Online Payment Systems in Turkish E-Commerce: Merchant Experiences

03.10.2013 Boğaziçi University E-Commerce Lecture

22.08.2013 Yemek Sepeti Payment Systems Seminar

01.06.2013 IBS E-Commerce Micro MBA

23.03.2013 IBS E-Commerce Micro MBA

13.02.2013 Limango Payment Systems Seminar

12.12.2012 Webrazzi Payment Systems’12 Conference

26.05.2012 Bilgi University E-Commerce Academy Seminar

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@hakanerdogan!

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1981: Born in Denizli

2005: Graduated from Izmir Institute of

Technology, Computer

Engineering

2005: Sun Certified Java Programmer

1.4

2005: Consultancy, Java & JEE

Software Development

2007: GittiGidiyor / eBay, SOA

Infrastructure, Payment Systems

2008-2012: GittiGidiyor / eBay,

Software Development

Manager

07.2012 + Otto-Group Turkey – IT

Director

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Payment Systems Experience, Since 2007!

Credit / Debit Cards : -  EST / Asseco -  Garanti Bank GVP -  YKB Posnet

EFT / Wire Transfer:

-  Integration of Internet Banking

Introduction

Overview of Payment Systems in Turkey

One Step Back Before Start: Shopping Steps

Card Payment Systems: Statistics

Shopping Steps: Card Payment (Checkout) Page

Distribution of Payment Errors and Error Messages to Display

Payment and Refund Tests

Proactive Monitoring: Payment and Refund

New Feature Development ve 4 Check Points

Fraud, Chargeback and Security

No Response Payments

3D Secure

Alternative Payment Systems

Questions ?

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Agenda!

Breakdown of Payment Systems in Turkey!

5 Breakdown of Payment Systems in Turkey: Alternative Payment Systems and Their Details [Analysis]: http://www.odemesistemleri.org/turkiyedeki-odeme-sistemlerinin-kirilimi-alternatif-odeme-sistemleri-ve-detaylari-analiz/

Breakdown of Payment Systems in Turkey!

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The Internet Card Payment Transactions!

7 BKM – The Internet Card Payment Transactions: http://www.bkm.com.tr/istatistik/sanal_pos_ile_yapilan_eticaret_islemleri.asp

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One Step Back Before Start: Shopping Steps!!

Basket – Product Selection

Shipment / Invoice

Address, Voucher Selection

Payment Type

Selection & Checkout

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One Step Back Before Start: Shopping Steps!

Shopping Card and Payment Steps Design [1/6] : http://www.odemesistemleri.org/alisveris-sepeti-ve-odeme-adimlari-tasarimi-16/

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One Step Back Before Start: Shopping Steps!

Basket – Product Selection

Shipment / Invoice Address,

Voucher Selection

Payment Type

Selection & Checkout

SUCCESS, CONVERSION

SHOPPING CART ABANDONMENT

%65+ *

GOAL: To Increase Conversion

•  Minimum page transition

•  Minimum click

•  Minimum distracting

elements

•  Maximum information

•  “Above the fold” concept

* http://www.ritholtz.com/blog/2012/05/shopping-cart-abandonment/ * http://baymard.com/lists/cart-abandonment-rate

•  56.53 million credit cards *

•  96.64 million debit cards *

•  2.27 million POS *

•  30.67 billion TL card payment transactions by the end of 2012

•  80-90 % of payments are done by credit / debit cards

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Card Payment Systems: Statistics!

* http://www.bkm.com.tr/istatistik/pos_atm_kart_sayisi.asp By end of August 2013

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Shopping Steps: Card Payment Page!

Card Payment (Checkout) Page [2/6] : http://www.odemesistemleri.org/kartli-odeme-sayfasi-26/

GOAL: To Increase Conversion

•  Minimum page transition

•  Minimum click

•  Minimum distracting

elements

•  Maximum information

•  “Above the fold” concept

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Shopping Steps: Card Payment Page!Syntactic and Semantic

Validations •  Length validation •  Numeric input validation •  3DS supported card validation •  Debit kart installment validation •  BIN validation and not existing

Virtual POS – installment validation

•  …

e.g.: Card Number •  15 or 16 digits, •  CVV/CVC 3 or 4 digits,

numeric •  Luhn Algorithm check

Syntactic and Semantic Validations [3/6] : http://www.odemesistemleri.org/syntactic-ve-semantic-validasyonlar-36/

20 – 25 % of payment requests are failed

Roughly 1/3 of those failed payment requests are caused by “insufficient funds – not enough limit” (33 – 38 %)

Other Payment Errors: •  General declined (15 – 18 %) •  Invalid expire year or month (10 – 12 %) •  Invalid CVV / CVC (2 – 3 %) •  3DS not supported by card / bank •  Card does not support installment •  Can not proceed, card is not allowed to internet payments •  Technical problems, …

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Distribution of Payment Errors!

