This article first appeared in Digital Edge, The Edge Malaysia Weekly on August 26, 2024 - September 1, 2024

E-commerce brought convenience to customers and new avenues for businesses to expand, but it also created many new payment channels that can be difficult to keep track of. Compounding the problem is the fact that many businesses keep the data of their online and in-store customers separate, even if some of the customers use both channels.

Lee Soon Yean, Malaysia country manager of Adyen NV — a payments company listed on Euronext Amsterdam — says this has led to the loss of valuable customer data that could be used for personalised marketing and customer experiences.

Without a cohesive and unified payments platform, by the time this data reaches decision-makers, it could be outdated, no longer relevant, inaccurate or incomplete. Payment platforms such as Adyen provide companies with real-time data to address customer needs in time and unite the various channels so they are informed on their customer base and can make decisions or implement automated systems to capitalise on the data.

“[What businesses are doing] today in terms of payments data is pretty much information in, information out, and it might not be in real time. It’s more of a batch report that they get on a day-to-day basis,” says Lee.

In most situations, businesses work with different partners, he adds. “For example, they will work with an online payment gateway to accept payments on the website, but they also work with the bank [where] they accept payments through payment terminals.”

All these systems feed information in very different ways, creating silos in the recording of payment information for the business.

This causes a situation where if a customer uses the same credit or debit card on two occasions — one in person and the other via an e-wallet that is connected to that same card — the transactions are recorded as coming from two different customers in two separate reports.

So if the business wants to check customer data and retention, there may be discrepancies. In addition, the business may not be able to access the data quickly and accurately.

“[For example,] if I go to Legoland and I buy the tickets online, I provide my email address and my phone number, then I collect my tickets at the counter. Then, when I go into Legoland, I buy a few Lego sets, I buy food, I stay in the hotel, [and all the while] I am tapping my card everywhere. But Legoland doesn’t know it’s the same person because they’re using two different systems,” Lee explains.

Currently, with most businesses, online payments are done via an online payment gateway, while on-site card payments are made via a terminal linked directly to the bank. Both methods adhere to a standard.

“In terms of this global standard, there is the Payment Cards Industry (PCI) Council that’s formed by Visa and MasterCard. These set the standard in terms of how cardholder data can be managed.

“If a payment service provider like [Adyen] were to manage the payments, we would be the one that needs to be PCI-compliant. But having said that, it’s not a one-way thing; [the business employing Adyen] can’t just outsource everything, and they have responsibility over the data as well. So it’s two-way,” says Lee.

Payments companies simplify the client’s role as much as possible.

Typically, businesses work with payment gateways, and these gateways need to work with a risk management system. In turn, the risk management system then needs to work with banks to accept the payments and settle the funds.

“They need to sign three contracts [at least] and work with three different companies and have three different systems to talk to,” says Lee.

While most payment companies currently are still dependent on banks, they have the opportunity to do the functions of all three by having a PCI-compliant license so they are not dependent on banks.

Adyen, for example, can handle all three functions independently through its own acquiring license and in-house developed technology, including a built-in risk management system.

“So the complexity of working with three parties is totally taken out. Everything from end to end is coming through one real-time data feed from us or from the reports that we provide to them.”

The payment firms supply everything the company needs, such as the terminals, methods for accepting payments at the outlet and payment gateways that connect Visa, MasterCard, DuitNow QR codes or e-wallets.

From multiple channels and reports, the platforms provide real-time data with a single report from a single source, providing consistency, risk mitigation and streamlining the decision process.

Lee says the customer data that is put into the system depends on what their partners need, adding that all the data is used either for risk mitigation or actionable data insights.

“Also, [there is] no sensitive data, like 16-digit card numbers; all those don’t exist. We just give the first six or the last four [numbers].”

Now that a customer can unite all the separate systems to access real-time customer data, how can it be used to improve its business?

One of the immediate advantages of real-time data is that it can be used to track store performance, such as by analysing customer traffic and finding growth opportunities. Payment data can also be used in a customer relationship management (CRM) system to track real-time data and offer automated discounts and deals based on a customer’s purchases.

Using the Legoland example, if the operator can identify that the online ticket payment and on-premise transactions are by the same customer and the customer data is being fed back into the CRM system, it can quickly track what kind of customer this individual is.

“The CRM system can trigger a message to the customer saying, ‘thank you for your purchase, here is a 10% discount for your next purchase’, while he is still in the park instead of waiting for him to leave, go home and the next day send a follow-up newsletter saying, ‘here’s a 10% [discount] for your next visit’, which can lead to the customer replying, ‘I’ve just been to Legoland, I’m not going to go there for the next six months’,” says Lee.

He stresses that it is important to act on these insights in real time while the company is still engaging the customer. The real-time data can also be used to unify the online and offline shopping experiences.

Using Singaporean fashion retailer Love Bonito as an example, Lee says that the company started purely as an e-commerce fashion shop but realised that its customers wanted to feel the fabric or try the clothes on.

Love Bonito addressed this by opening a physical store that complements its online business but does not compete with its main online store.

Adyen’s payment gateway processes the online payments while also supplying the terminals, helping Love Bonito’s system to recognise the same customer whether the purchases are done in-store or online.

“It also helped them in terms of pushing all these payment data into their data warehouse, bringing in customer information that provided better insights like what kind of payment methods were popular and how [Love Bonito] can make sure that they’re serving the customers in the right way,” says Lee.

Another benefit of real-time data for company-to-customer relations is transparency. In the event the payment is declined, a business's CRM system can notify the customer and the business of the reason why. While the bank may sometimes inform the customer of the reason, the company is often left in the dark.

“You can [also] actually tell the customer on the spot that this is the reason [for the refusal] … and tell them, ‘Can you ensure that your card has been enabled for online transactions? Can you ensure that your phone number has been registered for a one-time payment?’” he elaborates.

This is important as failure and frustration when finalising a payment can lead to a business losing a customer. With so many choices online, they will just move on to the next merchant.

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