Ecommerce has always formed an uneasy bridge between online businesses and real-world currencies. The pound and the dollar were never intended to be exchanged digitally, and the clunky mechanisms used to transfer funds to online retailers reflect these challenges. PayPal was almost driven out of existence by Millennial phishing attacks, while cryptocurrencies like bitcoin have yet to prove themselves as anything other than stock market investment vehicles.
Bridging the divide
There has been an ongoing search for a company capable of bridging the digital divide between ecommerce platforms and their customers. One potential solution might involve the software created by Adyen, a Dutch company founded in 2006. After a decade of relative obscurity, its backend payment software has been adopted by clients including Netflix, LinkedIn and easyJet.
Last year, Adyen acquired a European banking licence. This licence is granted to any bank or financial institution processing credit or debit card payments for merchants, absolving banks of any need to rubber-stamp transactions. Managing transactions end to end simplify the online payments process for both retailers and consumers. The former receive robust and rapid payment portals across any checkout platforms, while the latter isn’t redirected off-site during a transaction.
The second point is significant because eliminating website redirects simplifies the checkout experience. It reduces stress, saves time and prevents web browser security flaws from derailing a transaction. Payment processing is executed rapidly, whether consumers use credit or debit cards (as in 90 per cent of online payments across the UK) or niche methods like bank transfers. Crucially, Adyen’s ecommerce interfaces are the same for customers buying in-store, in-app or online. And, once a transaction is concluded, retailers are offered detailed data insights produced through machine learning algorithms.
The technical underpinnings of Adyen’s online payments portals involve a redundant, stateless service-oriented architecture capable of accepting payments from multiple locations simultaneously. Extensive bandwidth ensures processing speed is generally less than one second, reassuring for retailers who are nervous about losing customers to slow payment functionality. Data centres on both sides of the Atlantic absorb payment traffic, while new releases of Adyen’s core software are rolled out every month by in-house programmers.
One measure of Adyen’s success was visible in the announcement earlier this year that eBay was adopting it in place of PayPal. This transition will take several years, but a key reason behind the migration is Adyen’s ability to facilitate online payments within eBay’s own software. PayPal needs to redirect customers to an external interface, requiring an account before customers can complete transactions. This has obviously affected eBay’s market share, since people are unlikely to register with PayPal for an impromptu purchase or low-value item. And though PayPal remains a far more recognisable brand among consumers, Adyen is designed to operate on a white label basis. Low levels of recognition among consumers are less important than its ability to robustly process end-to-end ecommerce transactions. Perhaps the ecommerce divide is finally beginning to close.