Subscribe
Share
Share
Embed
Our flagship series will propel you to the forefront of the global ecommerce revolution. From analyses of breaking current events to the intricacies of navigating cross-border sales and regulations, Business over Borders entertains and informs any audience who wants to learn more about how international ecommerce works.
Hi, everybody, and welcome to Business Over Borders. I'm your host, Leo Tucker, and I'm joined today by 2 very special guests. I'm joined today by Andrew Doukanaris, the CEO of Flotta Consulting, and Melissa Pottinger, our VP of Payment Ops here at Reach. Hi, everybody.
Melissa Pottenger:Good morning.
Andrew Doukanaris:Hi, Leo. Hi, Mel.
Leo Tucker:Hey. Glad to have you both. Okay. So we got a lot to talk about today. We, one thing everyone's kinda curious about getting close to Black Friday, Cyber Monday here at the end of the year.
Leo Tucker:2025 is coming in hot. So what are we seeing? What are some of the big factors we see driving global ecommerce in 2025? What's what's big to look for? Andrew, I'll toss this one to you.
Andrew Doukanaris:Yeah. Thanks, Leo.. I I guess, you know, come back to we're post COVID. We're still shopping online. But I think Internet penetration is definitely something that's quite important.
Andrew Doukanaris:That's kind of helping us shop more online so we're able to do it whether it's from our smartphone or our tablet, whether we're on the train, on the plane, in a car. And it seems to be well, it's just so much easier now to just shop on the go. So I think that's that's kind of a big driver. So mobile commerce is is huge. And that whole thing around digital, I I'm not sure when we're gonna stop using digital and as a as a new thing, because to me, it's kind of becoming it's becoming business as usual now.
Andrew Doukanaris:But I I I still see people with digital in their title and, you know, I love them to death, but, you know, it's kind of it's old news now. You know, who isn't digital? So I think we're gonna see that growth and just that penetration. And I look at you know, when I go for a coffee, people are just on their phone all the time, ordering, buying, and it's just so much easier to do. But I think that technology is just so much, more available than perhaps ever was.
Andrew Doukanaris:And, I put that down to Internet penetration more than anywhere else, and that's where we're kind of seeing the growth in some markets. It's just through that use of simple technology.
Leo Tucker:Absolutely. I I heard a couple of wild stats. The total number of digital buyers there again, we go with digital. Total number of digital buyers will reach 3.1 billion by 2025. And another one that's even wilder is mobile ecommerce is expected to hit 77% next year.
Leo Tucker:That's hard to believe that 77% of things bought in ecommerce are gonna be on mobile phones or tablets or whatever.
Andrew Doukanaris:Yeah. But but remember, about 70% of the month number they've made changed, maybe around about 60, 60% of the world's purchases are still in cash. So we still have a long way to go. And I was in Athens just last week, and, you know, a couple of times, I had to check and double check that they accepted card payments before I made the purchase.
Andrew Doukanaris:You know, there's still the traditional places where people don't like to use card or accept card. Tends to be places like cab drivers, the the world over. That seems to be they haven't quite moved to digital or don't want to yet. But I think the number of users is growing simply because I can't remember what the total number of mobile phones is around the world, but it's probably 3 to 1 in terms of population. So, again, just that easy access and barriers to entry have come down.
Andrew Doukanaris:So seems to be quite easy to to to do these things now. So expect that number to grow and grow.
Melissa Pottenger:Right. And just to expand on that point, Andrew, I think that, these things go hand in hand. Right? So as we see the Internet adoption, grow and mobile phone usage and and and digital, this ubiquitous word, we're also seeing a drive towards authentication. Right?
Melissa Pottenger:And the need to secure those payments. So, that's certainly a prevalent part of of our business and what we're seeing happen in in many, many regions and markets, and I think it it's gaining traction. And while there's there is the the bit of friction involved, I think the the safety and securing that transaction certainly transcends, a little bit of that.
Andrew Doukanaris:Yeah. And I and I've spent the last, I guess, how many years, a long time. But I was with some ex colleagues this morning from one of the global payment schemes where I worked, and the buzzword there is still tokenization.
