PayPal focuses on trust, choice, ease, and approvals


Your payment experience may seem to go smoothly. You’ve found what you’re looking for, clicked “pay” or put your credit card at the point of sale. Your bank, in turn, approves the transaction.

Then nothing.

Something in the process goes down and your transaction fails. Whether you’re shopping online or waiting in line at the grocery store, the experience can be maddening.

It happens too often. Legitimate customers verify using cards they know are good, but charges are denied – or worse, the order goes through first, then is subsequently canceled without a clear explanation. As consumers, we prefer not to ask ourselves why: we just want to get on with our day. But more often than not, a failure in the card authorization flow is to blame.

Darrell esch, senior vice president and general manager of Venmo and head of cash registers at Pay Pal, spends a lot of time thinking about faulty authorization flows so that customers don’t have to. He calls it a “broken link in the customer journey,” which can lead to the chain breaking at checkout. To successfully combat it, PayPal relies heavily on massive amounts of transaction data.

“[Data] ultimately helps us make the best yes / no decision, based on all [our] experience the likelihood that a deal is good, ”he said in an interview with Karen Webster of PYMNTS. “At the end of the day, you want to say ‘yes’ as much as you can. Customers end up feeling alienated if you tell them ‘no’ when it was a good transaction.

Pointing to recent studies concluding that PayPal outperforms other platforms by up to six percentage points in terms of approval ratings, he said this was “based on all that experience and the artificial intelligence we have. For every hundred trades made, the possibility of getting maybe six more at the finish line is very important. ”

Authentication at checkout is a major dividing line, and businesses are rightly strict about it. In the ‘Monetizing Digital Intent’ study, a PYMNTS and Neuro-ID collaboration, nearly 40% of companies said adoption of digital authentication solutions is an urgent priority today, with 35% of companies saying that existing digital processes too often choke check.

Get the Study: Monetizing Digital Intent

Data and Risk-Return Decision Making

Noting the many reasons good transactions go wrong – from over-detection of fraud to errors with payment processors and more – Esch said it was about controlling variables.

“I’m thinking of four variables that are really important in driving conversion, namely trust, choice, ease of use and deal approval. Authorization is only a step, ”he explained.

Calling for further streamlining of processes in all areas, Esch told Webster, “For transaction approvals, one of the things you can do as a retailer to drive conversion is get a brand of trust. right from the start of your pages, so customers know how they’ll be able to pay.

“The approval of transactions is a difficult and long-learned path,” he added. “It is very tempting to compose [and] relax your approval standards to attract more customers. But the flip side is that every time you go wrong and a fraud happens, you have to get lots of good trades to make up for the bad ones. It’s better to rely on the data for more decisions, he said. “Data manages so much, so much,” he noted.

Beyond a thumbs-up or a thumbs-down from a sender on a transaction, Esch said data eliminates more friction during payment by reading signals from IP addresses to device data, etc.

“At the end of the day, it balances out trying to get as many approvals as possible while dealing with fraud out of the system,” he said. “At PayPal, in every transaction, hundreds of patterns are executed, using hundreds of thousands of variables to make the right risk-reward decision that leads the retailer to the best outcome with the highest approval rates and minimized fraud. . “

See also: PayPal, Wix Team on Pay Later offers for merchants

Repair cart abandonment with confidence, choice and ease

Because trust is vital in every payment scenario, said Esch, “who the payment provider is will make a big difference” when it comes to payment.

“At our scale of $ 1.2 trillion in [payments] volume over the past year, the fact that these patterns and learnings are happening in real time in every trade will benefit the trader, ”he explained. “This is something that a retailer is unlikely to develop, design and master on their own. This is a case where it is better to provide help.

After trust – or perhaps right next to it – comes the choice of payments.

“Customers want a choice of how they are going to pay, so it’s easy for merchants to make sure they’re maximizing that choice,” Esch said. “It’s tempting to want to just save that credit card so you can make a quick payment next time, but if the consumer can’t use that card for some reason or doesn’t want to use that card, it ends up creating more friction.

This is one of the reasons why options like Buy Now, Pay Later (BNPL) are so popular – and PayPal gets it. Esch noted that PayPal’s Black Friday 2021 was up nearly 400% year-over-year on buy now, pay later, with about 750,000 transactions “on this single day.” He added that PayPal is “bringing longer installment plans to market here in 2022”.

The platform also enables more password-less transactions that recognize known and trusted customers “earlier in a transaction flow.” We’re always struggling with latency, taking milliseconds out of transactions. Each of those milliseconds ends up counting. Then we continue to incorporate our models.

Esch noted that it is both difficult and expensive to get customers to buy from a brand’s website, so the last thing they want is to lose what they worked so hard to get. at the very end – and there is also the time wasted by the consumer who took the time to fill his basket.

“It has been reported that up to three out of four carts are ultimately abandoned. This whole process of operating payment systems will mean a lot to the bottom line of retailers. “

See also: PayPal sees BNPL spending increase for Black Friday



On: Forty-four percent of UK grocery shoppers spend more in grocery stores when they have access to loyalty programs, and an equal share say the presence of loyalty programs alone dictates where they shop. What UK consumers expect from their grocery shopping experiences surveyed 2,501 UK consumers to examine how retailers can make the most of loyalty programs to increase spending and gain new customers.


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