The user experience at the time of purchase is everything," repeats like a mantra the head of Mercado Pago, Gustavo Degeronimi. This Mercado Libre platform, similar to Paypal, but which allows paying with local credit cards in one payment or in installments, was launched in Uruguay less than three weeks ago and has already been used in 30% of the purchases made on the site.
This is a record adoption rate, according to Degeronimi, since in other markets, such as Argentina, Brazil, Chile, Colombia, Mexico, Venezuela and Peru - where the platform already operates - it took seven months to reach an adoption rate of over 10%, something that was achieved in Uruguay in seven days.
According to El Perfil del Internauta Uruguayo, 36% of e-commerce transactions are purchases in Mercado Libre.
The platform solves one of the main problems of Uruguayan e-commerce, as the president of the Digital Economy Chamber, Marcelo Montado, readily admits. While Mercado Libre's service allows credit card data to be saved and payments to be processed from the same site, Uruguayan e-commerce companies have to settle for referring consumers to the sites of the seals (Visa, Oca, Master Card, Diners, among others) and asking for data to process payments over and over again.
Not only does that result in a poor experience that leads to low conversion rates, according to Montado, but it also leads to other problems that make it difficult for e-commerce to take off.
According to the president of the Chamber of Digital Economy, the problem lies in the impossibility of local sites, or payment gateways such as Pagos Web and Cobros Ya (companies that integrate the various seals on the merchant's website) to store sensitive card data, something that can only be done by those who have the PCI certification (Payment Card Industry Security Standards) required by the international card council, and whose cost starts at US$ 200 thousand but can easily exceed US$ 1 million, depending on the size of the site.
The seals say that e-commerce sites should pay for such certification to improve their web experience; merchants, meanwhile, argue that they cannot do so and ask the seals to improve their platforms to make them more user-friendly.
But how important is it to pay on the e-commerce site itself? The head of Mercado Pago is categorical: "Every extra click makes it difficult to complete the purchase". He assures that "many people stop buying because they get tired in the middle, or because the TV show they like started, and for a thousand other reasons".
At Mercado Pago (which is PCI-certified), users upload their card information once and then can buy again with a single click. For Degeronimi, this "is the difference between closing a transaction on the bus or the customer postponing it for when they get home and ending up not buying at all.
When online is complicated
Beyond the user experience, relying on stamp platforms creates other problems for e-commerce. For example, because the data is loaded off-site, directly into the seal, e-commerce cannot know which bank's card was used to pay. For this reason, promotions for bank customers, which are commonplace in traditional commerce, face a technical limitation in online commerce.
The director of Pagos Web, Carlos Caetano, said that for some customers "it is much better to buy in physical commerce because they have a discount that does not exist on some websites". According to Café & Negocios, the sites that offer such benefits have no way to automatically verify that it was paid with a card of a particular bank, so they must carry out manual processes that make the task of maintaining an e-commerce site more difficult.
Meanwhile, the financial manager of Visanet Uruguay, Juan Carlos Grosso, said that Visa will include "in the very near future" the possibility of recognizing the card so that merchants can offer such promotions more easily. Another operational problem suffered by e-commerce is the impossibility of making automatic refunds. As explained by the Service Manager of the payment integrator Cobros Ya, Juan Carlos Corazzo, "if a customer buys a product or service and, for whatever reason, the store can not deliver it, the cancellation of this transaction is manual, from the seal's website or through an email, but requires that there is a person processing the cancellation, which, although it is immediate and the customer does not know," is a higher cost for trade.
Little, but growing
According to the latest survey of the Profile of the Uruguayan Internet user, prepared by Grupo Radar and published last week, during the last year almost 1.3 million Uruguayans (66% of Internet users over 18 years old) made a web purchase.
This data, which Grupo Radar arrived at from a sample, estimates that e-commerce moves US$100 million a month. However, it is difficult to know how much of this is processed through local cards.
This includes payments on foreign sites (Amazon, Ali Express and Ebay are the favorites), or services that although consumed in Uruguay, are processed outside the country (such as Uber, Netflix, among others). In turn, cards participate in 45% of online payments.
Moreover, considering that e-commerce is only 3% of total commerce, the importance of this incipient industry for the labels is even lower.
However, the financial manager of Visanet Uruguay said that compared to last year, 78% more transactions were recorded. That label made an agreement with PedidosYa! that allowed the delivery site to offer payments through its platform (see separate).
OCA's head of technological business, Pedro Carriquiry, said that 6.5% of OCA's transactions are e-commerce transactions. OCA recently launched a hybrid credit card that in Uruguay operates under its own seal and abroad with MasterCard seal. 50% of transactions abroad are face-to-face and the other 50% are in e-commerce, Carriquiry added.
Meanwhile, the manager of Establishments and Marketing of First Data (MasterCard, Diners and Líder), Diego Fava, excused himself from giving data on the number of online transactions, but said that "there is an explosion of requests" to use the seal in e-commerce channels. He considered that online payments "ceased to be a trend, something that is coming, to be something that is consolidating".
Asked if the labels are paying attention to e-commerce, he stressed: "For us it is no longer a trend. If the attention didn't exist, now it does". Integrators and Mercado Pago.
Both Oca, First Data and Visa Net agree on one thing: Uruguayan e-commerce must become PCI certified. Given the high cost for the stores, the hope is placed in payment integrators, such as Pagos Web or Cobros Ya. Currently, several of these companies, which are in charge of implementing the software necessary for a purchase button to exist, are working on this certification.
Caetano, whose company Pagos Web will be PCI in 2017, explained that once they are certified they will be able to offer e-commerce sites that hire them a payment experience similar to that offered by sites like Amazon.
In turn, starting next year, Mercado Pago will allow this service to be included in sites outside the Mercado Libre ecosystem, similar to the way Paypal is used. In this way, non-PCI sites will be able to offer a similar payment facility, Degeronimi explained.
With the ability to move the needle
For the president of the Chamber of Digital Economy, Marcelo Montado, Mercado Pago will be "a huge dynamizer of electronic commerce" as Paypal was in the United States.The manager of Establishments and Marketing of First Data said that in the first days of Mercado Pago, the activity "exceeded expectations", although he refused to give specific data.Meanwhile, the head of Technology Business of OCA estimated that the impact of Mercado Pago can not yet be measured, but "undoubtedly will move the needle". In the same vein, Visa Net said that this platform will be a "facilitator" of electronic commerce.
The Visa and Order Now Experience
Since July of this year, PedidosYa! offers payments through Visa and Edenred credit cards. On this platform, users enter their credit cards directly on the seal's portal, but they don't have to do it again every time they want to make a purchase.
This modality, although it is not like PCI, is a technological leap compared to what other e-commerce sites do, which Visa Net described as "pioneering". Currently, 15% of orders placed on the platform are paid directly with Visa cards and Edenred (Ticket Alimentación), and 75% are made through mobile devices.
According to Federica Hampe, head of Communications and Branding at PedidosYa!, 400 establishments, half of the restaurant base at PedidosYa, offer online payment to their users. Uruguay was the first market to implement this service, which has now been launched in Brazil, Argentina and Chile. Hampe said they will soon include more seals on the platform.
Source: The Observer
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