Melissa Pottenger:Sure.
Andrew Doukanaris:So it's around making payments safer, securer, faster, less friction. But tokenization seems to be the thing that's driving that safe and security. And I guess payments is all about that. It is, you know, I'm gonna pay somebody or I'm gonna receive a payment. I want it quickly.
Andrew Doukanaris:I want it cheaply, and I want it now. And tokenization seems to be the driver or the enabler for a lot of those things.
Leo Tucker:Sure. Maybe let's dive into some of that security a little bit. I know at the QUBE Forum coming up next month, there's some interesting panels on payment security and authentication and tokenization is thrown in there as well. Anything in the space you're excited to see coming down the pipe?
Andrew Doukanaris:Yeah. I just think that that we all seem to be working on it. The industry as a whole seems to be working on it. I think where, as an industry, we still haven't done a great job is education for the consumer and for the merchant. I I spent, you know, I spent the first 20 years of my life working for a global retailer.
Andrew Doukanaris:And trying to speak to the payment companies was really difficult back then, and I kept reminding people that I was their largest customer, and it will be quite easy to turn them off. But, really, I wanna work with them, not against them. And so I think we still need a bit of work around what does tokenization mean, what does authentication mean to the consumer. And here in the UK and Europe, we've got pretty tough rules around things like that. But we seem to keep them within our own sphere.
Andrew Doukanaris:We don't necessarily go out and educate people. We kind of thrust things on them. And then the same for the for the retailers as well. We kind of say, we've developed something new. It's better than what you had last week.
Andrew Doukanaris:It's gonna make it safer, more secure. But, actually, what the retailer's looking for is, okay. I'm happy with that, but it's just the same sale that I had last week. I want more sales. And, yes, I want them to be secure, but that should be the that shouldn't be a question.
Andrew Doukanaris:That should just be something that you expect, a safe and secure payment. So merchants are looking for increase in sales that are cheaper, faster, you know, more economical for them. But it's a driver. It's a driver for the industry to really harmonize and, stop this intermediation where we're working against and working with each other.
Leo Tucker:So one thing I think is kind of an interesting intersection of, you know, a retailer saying, yeah. Is it helping my sales, but, also, is it secure? Things like digital wallets, like Apple Pay as you can see. I mean, it it it doesn't get much easier now to buy something. You know, I go see a product.
Leo Tucker:I got a shiny new pair of shoes I'm excited about. I say, buy now. Double click the side button. Reads my face. It's on the way.
Leo Tucker:So I'll I'll ask this question to the both of you. How is that adoption coming along to retailers, and do you see this penetration just continuing in this direction?
Melissa Pottenger:Oh, absolutely. I think, you know, we've seen it more and more like PayPal is the staple. Right? Everyone knows PayPal. The reality is PayPal is filled with your funding instruments that your Visa, your Mastercard.
Melissa Pottenger:Why do people gravitate toward it? Is it user experience? Is it that seamless journey at checkout? There's a lot of reasons why. And it's built loyalty, and it's built traction, and you named it.
Melissa Pottenger:Apple Pay and others have, you know, for lack lack of better terms, cashed in on what's worked well. And consumers want this this, consistent experience, and they get that. They get that with PayPal. They get that with Apple Pay. So there's a trust there.
Melissa Pottenger:So we talk a lot about loyalty and payments, and there's a, you know, a security and hey. I understand how this works. I trust it. I've I've seen how these transactions settle on my card statement. So overall, you know, we're gonna see continued growth, continued adoption.
Melissa Pottenger:And with that comes the necessity, just like Andrew was mentioning, of educating merchants on why why it matters to have these at checkout. We talked last time, Leo, about a payment method buffet. If you're really honing in on consumer preferences, you know that consumers want those digital wallet options, and that's gonna matter and perhaps even drive conversion.
Andrew Doukanaris:Yeah. I agree, Mel. I think when I when I look at Apple Pay, it's a perfect example of its great technology. I mean, I know I'm looking at your desk. I can't see your wallet, but I can see your phone on your desk.
