Insights of Sirish Kumar on payment gateways and on starting your eCommerce business in the GCC region
Mr. Kumar is CEO of TELR and former CFO for PayPal in ASEAN and India. He sees the main challenge for payment gateways in eCommerce to protect the store owner from fraudulent buyers. TELR is a payment gateway that handles payments from local and international customers. It offers merchants one simple integration to accept multiple currencies for business on social media, websites, and mobile apps.
A payment gateway is the key to make the shopping experience for the buyers as enjoyable as possible. A seamless integration in the existing shop concepts is crucial. Especially the upcoming new model of social selling requires a quick and easy way to pay. In social selling the products were offered via a facebook page, or you could create selling opportunities directly from you instagram account. In this way a simple social media presence turns into a point of sale.
While the merchant focuses on marketing and getting the right products for her customers, there are buyers that don’t respect a good deal. They claim the product was not delivered, abuse return policies, or claim the item is not as described. The even more malicious buyers use identity theft to scam the merchant. Identity theft comprises a staggering 71 percent of all fraud activity.
But how to find the genuine buyers? A payment gateway provides a full anti-fraud solution. The gateway utilizes a lot of methods and tools to protect the merchant. One important method is the Address Verification Service (AVS). The AVS checks if the delivery address matches the one on file at the card issuing bank. Another basic requirement is Card Verification Value (CVV). A code connected to each credit card that is not stored digitally. And then there are a lot of public and secret methods like device identification, flagging of large transactions, payer authentication (3-D secure), restrictions for high-risk countries, lockout mechanisms, and risk scoring.
For the new entrepreneurs these problems seem not so pressing in the start of their business as Mr. Kumar states. They need to focus on getting their basic store up and running. A starting business needs to generate revenue, and then, in the next steps grows internationally. When a shop only processes a few orders a day the risk of fraud seem manageable. But when you scale up and you’re facing 500 transactions a day, a problem with credit card payments could become very risky and expensive in the case of frauds.
But what are the special challenges in the GCC Region? Telr made it to the number one spot of payment gateways in the UAE because it is addressing the needs of local customers and merchants. The payment market is very fragmented and there are a lot of cultural differences between the countries. In the UAE there are a total of 13 wallets to choose from, and they’re backed mostly by credit card. A completely different picture you see when you’re looking at Saudi Arabia, where cash is still king. In general payment integrations and gateways are still a big challenge in the region. There are so many payment gateway integration options available in the market, that some merchants integrate multiple payment gateways in their shops. So, it stays difficult to decide which payment gateway will befit your online store. Due to the massive use of credit cards in the UAE, you should choose a solution that provides complete fraud protection included in your service plan.