems
Credit Cards
Bank Cards
Prepaid Cards
Online Wallets
BKM Express
PayPal
iPara
…
Mobil Wallets
İş Bank Parakod
Turkcell
Cüzdan
TTNET & Avea
Mobilexpress
iGaranti
Vodafone
Cep Cüzdan
…
SMS Based
Payment Systems
Mikro Ödeme
PaytoGo
…
Infrastructure
Paroviders
iyzico
PayU
PaymentWall
…
API Providers and
Gateways
Asseco SEE
Garanti Bank
GVP
Yapı ve Kredi
Bank Posnet
Alternative Payment Systems
Synchronous
Payment
Systems

E-commerce Steps and Flows
31
SEO
Adwords
Affiliate
SEM
…
1- Traffic
$ $ $
Product
Image
Add to
Basket
E-commerce Site
Product Info
4- Add to Basket2- Registration
E-mail
Name
Surname
Password
Password
(re)
GSM
Sex
+90
Reg. Form
M F
Register
3- Desire
Search, browse, find
women shoes Search

32
Address
(Delivery/Invoice)
Selection
Basket –
Product
Selection
Payment Method
Selection
Payment
Result

33

How to Increase Basket Conversion Rate
34
Address
(Delivery/Invoice)
Selection
Basket –
Product
Selection
Payment Method
Selection
Payment
Result
SUCCESS =
CONVERSION
SHOPPING CART
ABANDONMENT
%65+ *
* http://www.ritholtz.com/blog/2012/05/shopping-cart-abandonment/
* http://baymard.com/lists/cart-abandonment-rate
GOAL: To Increase Conversion
• Minimum page transition
• Minimum click
• Minimum distracting elements
• Maximum information
• “Above the fold” concept

Minimum Page Transition and Click
35
Max. 3 pages
No name surname, bank
selection, card type (visa,
mastercard, amex) selection
If there is only 1
address then skip
address page
Do not use 3DS
in possible
Expire Month & Year is asked
before CVC2 and formatted as
08/17

Minimum Distracting Elements
36
No Menu, banner, logo,
ads, basket items are
clear
Additional info is given in
modal/lightbox without leaving
page
Clear header and no links

Maximum Information
37
Clear
breadcrumb
Card logo, bank,
and association
is displayed
Basket and
address
summary is
displayed
All banks
installments and
given card
installments are
displayed
CVC2 and 3DS
information is
given

Above the Fold Concept
38
Visible
area of
page

39
Buttons and
links are below
the page
Visible
area of
page

40
Visible
area of
page
Buttons and
links are
placed in the
visible area of
the page

41

Design of Card Payment Page
42
Syntactic and Semantic
Validations
• Length validation
• Numeric input validation
• 3DS supported card validation
• Debit card installment validation
• BIN validation and not existing
Virtual POS – installment validation
• …
e.g.: Card Number
• 15 or 16 digits,
• CVV/CVC 3 or 4 digits, numeric
• Luhn Algorithm check

Distribution of Payment Errors
• 20 – 25 % of payment requests are failed
• Roughly 1/3 of those failed payment requests are caused by “insufficient funds
– not enough limit” (33 – 38 %)
• Other Payment Errors:
o General declined (15 – 18 %)
o Invalid expire year or month (10 – 12 %)
o Invalid CVV / CVC (2 – 3 %)
o 3DS not supported by card / bank
o Card does not support installment
o Can not proceed, card is not allowed to internet payments
o Technical problems, …
43

Error Messages to Display
44
• Your card number is not valid, …
• Your expire year and month is not valid, …
• Your CVV / CVC2 is not valid, …
• Your card does not support installment …
• You can not make installment payments with debit cards, …
• Your card limit is below the payment amount, …

Error Messages to Display
45
• Your bank does not proceed the payment request, …
• Your card/bank does not support 3DS payments, …
• Order ID is already used before, …
• The items you are getting to buy are out of stock, …
• Payment transaction is failed, …
• …

Payment and Refund Tests
46
Total 100 TL
20
TL
30
TL
50
TL
32 x Virtual POS x … ~ 100+ payment tests
Refund Tests
• Refund and cancel of 100 TL
• Refund of 20 TL
• Partial refund: 5 TL of 20 TL
• Second partial refund: 10 TL of 20 TL
• Cancel of refund of 100 TL 
• …

Payment and Refund Tests
47
• Payment systems do not have a tolerance for a mistake
• You have to go live with 0 bug
• It’s better not to accept payment than accepting payment with bug
that you haven’t realize (it may be too late when you realize the
bug)
• If there is a 2 minute outage, the alarm bells start to ring
• Payment systems for the health of the heart and blood vessels
Maximum adrenaline 

Proactive Monitoring: Payment and Refund
48
Now is Thursday 03:40 pm.
Considering last week Thursday between 00:00 – 03:40 pm and last 4
week average:
o How many payment transactions requested ?
o What about the amout of those transactions ?
o What about the breakdown of those transactions based on Virtual POS’ses
and card families?
o What about the success and failure rates ?
o What about the distribution of payment errors ?
o What about the standart deviation of those transactions ?
o …

Proactive Monitoring: Payment and Refund
49
• Daytime
- Based on Virtual POS’ses
o The count of payment transactions in last 2 minutes > 0 ?
o The count of payment transactions in last 3 minutes
> (last 4 week average) x 0.85 ?
o The amount of payment transactions in last 5 minutes
o The count of payment errors in last 10 minutes
• At Night
- Based on Virtual POS’ses
o …

Status Quo
50
 Shopping Steps
 Card Payment Page (minimalist approach, the maximum information)
 Syntactic and Semantic Validations
 Distiribution of Payment Errors
 Payment Errors to Display
 Payment and Refund Tests
 Proactive Monitoring

New Feature Development ve 4 Check Points
51
4- Is there a payment problem ?
51
1- Is there a Fraud risk ?
2- Is there a refund problem?
3- Is there an accounting problem?

Fraud and Chargeback
52
• Fraud detection, fraud prevention and monitoring
mechanisms
o User’s history and profile
o Item’s price
o Online item / offline item
o Payment location, IP address and cookie information
o Other cards used by the user
o Cardholder name surname vs user membership name
surname
o Shipment address vs membership address information
o Payment errors encountered by user
o Payment fail / success statistics of user
o …

Fraud and Chargeback
53
• Fraud detection, fraud prevention and monitoring
mechanisms
o Rule sets
o Learning systems
o Data mining considering previous data
o Potential risk algorithms
• Chargeback Flow
o Chargeback request
o The appeals process
o Returning/rejecting the chargeback request

Security
54
• Personal Security
o Using known and safe shopping sites
o Considering key-logger in public internet
o Using 3D Secure
o Using virtual cards
o … • Corporate Security
o Not storing card information
o PCI – DSS
o Audit
o Penetration tests
o …

No Response Payments
55

Thanks
56
@hakanerdogan
hakan@iyzico.com
http://www.odemesistemleri.org
@odemesistemleri

Online Payment Systems in Turkish E-commerce - Merchant Experiences - 2015.02.24-en

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Online Payment Systems in Turkish E-commerce - Merchant Experiences - 2015.02.24-en