By: David Nunn, Head of Braintree Europe
Companies are switching their gears in ecommerce.
They’re starting to move beyond just their familiar web presence and engaging consumers wherever they happen to be spending their time, whether that’s on a social media platform, a news publication, or just about any other popular website or app they use.
Users can buy from the same company in a variety of different places digitally. It’s rewarding to the company to be flexible in how it sells, and it’s empowering for the consumer to choose where they want to spend their time and money. So, a significant trend is emerging– how brands and platforms work together will define the most enduring commerce experiences of the future.
Partnerships can take many forms, and new ones are being created every day.
Tight orchestration and collaboration could mean partnering with a payments service provider, a rewards platform, a social platform, a content platform, or even with other merchants. In any of these cases, synergistic partnerships can heighten the user experience and gain the business a big strategic advantage.
However, when just one negative app review can cost businesses users and a single security error could mean a not insignificant GDPR fine, how do businesses balance the dilemma between customer experience and information security? Experience needs seamlessness and convenience, while security demands rules and boundaries. How do retailers and platforms navigate those when losing one or the other could mean losing customers, revenue and their reputation?
Merchants seeking to deliver a seamless experience are all-too-often held back by the question of payment sharing i.e. how to do it as seamlessly and securely as possible. To approach this problem, we have to unpack what makes partnerships work. Firstly, each party usually has something the other needs: Ticketmaster has paying customers while Facebook has unrivalled reach, for example. But also, each party needs to access highly sensitive payment information without adding risk. Add to this that neither particularly want to take on new risk, nor to build from scratch the infrastructure that could handle the exchange of secure, tokenised payments data.
In today’s highly competitive markets, businesses are better off focusing their resources on selling their own product or service rather than also building highly technical, compliant and heavily customisable technology and infrastructure. As a result, while many companies are eagerly pursuing more integrated experiences with partners, more and more wish to move away from the tricky territory of handling their customers payment information directly.
From the need to deliver new commerce experiences and reward schemes to the promise of extending to new markets, there are so many examples where payment sharing will be critical.
For instance, transaction processing needs to be enhanced on the back end to help merchants manage complexity in their environment. This could include unifying disparate payment systems, working with specialised fraud-service providers, or dual-vaulting a user’s payment information for increased availability and redundancy. Companies such as Vivid Seats connect with a fraud detection partner that specialises in ticketing, while Monoprice uses a central vault and then mirrors that data in a secondary vault for backup. This creates high availability and redundancy to maintain stability.
Rewards and loyalty programs drive user engagement and customer stickiness, but it can be a burden to develop the engineering and business processes around them. For greater efficiency, businesses can partner with rewards platforms, online-to-offline commerce platforms, and even directly with card networks to provide cash-back or card-linked offers. The user’s card details act as the consumer identifier, and merchants can securely share this on the user’s behalf so that purchases can be appropriately tracked and rewards accrued. An example of this is Yelp Cash Back, Yelp’s card-linked loyalty program in the US. Used across thousands of businesses, users register with Yelp and receive real-time cash rebates at the point of sale when eating out and shopping with participating businesses.
Contextual commerce, where retailers relevantly surface in the contexts their audiences are already spending their time in, is starting to drive considerable value for users and retailers. Businesses are partnering with other merchants and platforms to help enable users to purchase directly on new channels, the places they first discover products and services. In many instances, the discovery platform acts as an aggregator, provides content, and owns the checkout experience, but may not wish to take on the work or liability of post-purchase activities and fulfilment. Similarly, businesses themselves want to own the direct relationship with the consumers they’ve attracted via third-party channels rather than risk losing them to the friction-filled experience of click-throughs and redirects.
For instance, Bandsintown, a music artist-and-performance-discovery platform, connects to various ticketing companies letting users discover and select shows, and purchase tickets end-to-end without leaving the Bandsintown platform. Meanwhile, Skyscanner, the popular metasearch engine and price comparison tool, created its direct-booking platform on top of Braintree Extend, where Skyscanner hosts and controls their entire checkout experience and yet simultaneously securely connects multiple airlines and partners to complete the checkout. Finally, Slickdeals, a leading deal community and shopping platform, created its own end-to-end direct checkout experience to engage with users while helping to increase conversion for their connected merchants.
