June 19, 2012
Peter Caparso, president of the North American unit of Dutch e-commerce payments processor Adyen, has some advice for merchants when dealing with their processor: don’t put yourself in a multi-year deal and always be dealing with more than one processor. It may be counterproductive for Caparso if his clients take his suggestions to heart, but, from a merchant’s perspective, he says, it’s the right thing to do.
“All your readers should give me their business,” he laughs, “but always be in contact with a second payments provider. As a business owner that’s how you give yourself the best chance to succeed.”
Adyen grew out of Bibit, another Dutch payments company formed in the late 1990s that had been acquired by RBS WorldPay in 2004. In 2006, Caparso, who had been with RBS WorldPay as the head of its CNP division in the U.S., ran into some of the former Bibit founders who had left the merged company.
The chance meeting lasted much longer than expected and Adyen was born. Having had access to high-level merchants in his position with RBS, Caparso was privy to their pain points and to what they wanted to see. Going with Adyen, he saw, was the right thing to do.
A Global Domain
Bibit, Caparso says, had built its reputation on forming localized connections with European banks that would give its clients not only access to local payment methods, but less expensive access to those methods as well.
Adyen retained Bibit’s focus of providing local payment methods to merchants interested in globalization, but expanded its geographical ambitions. The company has taken its platform (rebuilt by the core team that has been together for 12 years based on the “battle tested” Bibit technology) around the globe, offering local payment methods that Caparso says increase conversion rates.
“Research has found if you offer local payment methods you’ll see a double digit increase in sales,” he notes.
Knowing the proper payment methods to offer in the proper countries is where Adyen’s experience trumps that of other processors, Caparso says.
“Know your audience,” he urges. “Most people know that North America—and to a certain extent, the U.K.—is credit card hungry. But, if you start going into central Europe it’s a different story. Even Germany has only 18 percent credit card penetration. They’ll do bank transfers, direct debit or what have you. But, you have to do the research to know that. You can offer credit cards out there, but you’re going to have mixed results in Europe and elsewhere.”
Currently, Adyen has clients all over North America; Western, Central and Eastern Europe; seven countries in South America (which Caparso calls a “very hot market” for the company) and 10 countries in Asia. He says the company will have a presence in South Africa, Israel, Australia and Japan this year.
“Don’t underestimate global ability,” he says. “Let’s face it, it’s a jobless recovery. People are coming out of it by selling online and they’re selling online globally.”
When Convergence Comes, Be Ready
Adyen launched its platform in 2007, turned a profit at the beginning of 2010 and, according to Caparso, is on target in 2011 to reach 80 to 100 million transactions per year. The company works with midsize to large e-commerce merchants such as Groupon, Lifetime TV, Getty Images, Kodak and PopCap games.
Moving forward, Caparso says mobile is the hot market and a big focus for the processor. He acknowledges that Adyen is talking to “big players,” but won’t disclose those prospects at the moment. Also, the company recently announced it has launched a mobile platform for the iPhone and Android devices.
While mobile is the next logical move for players in the payments industry, though, Caparso is looking even farther ahead to the long awaited convergence of Internet connected devices and television. He cites Google TV as the start of something really big.
“I see this evolving to where you’re collecting data through the TV,” he predicts. “It went to the phone and to the iPad and will eventually reach the set top box. It will keep evolving more and more where we continue taking advantage of these smart components.”
In the meantime, he concludes, smart merchants will do everything they can to be ready for new technologies as they emerge by not locking themselves in to long term payments agreements.
“You should review your deal every year. Things are changing so fast in this marketplace if you’re not on top of it you’re going to be paying the piper.”