Mihails Safro, xpate CEO: Tips sellers need to know to overcome compliance obstacles
The unprecedented growth of e-commerce changed shopping dramatically last year. Many sellers suddenly faced a rapidly growing number of customers who had to stay home during the lockdown. When some clients adopted Netflix and Spotify as part of a daily routine, others ventured into online business. Robinhood alone saw a whopping 6 million rise in user numbers in 2 months.
Merchants were happy, they welcomed the trend. Yet, the surging demand caused apps and sites to crash, leaving consumers unsatisfied enough to abandon their accounts, a perfect example of an abrupt loss of customers’ trust.
The story has a moral – the lack of flexibility and optimisation can significantly affect any e-commerce niche. A fantastic customer experience is critical. However, sellers face many struggles even before the consumer gets to the onboarding phase. Without proper guidance, a seller will enter the spiral of endless legal issues that can eventually take a toll on the business.
Every market has its own rules that business has to abide by. Thus, every seller will drive right into the same old thing – getting a license. If a local license is paramount, the seller’s best bet will definitely be a local acquirer. After all, licensing costs account for 30% of the total expenditure. That’s why it’s crucial to do everything right on the first try.
Once the license is granted, make sure you have enough of an admin skill set to keep up with renewal deadlines, regulations or verification obligations. If renewal d-day has passed or the license was revoked, you’ll face a massive headache and potential business failure.
Once your license is approved, you can sign up with an acquirer. However, it might not be easy. Strict acquirers can demand a ton of papers, such as Proof of ID, ownership certificates, and transaction history for at least the past six months.
Every acquirer imposes its own conditions. In most cases, to be considered a processor, a seller must have at least £/€500 worth of card transfer value alongside £/€20,000 in monthly revenue. An alternative might be a high number of smaller payments with a chargeback ratio of 0.7-0.9% of the total transfer amount. Yet, if the ratio surpasses 1%, the account can be locked or annulled. Consequently, that means a sunset for your e-commerce enterprise – without an option to accept payments, all operations get halted.
Need proper customer onboarding? Implement best UX practices.
The seller who finally accomplished the above and got the license shouldn’t rest. The final struggle is the most energy-consuming – user acquisition and onboarding.
Prospective clients need to sign up. They demand straightforward and fast processes, such as quick identity check, KYC authentication, and instant phone or email confirmation. If the entire procedure is complicated, time-consuming or poorly designed, don’t expect user acquisition to skyrocket. Imagine the stress the seller gets from doing all the hard work and seeing customers running away due to an unoptimised user experience.
Every Seller Needs a Trusted Platform
Every seller must always remember the key factor driving customers’ trust up – quick money access. Delays create doubts and can lead to an outflow of users.
Deposits and withdrawals should work like a clock and be executed as fast as possible. However, to achieve that, a seller needs a reliable system that won’t fail from the overload or massive demand surge.
Sellers must not forget that customer service is the face of the business. Thus, it should be capable of dealing with large amounts of inquiries. Multi-language capability and 24/7 availability are also nice to have. A good payment service provider (PSP) will have both options.
A rigid and flexible platform can automate and streamline most tasks done manually. A seller will no longer have to spend time figuring out how many acquirers the business needs. A good platform will make the process effortless and offer a bunch of network connections, thus activating money settlements through transactions with the best forex rates. A seller won’t need to stress about compliance – PSP will take care of that. All that is left to do for a seller is to do business.
Mihails Safro – Chief Executive Officer, xpate Mihails has nearly a decade of extensive experience in the fintech and e-commerce sectors, along with several years of entrepreneurship. He founded xpate, to create a more unified, modern payment experience – and one which leaves a positive impression on the user. As a young and successful entrepreneur with expertise extending across risk management, internet acquiring services, financial restructuring, financial analysis, corporate advisory, mergers and acquisitions, and valuations, Mihails is an established thought leader in the fintech industry. He has featured in several global publications and is a keen and considered industry spokesperson. Additionally, Mihails has seen his expertise recognised with a nomination for the prestigious ‘PayTech Leadership’ award at the 2021 PayTech Awards.