Adyen and Mobile Payments

The first modern credit card was Diners Club. It was paper and was issued to 200 people in New York City in 1950. By 1951, there were 20,000 cards in circulation. The payment industry was born.

Credit cards made buying stuff easier and safer. They transformed how we shop, first in stores, then online and now on our phones.

The introduction of e-commerce and mobile commerce are like the industry equivalent of the big bang. As customers want more and want it faster, the only obstacles to this expansion are security and infrastructure.

Today, we still buy things in physical stores, but we now have the luxury of shopping online, via our mobile phones, PCs and tablets. Merchants want to expand and push into the vast wilderness that is consumers-on-the-go using multiple devices to make purchases, so they need to offer options for online and mobile payments.

But the paradox is that a lot of work goes into making online payments as frictionless as possible. The catch-22 is that merchants have a lot to worry about when they take your credit card, the biggest issue being Payment Card Industry (PCI) Compliance, which officially came on the scene in 2006. PCI Compliance is simply adherence to a set of specific security standards developed to protect card information during and after a financial transaction. It’s required by all card types (ATM, debit, credit and POS) and all merchants that want to let you use a credit card to buy something must comply.

PROMOTED

PCI compliance is good for consumers because it protects our sensitive data and we are good at creating data. Let’s put that date into perspective:

In 2009, credit cards were responsible for more than $2.5 trillion in transactions a year and were accepted at more than 24 million locations in more than 200 countries and territories. (Source: American Bankers Association, March 2009)

An estimated 10,000 payment card transactions are made every second around the world. (Source: American Bankers Association, March 2009)

Credit card data has grown in significance because of the proliferation of online and mobile purchases that can now be made. Consumers don’t like it when their data gets stolen, it’s a matter of trust. And merchants need to deliver that trust to you, their customers. This point has recently been emphasized with the recent security breaches at Sony and Sega.

Swedish internet visionary and CEO of Mindpark, Joakim Jardenberg, says we live in a world where trust, penetration and volume are everything.

And this is where Adyen comes in. Adyen is a mobile payment solutions company, managing the new international payment complexity and PCI Compliance for merchants that accompanies how we purchase and pay today. With Adyen, merchants can focus on expanding their global reach by giving customers more options for online and mobile payments and keeping their credit card data safe.

Founded in Amsterdam and operating across six continents from both Amsterdam and Boston, the financially sound start-up is proving that first generation banks like Chase and Royal Bank of Scotland (RBS) cannot deliver a global payments platform that performs to meet the diverse payment needs of today’s global e-commerce market.

Adyen, despite being led by a tenured team of banking and finance gurus from Royal Bank of Scotland (RBS), Bibit, and Rabobank, doesn't like to call itself a payments company, but rather a tech company that specializes in global payments. Driving their developers to stay one step ahead on the technology front, Adyen constantly focuses on innovation, which they believe their larger counterparts can not do.

With Adyen, the look and feel of the payment page is from the merchant’s perspective. You don’t click to pay and then see a third-party page appear. One click payment – giving peace of mind to both the merchant for PCI Compliance and the consumer who trusts the merchant and the brand. But more than that, Adyen has the potential to follow the merchant across their sales channels, devices and geographies with an optimized solution for all channels, not just mobile or online.

Peter Caparso, Adyen President, North America, puts trust into perspective. “Trust goes down when you click away from the merchant page. The global recession melted trust, but now that we are in a recovery, merchants are ramping up to create new payment methods to reach out to consumers and push into new territory. Merchants need to grow and they need to trust the company that helps them do that.”

But confidence and trust are also cultural. In 2009, Caparso says Adyen saw a different level of confidence in outsourcing payment solutions by geography. In the US, most merchants didn’t want to lose access to consumers, i.e. outsource the payments to a third party despite the fact they could still retain their own brand. In fact, Caparso says that in 2009, 95% of all US customers preferred NOT to outsource payments as opposed to Europe, which was only 20%. Today in 2011, the numbers are dramatically different, with only 15% of the US customer based choosing not to outsource and Europe down to a mere 5%.

The real eye opener for Adyen was airlines. Their first airline, Chilean Airlines, chose to outsource their payments solution this year and was a key indicator that Adyen's technology and service platform matched the payment requirements in Latin America.

Adyen is quite pragmatic. They claim their innovation is due to closely following their merchants and what they are offering to their merchants. Knowing your customer, creating trust within the confines of a highly technological virtual world.