Andrew Doukanaris:And I'm I'm a typical person. I leave the house now. I can't remember the last time I took my wallet with me. Oh, that's a lie. When I was hiring a car and I needed my license as evidence of who I am.
Leo Tucker:Oh, yeah.
Andrew Doukanaris:But but but I leave the house now. I just carry my phone, and that's it. I have I'd dread to think how many cards I have in my wallet, various wallets. You know, I kinda stand there whether it's on the trade or whether I'm paying for a coffee or lunch as I was earlier today, and everything is there. But, you know, it's great, but, actually, I'm gonna be a bit biased.
Andrew Doukanaris:I've worked for the 3 schemes around the world. Right? Visa, Mastercard, and JCB. All of those schemes and all of Apple Pay, sorry, and the other schemes that we've mentioned or payment used those rails. They used the Visa, Mastercard, American Express rails.
Andrew Doukanaris:So what we've really done is we've gotten rid of the plastic, but we haven't gotten rid of the stuff that's behind the plastic. And to Mel's point, that's because we trust, and that's what payments is all about. We trust those schemes to be safe, to be secure. You know, the the retailers know that word. And in some countries, you when you say visa, they really mean payments, car payments.
Andrew Doukanaris:So in a restaurant in whether it's in Eastern Europe or whatever, they'll say, are you paying by Visa? What they really mean is, are you paying by card? So it becomes like the the Hoover as opposed to vacuum cleaner, kind of thing. So it's synonymous with a payment. But all of the things that we see today, whether it's PayPal or, you know, Apple Pay, relies on the existing infrastructure to work.
Melissa Pottenger:Absolutely. And just to solidify, this whole conversation, there's a great stat I saw recently by Forrester, and it said, 24% of online adults have used Apple Pay recently to make a purchase, but Apple Pay's adoption has more than doubled since 2019. So that tells you so much about that trend line and the traction there. Yeah. Expect more of that.
Melissa Pottenger:Right?
Andrew Doukanaris:Yeah. Again, it's about trust. We trust the brand. Right? It's it's a bit like every time we have an update on our iPhone, whoever reads the terms and conditions, or you're just trying to scroll down to the bottom, hit click, and off you go.
Andrew Doukanaris:But I have no idea what some of these things say, but I trust them enough to know they're there to protect me. So I can trust them with my money, and I trust them with everything else. Right. So I think that that's what it's about. And for merchants, it's about, am I gonna get paid on time?
Andrew Doukanaris:Am I gonna have any issues? Hopefully not. And it's making it convenient for me. So
Leo Tucker:So, I mean, the 3 of us are clearly very familiar with Apple Pay wallets and things like that. They're popular where we live for sure, but maybe not everywhere. And let's talk a little bit about kind of emerging markets, not necessarily with digital wallet adoption, but payments more broadly. You know, North America, Europe, more robust payment systems for sure. But for these emerging markets, what are we seeing?
Andrew Doukanaris:Well, I I guess I always used to use the example that I look at the US. I lived there. I lived in Europe, obviously, and I always used to laugh. This was a while ago. And I go to a gas station, obviously, a Chevron gas station, and, I tried to use my card at the pump, and it would ask me for my ZIP code.
Leo Tucker:Oh, yeah.
Andrew Doukanaris:But but but I'm from the UK. My ZIP code is one letter and two numbers. Not it's not a 6 digit or 5 digit number.
Leo Tucker:I'm in Canada. I know this know the problem very well.
Andrew Doukanaris:Yeah. So it it would fail miserably. So what we we it's not joined up thinking. But what we see in the developing markets is they're sort of sitting back, or I think they have done for many years, looked at the mistakes that we've made in some of the more mature markets and said, you know, we're not gonna do any of this. We're not gonna have checks.
Andrew Doukanaris:We're not gonna have people paying in cash. We're gonna leapfrog. We're gonna go to the latest and greatest. So if we look at Brazil, Mexico with accounts to account payments, you know, they've gone down that route where it's more direct from the merchant or to the merchant from the from the from your bank account. So they're getting paid instantly at a lower cost with probably less friction and potentially less fraud as well.
