Podcast: Play in new window | Download
Subscribe to our podcast via:
 |
 |
The following is a transcript of the podcast episode
Raymond Pucci – Director, Merchant Services at Mercator Advisory Group
Hi, this is Raymond Pucci, Director of the Merchant Services practice at Mercator Advisory Group, and I’m really pleased to have with us today Ralph Dangelmaier, CEO of BlueSnap. Ralph, thanks for joining us today.
Ralph Dangelmaier – CEO and Board Member at BlueSnap
Thanks for having me, Ray.
Raymond Pucci – Director, Merchant Services at Mercator Advisory Group
What I thought we’d do is talk about some issues of significance to merchants and businesses that deal in e-commerce, especially cross-border, cross-currency transactions. Some research that Mercator has done this past year in our Small Business Payments and Banking survey series has shown that 73 percent of small and medium businesses in the U.S. say that they prefer to deal with one vendor for their payment acceptance processes. Unfortunately, more than 25% of them still deal with multiple payments providers, which causes them undo work and inefficient use of resources. I’m sure, Ralph, that’s something that you’re hearing from merchants and businesses. How do you respond to that?
Ralph Dangelmaier – CEO and Board Member at BlueSnap
Well Ray, it’s a great point and good research. We do hear it all the time and that really drove us to improve BlueSnap’s product and approach to the market by allowing merchants to connect at one spot so they could more easily sell around the world. What do we mean by that? Well, I actually think that merchants when they say 25%, they may actually be meaning 25% to a payment processor. It may not include the connections they have to build to risk or the connections they have to build to things like Apple Pay or maybe PayPal. So what we thought was the best thing for the merchants was to allow them to connect to one platform to allow them to sell locally to as many countries as they can. We support somewhere around 65 different countries on five major continents. And so that allows them to easily plug into our platform and sell across borders and that’s also pre-integrated to things like fraud management, wallets, alternative payment types, and different currencies locally.
Raymond Pucci – Director, Merchant Services at Mercator Advisory Group
I know that as merchants are expanding, different businesses are looking for new markets, and foreign markets are an especially attractive area for them. So that’s something that I think your services fit into as well.
Ralph Dangelmaier – CEO and Board Member at BlueSnap
When we talk to merchants, two problems seem to persist. One you’ve already mentioned that they run into is integrating to multiple payment providers. Some people use the generic term “payment gateway.” If they connect to a gateway, they still need to connect to or find a bank that they can process with since not as much of that is as integrated as they would like. Or we run into the other problem where they actually have one provider and it’s maybe in the country where they’re domiciled – let’s say the United States – but they also have legal entities in Australia and let’s say the United Kingdom, and they’re not taking advantage of the ability to process locally say in Australia or in the U.K. or E.U. So their fees are higher because of the cross-border charges and they’re actually reducing their sales because declines are higher because they’re sending those transactions originating Australia over to United States for processing instead of staying in Australia. And so the declines get higher. So effectively the merchant’s got two problems: (1) They’re reducing their sales, and (2) they’ve just increased their costs. I can’t imagine any merchant that’s selling abroad doesn’t want both of those things to change. They want to increase sales and reduce costs. That’s the goal. So two flavors of this: (1) they’ve already connected to multiple gateways and they’re having trouble maintaining them all, or (2) they’ve connected to one and they’re really doing a poor job executing their cross-border sales.
Raymond Pucci – Director, Merchant Services at Mercator Advisory Group
Exactly. I was thinking also from the discussions that I have as well with different businesses and merchants that this is across different verticals – not only product or merchandise related businesses but also digital services and subscriptions, things of that nature, digital marketplaces. I suppose you’re seeing the same thing, that there’s a demand out there across all verticals. Is that the case?
Ralph Dangelmaier – CEO and Board Member at BlueSnap
Oh, yes, Ray. That’s a really good point. It’s interesting. We get asked a lot of times, “What verticals do you support?” I don’t really like that question because I think all verticals need this. And I think it’s a legacy thing. A lot of ISOs (independent sales organizations) supported certain verticals because maybe they built integrations of those verticals, but all of them need it and we’re seeing big traction across all verticals whether it’s business-to-business, B2B, or business-to-consumer, B2C. I think this concept of only supporting certain verticals goes away in the new world, and these platforms are what I’m going to call vertical independent.
