FinTech Connects with… Iryna Agieieva, Senior Product Manager Payments, Booking.com
During our PayTech Connect Advisory Board meeting in early April, I caught up with Iryna Agieieva, the Senior Product Manager Payments for Booking.com.
I fired a few payment specific questions at her, covering strong customer authentication, alternative payment methods and open banking.
With years of experience in online payments, alternative payment methods and payment flow optimisation, she was pretty well placed to give us the merchant perspective.
Will checkout conversion take a hit from SCA (Strong Customer Authentication)?
This is quite an important topic right now, particularly for merchants. The biggest difficulty is that there is still no clarity on a lot of details and we are only a few months away from the 14th September deadline. Merchants are committed to delivering safe online processing, but standards are still evolving, cards schemes are continuing to update guides and particular flows will only be available a couple of weeks before the new regulation comes into effect.
Furthermore, even if merchants would implement all of the new flows perfectly, it appears that quite a few banks will not be ready with their core flows and the necessary exemptions well in advance of the implementation date. Thus there is general consensus that at least some impact on the industry is unavoidable given the current situation.
That being said, SCA is a great opportunity to rethink current flows, to make customers feel more safe and secure with their online transactions and to improve the overall mobile experience, which was not completely optimised with the first version of the 3D Secure protocol. We’re keeping a close eye on this and are already looking at ways to optimise our current payment flows around new regulation.
How do you see the use of alternative payments evolving, will they replace credit and debit cards in the near future?
There are two definitions of alternative payments. One – a more Western centric angle – regards the move away from standard cash and card payment methods. The other defines an APM as a payment method making a complete departure from traditional payment rails, for example, paying without a bank account. Iryna addresses this question from the point of view of the latter.
It is really important here to discuss this based on the region. I came back from Singapore a couple of weeks ago, and in this region in particular, everyone talks about alternative payment methods. A large portion of the population is unbanked, so it is a big topic over there.
If you come back to the UK and Europe, it is trickier to see how alternative payments may evolve with such a high volume of credit cards and the fact you can use them almost everywhere.
You can’t fight the habits of the consumer on your own, unless the entire industry decides there is a particular need to move from the current habit to a new habit.
Open banking could be an example of an alternative payment method. However, can we say that it really is an alternative considering the bank is still at the end of the process – just like the credit card is?
It’s going to be evolving mostly in emerging regions. In the regions with a high penetration of credit card usage, the process of moving towards alternatives will probably be a slower and lengthier process. This also depends a lot on how the industry will attempt to influence this, as in fact PSD2 and open banking represent a big step towards opening up competition outside of the traditional card schemes and create a fertile ground for innovation with alternative payment methods.
What does the rise of the open API mean for the payment space?
I’m going to talk here from the merchant’s perspective. There are a couple of opportunities here, the first of which is being able to access more useful banking information via regulated AISP providers. This gives merchants enhanced opportunities for personalisation and to enrich their knowledge about their customers in order to build custom flows that are as relevant and personalized as possible.
There is another angle here with regards to cost reduction, but it also comes with a potential hit on conversion as open banking is quite new. I’d advise merchants to carefully experiment with new payment methods via open APIs and compare their impact both in terms of cost and conversion.
Is open banking the dominion of Generation Z, or can merchants and financial institutions hit critical mass with consumers of all ages?
That’s a tricky question. I think it might perhaps be easier for younger customers to adopt because they’re generally more open to change. For other consumers who have been dealing with more traditional banking methods for decades, it’s most likely going to take some additional effort to convince them of the benefits of moving towards these new payment habits.
Depending on how the industry will adopt open banking and develop user flows, we will be able to learn more about how consumers of all ages are going to react to these new ways of paying. Time will tell.