Online Payment Systems in Turkish E-commerce Market

Online Payment Systems

in Turkish E-‐Commerce:

Merchant Experiences

09.10.2014 Boğaziçi University E-‐commerce Lecture

İstanbul

1 Increase your revenue, decrease your costs by Payments OpFmizaFon hHp://www.opFmistpayments.com

Predefined and SequenFal Life: Birth, School, University, Consultancy, Corporate Career, ...

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@hakanerdogan

Increase your revenue, decrease your costs by Payments OpFmizaFon hHp://www.opFmistpayments.com

Life with Entrepreneurship: Uncertain, ups and downs, stressfull, enjoyable, passionate, roller-‐coaster ...

1981 2005 2007 2012 2014

3

Payment Systems Experience, Since 2007


Credit / Debit Cards : -‐  EST / Asseco -‐  GaranF Bank GVP -‐  YKB Posnet

EFT / Wire Transfer:

-‐  IntegraFon of Internet Banking

Business Models in E-‐commerce


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


Why Payment Systems are so Important ?

•  Payment systems are major sub-ecosystems of e-commerce

•  Payment Systems always grow parallel with e-commerce:


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  …


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


Cash on Delivery and EFT / Wire Transfer


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


1.  Asenkron Ödeme Sistemleri (Asynchronous Payment Systems)

a.  Kapıda Ödeme (Cash on Delivery = CoD)

b.  EFT / Havale (EFT / Wire Transfer)

Card Payment Systems


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: hHp://www.bkm.com.tr/istaFsFk/pos_atm_kart_sayisi.asp




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: hHp://www.bkm.com.tr/istaFsFk/pos_atm_kart_sayisi.asp

Online / Digital Wallets



b.  Alternatif Ödeme Sistemleri (Alternative Payment Systems)

i.  Online / Dijital Cüzdanlar (Online / Digital Wallets)

Ø  BKM Express

Ø  iPara

Ø  PayPal

Ø  …

Online / Digital Wallets – BKM Express




i.  Online / Dijital Cüzdanlar (Online / Digital Wallets)

Ø  BKM Express

Ø  iPara

Ø  PayPal

Ø  …









Mobile Wallets




ii.  Mobil Cüzdanlar (Mobile Wallets)

Ø  İş Bank Parakod

Ø  Turkcell Cüzdan

Ø  TTNET & Avea Mobilexpress

Ø  iGaranti

Ø  Vodafone Cep Cüzdan

Ø  FastPay

Ø  …

Mobile Wallets – İş Bank Parakod




ii.  Mobil Cüzdanlar (Mobile Wallets)

Ø  İş Bank Parakod

Ø  Turkcell Cüzdan

Ø  TTNET & Avea Mobilexpress

Ø  iGaranti

Ø  Vodafone Cep Cüzdan

Ø  FastPay

Ø  …







SMS Based Payment Systems




iii.  SMS Bazlı Ödeme Sistemleri (SMS Based Payment Systems)

Ø  Mikro Ödeme

Ø  PaytoGo

Ø  …

Infrastructure Providers


3. Altyapı Sağlayıcılar (Infrastructure Providers)

a.  PayU

b.  iyzico

c.  PaymentWall

d.  …

API Providers & Gateways


4. API Sağlayıcılar (API Providers & Gateways)

a.  Asseco SEE (EST)

b.  Garanti Bankası - GVP

c.  Yapı ve Kredi Bankası - Posnet

Breakdown of Payment Systems in Turkey


Asynchronous Payment Systems

Cash on Delivery

EFT / Wire Transfer


Credit Cards

Bank Cards

Prepaid Cards

Online Wallets

BKM Express

PayPal

iPara

…

Mobil Wallets

İş Bank Parakod

Turkcell Cüzdan

TTNET & Avea Mobilexpress

iGaranK

Vodafone Cep Cüzdan

…

SMS Based Payment Systems

Mikro Ödeme

PaytoGo

…

Infrastructure Paroviders

PayU

iyzico

PaymentWall

…

API Providers and Gateways

Asseco SEE

GaranK Bank GVP

Yapı ve Kredi Bank Posnet

Alternative Payment Systems

Synchronous Payment Systems

E-‐commerce Steps and Flows


SEO

Adwords

Affiliate

SEM

…

1-‐ Traffic

$ $ $

Product Image

Add to Basket

E-‐commerce Site

Product Info

4-‐ Add to Basket 2-‐ RegistraKon

E-‐mail

Name

Surname

Password

Password (re) GSM

Sex

+90

Reg. Form

M F

Register

3-‐ Desire

Search, browse, find women shoes Search



Address (Delivery/Invoice)