Raymond Pucci – Director, Merchant Services at Mercator Advisory Group
We’ve been spending a lot of time here at Mercator on mobile payments research and insight. Mobile payments, which I’d like to touch upon very briefly, are now approaching 50% of all e-commerce. What’s your take on the ability to provide more friction-free shopping and transactions using mobile devices?
Ralph Dangelmaier – CEO and Board Member at BlueSnap
Well, we have been on the mobile bandwagon here at BlueSnap for at least three or four years. We always say it’s global and it’s mobile. I think a couple things that set the stage for it: (1) Amazon, Netflix, Shopify, point-and-click have really made it seamlessly easy to buy on your device, and along with that has come (2) the Google Pay and Apple Pay and PayPal and all the wallets, Alipay around the world. Consumers are really keen on buying on their mobile device. So I think those two things set the stage for global and mobile and now and I’m sure you’ve seen the new Apple devices and the new Samsung devices. I mean this phone (I just got a new one) cost more than my computer. And so with the technology that’s in that allows it even more clarity and easier to pay with your phone. I just think most of e-commerce is going to be done on the phone in the next five years. It’s now 50/50 and I don’t see how it doesn’t grow. So we’re really encouraging our merchants to use the tools that allow them to compete with the way the shopper is thinking, which is “How am I going to compete with Amazon and Netflix or things like that when all I want to do is just a one-click buy?” So I think your research is spot on, and I bet that trend continues over the next few years.
Raymond Pucci – Director, Merchant Services at Mercator Advisory Group
That’s right, Ralph, and especially as you’re saying with the improved technology of mobile device screens, and of course more real estate on the screen to allow the shoppers and B2B of course to more easily make transactions and take care of the business at hand. I’d like to mention that last week, and I know you were there as well, Ralph, I attended Money 20/20 and I know that it was an announcement that you made related to a partnership agreement of BlueSnap with First Data and Bank of America Merchant Services. So I thought I’d just ask you to expand upon that a little bit in case there are some people out there who were not aware of the announcement last week.
Ralph Dangelmaier – CEO and Board Member at BlueSnap
Yes, we had a very busy Money 20/20, and we made a couple significant announcements. One is that First Data has used our product for its partners who are reselling First Data services. We built a very seamless integration into First Data as we’ve done with other acquirers. So it’s extremely easy for merchants and ISVs (integrated software vendors or providers) to use BlueSnap to sign up their merchants or for merchant to come direct. So that was a significant announcement. Following that immediately afterwards was that Bank of America Merchant Services was interested in having a better product to offer particularly what we call the underserved middle market. So they announced that we’re live and processing merchants that are both clients of Bank of America and Bank of America Merchant Services. A pretty significant event. It’s one of the first times in what I’m going to call the modern era that an entity or joint venture like Bank of America Merchant Services will now be reselling another e-commerce provider, that being BlueSnap. One of the big drivers for them was exactly what this podcast is about, which is about how do you service the cross-border community in their middle market, and how do you deal with the growing demands of mobile? And since we’ve designed our product really globally and mobiley. It was a perfect fit for what they were trying to service on their clients. So we’re excited about this partnership. Bank of America Merchant Services has got a great group of people there and we’re already off to a big start just in the last few weeks. So thanks for asking.
Raymond Pucci – Director, Merchant Services at Mercator Advisory Group
Thanks for that expansion of what the announcement was about and we’ll certainly be watching that with great interest in the weeks and months ahead.
Ralph Dangelmaier – CEO and Board Member at BlueSnap
Well, thanks very much, Ralph. And again, this has been Raymond Pucci of Mercator Advisory Group’s Merchant Services practice along with Ralph Dangelmaier, CEO of BlueSnap
Subscribe to our podcast via:
|
|
