Value-Added Services Will Define the Future of E-commerce

The South African retail space has seen some dramatic changes in a relatively short time. Online shopping has become the new normal bringing with it new payment opportunities and some key challenges yet to be overcome.

In this fast-changing landscape it is important for merchants to find their preferred e-commerce partner of choice who will help make a smooth transition to online shopping and contactless payment solutions, says Andrew Springate, CEO of tech and financial gateway service provider PAYM8. “As a PAN African merchant-facing payments gateway PAYM8 has remained a step ahead in transaction interoperability, machine learning and business-driven processes offering a variety of payment products and solutions.”

According to data from FNB Merchant Services e-commerce accounted for 14% of total card payments sales at the end of 2021. The e-commerce market is set to be more than R400 billion by 2025 with around 1 billion transactions per annum.

M-commerce, where cell phones are used to pay for goods and services, has advanced beyond mobile banking to debit and credit transactions. According to the International Trade Administration’s (ITA) guide on SA e-commerce cell phones have largely replaced wallets, as banks, card operators, retailers and communications companies provide alternatives to cash as a means of payment.

M-commerce is particularly attractive in South Africa due to the rapid increase in the number of smartphones, and poor fixed-line infrastructure. “This provides an immense opportunity for online retailers, as mobile spend is projected to increase,” says the ITA.

Partner of choice

Springate says PAYM8 is now in its 12th year of Level 1 Payment Card Industry Data Security Standard (PCI DSS) certification. This is the highest certification level giving merchants the assurance that all card information that is accepted, processed, stored or transmitted remains in a secure environment.

Although many South Africans still rely on traditional cash payment systems, the country’s inter-banking payment system is taking on a more modern look.

Payment solutions that are increasingly finding their way into the e-commerce world include card payments such as Visa and Mastercard, buy-now-pay-later such as Payflex and MoreTyme, as well as digital wallets and the Rapid Payments Program (RPP).

“We believe the biggest benefit of the RPP is that it will provide a low-cost digital payment system for consumers.  We are committed to embracing this modernisation process and to be first through the door to offer this to our merchants. Our RPP integration will be completed by the end of this year,” notes Springate.

Bigger footprint

PAYM8 has expanded its footprint beyond South Africa’s borders and has operations in neighbouring Botswana and Namibia, offering merchants a comprehensive

gateway with an ever-increasing variety of products and solutions.

The ability to offer merchants a choice of which bank will acquire their transactions is an accepted practice worldwide and having such a capability is seen as a strategic advantage. Enabling cross-border payment acceptance allows merchants to expand and generate additional income from emerging markets. This is an attractive proposition for merchants who have operations across the continent or is trying to expand.

The new battlefield

“We believe value-added services and products will be the battlefield of tomorrow in the e- and m-commerce worlds. Our ability to offer a variety of value-added services such as reporting and dashboarding, artificial intelligence and machine-to-machine learning is what sets us apart,” says Springate.

Increasingly, merchants are demanding seamless smart platforms where they have access to sales and transaction outcome reporting; with a clear view of how many transactions took place, how many were unsuccessful and why they were unsuccessful. Merchants also require services that go beyond payment solutions, such as coupon integration, airtime, data and vouchers.

PAYM8 has already incorporated artificial intelligence and machine-to-machine learning structures into its platform design. This requires a close relationship with merchant partners as the more information is shared the better the value-added service offering will be.

“As the market for e- and m-commerce grows, so too does cybercrime. A tangible value-add is PAYM8’S ability to manage potential fraud and suspicious activities on behalf of its merchant partners. In a constantly shifting environment, it’s clear value-added services are where merchants will gain the next competitive advantage.”

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