No matter where the checkout begins, consumers today demand effortless commerce experiences, which requires fast, secure and convenient payment completion. Starting with transactions, loyalty/rewards and contextual commerce system as a launchpad, a strong payment infrastructure can enable partnerships to thrive. In fact, rather than being a cause for concern, it can unlock business’ abilities to innovate and light up new use cases that the digital commerce world has never before seen.
David Nunn is the head of Braintree Europe, since 2013. He is passionate about company culture, payments optimisation, and finding solutions to power businesses’ growth. David is responsible for Braintree’s growth across Europe. Braintree, a PayPal company, is an industry-leading online and mobile full-service payments platform powering the best-in-class next-generation purchasing experiences globally.
Sunak warns of bill to be paid to tackle Britain’s ‘exposed’ finances – FT
(Reuters) – British finance minister Rishi Sunak will use the budget next week to level with the public over the “enormous strains” in the country’s finances, warning that a bill will have to be paid after further coronavirus support, according to an interview with the Financial Times.
Sunak told the newspaper there was an immediate need to spend more to protect jobs as the UK emerged from COVID-19, but warned that Britain’s finances were now “exposed.”
UK exposure to a rise of one percentage point across all interest rates was 25 billion pounds ($34.83 billion) a year to the government’s cost of servicing its debt, Sunak told FT.
“That (is) why I talk about leveling with people about the public finances (challenges) and our plans to address them,” he said.
The government has already spent more than 280 billion pounds in coronavirus relief and tax cuts this year, and his March 3 budget will likely include a new round of spending to prop up the economy during what he hopes will be the last phase of lockdown.
He is also expected to announce a new mortgage scheme targeted at people with small deposits, the UK’s Treasury announced late on Friday.
Additionally, the government will also announce a new 100 million pound task force to crack-down on COVID-19 fraudsters exploiting government support schemes, it said.
(Reporting by Bhargav Acharya in Bengaluru; Editing by Leslie Adler and Cynthia Osterman)
G20 promises no let-up in stimulus, sees tax deal by summer
By Gavin Jones and Jan Strupczewski
ROME/BRUSSELS (Reuters) – The world’s financial leaders agreed on Friday to maintain expansionary policies to help economies survive the effects of COVID-19, and committed to a more multilateral approach to the twin coronavirus and economic crises.
The Italian presidency of the G20 group of the world’s top economies said the gathering of finance chiefs had pledged to work more closely to accelerate a still fragile and uneven recovery.
“We agreed that any premature withdrawal of fiscal and monetary support should be avoided,” Daniele Franco, Italy’s finance minister, told a news conference after the videolinked meeting held by the G20 finance ministers and central bankers.
The United States is readying $1.9 trillion in fiscal stimulus and the European Union has already put together more than 3 trillion euros ($3.63 trillion) to keep its economies through lockdowns.
But despite the large sums, problems with the global rollout of vaccines and the emergence of new coronavirus variants mean the future path of the recovery remains uncertain.
The G20 is “committed to scaling up international coordination to tackle current global challenges by adopting a stronger multilateral approach and focusing on a set of core priorities,” the Italian presidency said in a statement.
The meeting was the first since Joe Biden – who pledged to rebuild U.S. cooperation in international bodies – U.S. president, and significant progress appeared to have been made on the thorny issue of taxation of multinational companies, particularly web giants like Google, Amazon and Facebook.
U.S. Treasury Secretary Janet Yellen told the G20 Washington had dropped the Trump administration’s proposal to let some companies opt out of new global digital tax rules, raising hopes for an agreement by summer.
“GIANT STEP FORWARD”
The move was hailed as a major breakthrough by Germany’s Finance Minister Olaf Scholz and his French counterpart Bruno Le Maire.
Scholz said Yellen told the G20 officials that Washington also planned to reform U.S. minimum tax regulations in line with an OECD proposal for a global effective minimum tax.
“This is a giant step forward,” Scholz said.
Italy’s Franco said the new U.S. stance should pave the way to an overarching deal on taxation of multinationals at a G20 meeting of finance chiefs in Venice in July.
The G20 also discussed how to help the world’s poorest countries, whose economies are being disproportionately hit by the crisis.
