WorldPay, the UK-headquartered global payments provider that went public late last year, has experienced ongoing outages over the last 2 weeks. They are reporting the outage has to do with an issue with their gateways and that only 1% of their customers are impacted.
WorldPay has been a strong pillar in the global payments industry for the last decade and I am sure they will continue to be so, but there are several lessons that we can learn from this outage. Specifically, I want to take some time to think about the global payments setup for online retailers and how to get the best results over the course of your partnership with your global payments provider.
Full Disclosure: Beyond being the Managing Director of the Global Retail Insights Network (The GRIN), I work with and consult for providers in the global payments space and retailers that are looking to accelerate their global journey. Additionally, these recommendations are not pointed at WorldPay only, but rather, the industry as a whole.
Top lessons to learn? Here are a few…
1. Never rely on one company for all of your payments. It is critical that companies have at least two options when processing their payments – especially in the global arena. As a consumer, you don’t have one credit card in your wallet so why would you rely on one processor as a corporation?
2. Many global payment providers have been cobbled together from legacy systems over the years, which can create limitations in product offerings, scalability or technical SLAs. We always suggest that you talk to several retailers who utilize the provider in the regions you are entering. The GRIN has grown to over 1,000 retailer members, and part of the work we do is to help members validate data they get from vendors across the value chain. (including payments)
3. Another big area of contention, although not directly related to outage concerns, is the checklist retailers should look to when choosing a global payments provider. We see that the number one area of opportunity for improvement is in money management. This includes negotiating FX fees, understanding global pricing, and having a full understanding of reporting and remittance. This is especially true of North American retailers who go into negotiations with a US payments mindset and aren’t experts in evaluating areas of money management.
4. Lastly, all too often, the conversation with providers turns to alternative payments and the uplift it will give you to your business. This is true in some cases, but as I heard from a prominent VP of Marketing at a global retailer, “Don’t believe the hype when it comes to alternative payments.” The reality is that in some countries alternatives are prevalent, but oftentimes the actual uplift reported doesn’t account for credit card cannibalization. Expectations around the ‘sale’ can often lead to a surprise when the business uplift is nowhere near initial expectations. It’s always important to ensure that alternatives have been implemented in a way that supports retailers fully, including the full payments lifecycle – when you’re dealing with a ‘one-size-fits-all payments provider, they don’t optimize for retailers.
The world of global payments is ever evolving and can be a sophisticated maze of data when evaluating how to provide the best service in line with your local consumers expectations.
As retailers we need to understand that no provider is perfect and as we grow our global business it is important to not only have redundant solutions, but to develop expertise on the ins and outs of the global payments industry so we can best service our global consumer.
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