SelecKon

Basket – Product SelecKon

Payment Method SelecKon

Payment Result



How to Increase Basket Conversion Rate


Address (Delivery/Invoice)

SelecKon

Basket – Product SelecKon

Payment Method SelecKon

Payment Result

SUCCESS = CONVERSION

SHOPPING CART ABANDONMENT

%65+ *

* hHp://www.ritholtz.com/blog/2012/05/shopping-‐cart-‐abandonment/ * hHp://baymard.com/lists/cart-‐abandonment-‐rate

GOAL: To Increase Conversion

•  Minimum page transiKon

•  Minimum click

•  Minimum distracKng elements

•  Maximum informaKon

•  “Above the fold” concept

Minimum Page TransiFon and Click


Max. 3 pages

No name surname, bank selecKon, card type (visa, mastercard, amex) selecKon

Skip Address ?

Segmented use of 3DS

Expire Month & Year is asked before CVC2 and formaoed as 08/17

Minimum DistracFng Elements


No Menu, banner, logo, ads, basket items are clear

AddiKonal info is given in modal/lightbox without leaving page

Clear header and no links

Maximum InformaFon


Clear breadcrumb

Card logo, bank, and associaKon is displayed

Basket and address summary is displayed

All banks installments and given card installments are displayed

CVC2 and 3DS informaKon is given

Above the Fold Concept


Visible area of page



Buoons and links are below the page





Buoons and links are placed in the visible area of the page



Design of Card Payment Page


SyntacKc and SemanKc ValidaKons

•  Length validaFon •  Numeric input validaFon •  3DS supported card validaFon •  Debit card installment validaFon •  BIN validaFon and not exisFng

Virtual POS – installment validaFon •  …

e.g.: Card Number •  15 or 16 digits, •  CVV/CVC 3 or 4 digits, numeric •  Luhn Algorithm check

DistribuFon 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, …


Error Messages to Display


•  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


•  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 gevng to buy are out of stock, …

•  Payment transacFon is failed, … •  …

Payment and Refund Tests


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 •  ParFal refund: 5 TL of 20 TL •  Second parFal refund: 10 TL of 20 TL •  Cancel of refund of 100 TL J •  …

Payment and Refund Tests


•  Payment systems do not have a tolerance for a mistake

•  You have to go live with 0 bug

•  It’s beHer not to accept payment than accepFng 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 J

ProacFve Monitoring: Payment and Refund


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 transacFons requested ? o  What about the amout of those transacFons ? o  What about the breakdown of those transacFons based on Virtual POS’ses

and card families? o  What about the success and failure rates ? o  What about the distribuFon of payment errors ? o  What about the standart deviaFon of those transacFons ? o  …

ProacFve Monitoring: Payment and Refund


•  DayFme - Based on Virtual POS’ses

o  The count of payment transacFons in last 2 minutes > 0 ? o  The count of payment transacFons in last 3 minutes

> (last 4 week average) x 0.85 ? o  The amount of payment transacFons in last 5 minutes

> (last 4 week average) x 0.85 ? o  The count of payment errors in last 10 minutes

> (last 4 week average) x 0.85 ?

•  At Night - Based on Virtual POS’ses

o  …

Status Quo


ü  Shopping Steps

ü  Card Payment Page (minimalist approach, the maximum informaFon)

ü  SyntacKc and SemanKc ValidaKons

ü  DisKribuKon of Payment Errors

ü  Payment Errors to Display

ü  Payment and Refund Tests

ü  ProacKve Monitoring

New Feature Development ve 4 Check Points


4-‐ Is there a payment problem ?

51

1-‐ Is there a Fraud risk ?

2-‐ Is there a refund problem?

3-‐ Is there an accounKng problem?

Fraud and Chargeback


•  Fraud detecFon, fraud prevenFon and monitoring mechanisms

o  User’s history and profile o  Item’s price o  Online item / offline item o  Payment locaFon, IP address and cookie informaFon o  Other cards used by the user o  Cardholder name surname vs user membership name

surname o  Shipment address vs membership address informaFon o  Payment errors encountered by user o  Payment fail / success staFsFcs of user o  …

Fraud and Chargeback


•  Fraud detecFon, fraud prevenFon and monitoring mechanisms o  Rule sets o  Learning systems o  Data mining considering previous data o  PotenFal risk algorithms

•  Chargeback Flow o  Chargeback request o  The appeals process o  Returning/rejecFng the chargeback request

Security


•  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 informaFon o  PCI – DSS o  Audit o  PenetraFon tests o  …

No Response Payments


Thanks

56

@hakanerdogan

[email protected]

hop://www.odemesistemleri.org

@odemesistemleri


@OpKmistPayment

Online Payment Systems in Turkish E-commerce Market

Technology

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