Your card number is not valid, …

Your expire year and month is not valid, …

Your CVV / CVC2 is not valid, …

Your card does not support installment …

You can not make installment payments with debit cards, …

Your card limit is below the payment amount, …

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Error Messages to Display!

Your bank does not proceed the payment request, …

Your card/bank does not support 3DS payments, …

Order ID is already used before, …

The items you are getting to buy are out of stock, …

Payment transaction is failed, …

…

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Error Messages to Display!

Classification of Payment Errors and Error Messages to Display [4/6] : http://www.odemesistemleri.org/odeme-hatalarinin-tasnifi-ve-onyuze-cikarilmasi-gereken-mesajlar-46/

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Payment and Refund Tests!

Refund Tests •  100 TL’lik siparişin tamamının iadesi ve iptali •  20 TL’lik siparişin tamamının kısmi iadesi •  20 TL’lik siparişin 5 TL’sinin kısmi iadesi •  20 TL’lik siparişin ikinci kez 10 TL’sinin kısmi

iadesi •  100 TL’lik siparişin iadesinin iptali J •  … Total 100 TL

20 TL

30 TL

50 TL

32 x Virtual POS x … ~ 100+ payment tests

Payment systems do not have a tolerance for a mistake

You have to go live with 0 bug

It’s better not to accept payment than accepting payment with bug that you haven’t realize (it may be too late when you realize the bug)

If there is a 2 minute outage, the alarm bells start to ring

Payment systems for the health of the heart and blood vessels Maximum adrenaline J

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Payment and Refund Tests!

Payment and Refund Tests [5/6] : http://www.odemesistemleri.org/odeme-ve-iade-testleri/

Now is Wednesday 02:20 pm. Considering last week Wednesday between 00:00 – 02:20 pm and last 4 week average:

•  How many payment transactions requested ? •  What about the amout of those transactions ? •  What about the breakdown of those transactions based on

Virtual POS’ses and card families? •  What about the success and failure rates ? •  What about the distribution of payment errors ? •  What about the standart deviation of those transactions ? •  …

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Proactive Monitoring: Payment and Refund!

Proactive Monitoring [6/6] : http://www.odemesistemleri.org/proactive-monitoring/

Daytime •  Based on Virtual POS’ses

o  The count of payment transactions in last 2 minutes > 0 ? o  The count of payment transactions in last 3 minutes

> (last 4 week average) x 0.85 ? o  The amount of payment transactions in last 5 minutes

> (last 4 week average) x 0.85 ? o  The count of payment errors in last 10 minutes

> (last 4 week average) x 0.85 ? At Night

•  Based on Virtual POS’ses o  …

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Proactive Monitoring: Payment and Refund!

Problems should be identified immediately with proactive monitoring It should be a learning system If a Virtual POS is down, than it should be disabled and those bank cards payment requests should be redirected to default Virtual POS automatically Users should be informed

• ‘Currently it is not possible to process an installment payment with Y bank cards, you may pay without installment’

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Proactive Monitoring: Payment and Refund!

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Proactive Monitoring: Payment and Refund!

Currently it is not possible to process an installment payment with Akbank cards, you may pay without installment

ü  Shopping Steps

ü  Card Payment Page (minimalist approach, the maximum information)

ü  Syntactic and Semantic Validations

ü  Distiribution of Payment Errors

ü  Payment Errors to Display

ü  Payment and Refund Tests

ü  Proactive Monitoring

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Status Quo!

4- Is there a payment problem ?

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New Feature Development ve 4 Check Points!

1- Is there a Fraud risk ?

2- Is there a refund problem?

3- Is there an accounting problem?

Fraud detection, fraud prevention and monitoring mechanisms

•  User’s history and profile •  Item’s price •  Online item / offline item •  Payment location, IP address and cookie information •  Other cards used by the user •  Cardholder name surname vs user membership name surname •  Shipment address vs membership address information •  Payment errors encountered by user •  Payment fail / success statistics of user •  …

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Fraud and Chargeback!

Fraud Capturing, Calculations and Prevention Methods: http://www.odemesistemleri.org/fraud-sahtecilik-yakalama-hesaplama-ve-onleme-yollari/

Fraud detection, fraud prevention and monitoring mechanisms

•  Rule sets •  Learning systems •  Data mining considering previous data •  Potential risk algorithms

Chargeback Flow

•  Chargeback request •  The appeals process •  Returning/rejecting the chargeback request

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Fraud and Chargeback!