On this front there was broad support for boosting the capital of the International Monetary Fund to help it provide more loans, but no concrete numbers were proposed.
To give itself more firepower, the Fund proposed last year to increase its war chest by $500 billion in the IMF’s own currency called the Special Drawing Rights (SDR), but the idea was blocked by Trump.
“There was no discussion on specific amounts of SDRs,” Franco said, adding that the issue would be looked at again on the basis of a proposal prepared by the IMF for April.
While the IMF sees the U.S. economy returning to pre-crisis levels at the end of this year, it may take Europe until the middle of 2022 to reach that point.
The recovery is fragile elsewhere too. Factory activity in China grew at the slowest pace in five months in January, and in Japan fourth quarter growth slowed from the previous quarter.
Some countries had expressed hopes the G20 may extend a suspension of debt servicing costs for the poorest countries beyond June, but no decision was taken.
The issue will be discussed at the next meeting, Franco said.
(Additional reporting by Andrea Shalal in Washington Michael Nienaber in Berlin and Crispian Balmer in Rome; editing by John Stonestreet)
Bank of England’s Haldane says inflation “tiger” is prowling
By Andy Bruce and David Milliken
LONDON (Reuters) – Bank of England Chief Economist Andy Haldane warned on Friday that an inflationary “tiger” had woken up and could prove difficult to tame as the economy recovers from the COVID-19 pandemic, potentially requiring the BoE to take action.
In a clear break from other members of the Monetary Policy Committee (MPC) who are more relaxed about the outlook for consumer prices, Haldane called inflation a “tiger (that) has been stirred by the extraordinary events and policy actions of the past 12 months”.
“People are right to caution about the risks of central banks acting too conservatively by tightening policy prematurely,” Haldane said in a speech published online. “But, for me, the greater risk at present is of central bank complacency allowing the inflationary (big) cat out of the bag.”
Haldane’s comments prompted British government bond prices to fall to their lowest level in almost a year and sterling to rise as he warned that investors may not be adequately positioned for the risk of higher inflation or BoE rates.
“There is a tangible risk inflation proves more difficult to tame, requiring monetary policymakers to act more assertively than is currently priced into financial markets,” Haldane said.
He pointed to the BoE’s latest estimate of slack in Britain’s economy, which was much smaller and likely to be less persistent than after the 2008 financial crisis, leaving less room for the economy to grow before generating price pressures.
Haldane also cited a glut of savings built by businesses and households during the pandemic that could be unleashed in the form of higher spending, as well as the government’s extensive fiscal response to the pandemic and other factors.
Disinflationary forces could return if risks from COVID-19 or other sources proved more persistent than expected, he said.
But in Haldane’s judgement, inflation risked overshooting the BoE’s 2% target for a sustained period – in contrast to its official forecasts published early this month that showed only a very small overshoot in 2022 and early 2023.
Haldane’s comments put him at the most hawkish end among the nine members of the MPC.
Deputy Governor Dave Ramsden on Friday said risks to UK inflation were broadly balanced.
“I see inflation expectations – whatever measure you look at – well anchored,” Ramsden said following a speech given online, echoing comments from fellow deputy governor Ben Broadbent on Wednesday.
(Editing by Larry King and John Stonestreet)
Sunak to give UK Infrastructure Bank £12 billion of capital in budget
LONDON (Reuters) – British finance minister Rishi Sunak is expected to announce an initial 12 billion pounds of capital and...
Robinhood plans confidential IPO filing as soon as March – Bloomberg News
(Reuters) – Online brokerage Robinhood, at the centre of this year’s retail trading frenzy, is planning to file confidentially for...
Wall Street Week Ahead: Investors weigh new stock leadership as broader market wobbles
By Lewis Krauskopf NEW YORK (Reuters) – A shakeup in stocks accelerated by the past week’s surge in Treasury yields...
SoftBank reaches settlement with former WeWork CEO Neumann
(Reuters) – SoftBank Group Corp said on Friday it has reached a settlement with WeWork’s special committee and the company’s...
Sunak warns of bill to be paid to tackle Britain’s ‘exposed’ finances – FT
(Reuters) – British finance minister Rishi Sunak will use the budget next week to level with the public over the...