Personal Security

• Using known and safe shopping sites • Considering key-logger in public internet • Using 3D Secure • Using virtual cards • …

Corporate Security

• Not storing card information • PCI – DSS • Audit • Penetration tests • …

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Security!

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No Response Payments!

Models:

• 3D-PAY • 3D-PAY OOS (3D-PAY HOSTING) • 3D

Verification:

• Half 3D Secure • Full 3D Secure

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3D Secure!

3D Secure with Relevant Q & A: http://www.odemesistemleri.org/3d-secure-ile-ilgili-tum-merak-ettikleriniz/

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Alternative Payment Systems!

•  Breakdown of Payment Systems in Turkey: Alternative Payment Systems and Their Details [Analysis]:

http://www.odemesistemleri.org/turkiyedeki-odeme-sistemlerinin-kirilimi-alternatif-odeme-sistemleri-ve-detaylari-analiz/

•  3D Secure with Relevant Q & A:

http://www.odemesistemleri.org/3d-secure-ile-ilgili-tum-merak-ettikleriniz/

•  What is BKM Express, Features and What Are the Pros, Why It is Preferred:

http://www.odemesistemleri.org/bkm-express-nedir-ozellikleri-ve-artilari-nelerdir-neden-tercih-edilmelidir/

•  Alternative Mobile Payment System with a QR Code, PARAKOD [Interview]:

http://www.odemesistemleri.org/qr-kod-ile-calisan-alternatif-mobil-odeme-sistemi-parakod/

•  PayU - Virtual POS, Fraud Monitoring and Prevention Services [Interview]:

http://www.odemesistemleri.org/payu-sanal-pos-ve-fraud-filtreleri-hizmeti-roportaj/

•  PayPal and Turkey Payment Systems Market [Interview]:

http://www.odemesistemleri.org/paypal-ve-turkiye-odeme-sistemleri-pazari-roportaj/

•  Mobile Shopping and Payment Platform Mobilexpress [Interview]:

http://www.odemesistemleri.org/mobil-alisveris-ve-odeme-platformu-mobilexpress-roportaj/ 31

Articles may be of Interest!

•  İninal Prepaid Card User Experience:

http://www.odemesistemleri.org/on-odemeli-ininal-kart-kullanici-deneyimi/

•  Fraud Capturing, Calculations and Prevention Methods:

http://www.odemesistemleri.org/fraud-sahtecilik-yakalama-hesaplama-ve-onleme-yollari/

•  Shopping Cart and Card Payment Systems Experience - Article Series:

http://www.odemesistemleri.org/alisveris-sepeti-ve-kartli-odeme-sistemi-tecrubeleri-yazi-dizisi/

•  Shopping Card and Payment Steps Design [1/6]:

http://www.odemesistemleri.org/alisveris-sepeti-ve-odeme-adimlari-tasarimi-16/

•  Card Payment (Checkout) Page [2/6]:

http://www.odemesistemleri.org/kartli-odeme-sayfasi-26/

•  Syntactic and Semantic Validations [3/6]:

http://www.odemesistemleri.org/syntactic-ve-semantic-validasyonlar-36/

•  Classification of Payment Errors and Error Messages to Display [4/6]:

http://www.odemesistemleri.org/odeme-hatalarinin-tasnifi-ve-onyuze-cikarilmasi-gereken-mesajlar-46/ 32

Articles may be of Interest!

•  Payment and Refund Tests [5/6]:

http://www.odemesistemleri.org/odeme-ve-iade-testleri/

•  Proactive Monitoring [6/6]:

http://www.odemesistemleri.org/proactive-monitoring/

•  Everything About Credit Card Payments and Cash Price with Installment:

http://www.odemesistemleri.org/kredi-karti-ile-odeme-ve-pesin-fiyatina-taksit-hakkinda-bilmedikleriniz/

•  Setting up a Payment Systems Infrastructure: Credit Card Channel:

http://www.odemesistemleri.org/odeme-sistemi-altyapisi-kurmak-kredi-karti-kanali/

•  Setting up a Payment Systems Infrastructure: EFT / Wire Transfer Channel:

http://www.odemesistemleri.org/odeme-sistemi-altyapisi-kurmak-efthavale-kanali/

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Articles may be of Interest!

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Questions ?!

Thank You!

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@hakanerdogan hakan.erdogan@limango.com.tr

http://www.odemesistemleri.org

@odemesistemleri