Andrew Doukanaris:Whereas in in the US and certainly in the UK, we're talking about open banking and, you know, that whole thing of account to account payment, but we're not there yet because we have legacy systems that work pretty well. So we're now telling the merchants, you know, we said you needed a signature 20 years ago. Then we said you don't need a signature. We only need, PIN code. Then we said you don't need a PIN code.
Andrew Doukanaris:It's contactless. Then we said you don't even need a card. You pay by phone. So we're constantly changing, whereas other parts of the world have said, we don't wanna put that infrastructure and it's expensive. We'll just move to whatever the latest is, and we'll implement that.
Andrew Doukanaris:And we see that in Latin America, in some parts of Africa. If we go back to Kenya and then Pesa 25 years ago, a simple mobile phone enable people to make payments at a market long before long before Apple Pay is all about that solution. And then, you know, in other parts of the world, in Asia Pac, probably the fastest growing because of population and Internet penetration. And people that are younger than me probably feel very comfortable making payments directly from account to account and not necessarily worrying so much about ID theft because they trust, as we said, the the rails that they use will be safe. So I kinda see we're kind of stuck in this.
Andrew Doukanaris:We're gonna get there eventually, but, the rest of the world has moved far further ahead than the US and Europe has. That's for sure.
Melissa Pottenger:And I noticed you didn't even touch on FedNow and Canada trying to get the the ducks in a row, and Yeah. They're standing up. So it's it's such a valid point, Andrew, because I think, you know, what we believe being in payments, what we believe is next is exciting, but you're right. It still takes time. It takes infrastructure.
Melissa Pottenger:It takes adoption. Yes. And to your earlier point, it takes education. And I think that's on all sides. Right?
Melissa Pottenger:That's on the merchant side, the consumer side. And a lot of times in our business, I know merchants will ask for something and will, a lot of times, look back and think, okay. Well, does does their existing consumer buyer behavior indicate that that would work well for them? And the flip side of that, we talked a lot about trust. The other side is is are there, like, indefensible charge backs, or is there a dispute window?
Melissa Pottenger:It's pretty wacky to me how, like, the how many payment methods are out there, and you can have one consumer say, oh, well, if you had this, I would have paid with it. But, really, you need to zoom out. You need to look at your business as a whole.
Leo Tucker:Andrew, I'd like to hear your thoughts on upcoming trends in 2025. Broad question. Hit me.
Andrew Doukanaris:Yeah. I listen. If I didn't say AI, there'd be something wrong. Right? So every event, I we managed one panel, a couple of weeks ago without mentioning AI.
Andrew Doukanaris:But, you know, we've been using AI for a long time. So it's not new. It's our use of AI that has changed. So I think we'll see AI working perhaps in the background around fault detection and more around real time analysis, so that that's good. But I think what people are still looking for is where where's the big breakthrough?
Andrew Doukanaris:We've talked about account to account, embedded finance, open banking. I I don't write my phrase open banking. You know, banking should be secure. So when you tell somebody it's open, I think it kind of loses that secure thing. Right?
Andrew Doukanaris:So what I want is if I if it's on my phone, I want everything on my phone. So make my life easier by giving me an or a solution that puts everything in one place, whether it's my loyalty points, whether it's my payments, whether it's my mortgage, my car rental, whatever it might be. So I think we still need to do some work around that. So I think that's gonna that's gonna grow over the next year or 2. Loyalty programs seem to be making a play back again.
Andrew Doukanaris:So I think we're seeing more around loyalty than we have done for a few years. But I think loyalty and reward, it's kinda 2 different things. Right? So I'm rewarding you for being loyal, but I want something from you. And I think the large retailers still haven't all tapped into the value of the data.
Andrew Doukanaris:So I'm hoping that AI will help us really use that richness of if they're you know, I don't know how many clicks there are per second, but let's say let's say there are 100,000 clicks per second. That's a lot of data. What are we doing? How are we using that data? How are we helping people with their purchases?
Andrew Doukanaris:How are we helping retailers, with what they put in the store or online? So I think loyalty and reward, still gonna grow, and it'll be more integrated, And perhaps it'll be real time, so I haven't got to wait 3 months or 3 years to collect enough points. I want that instant ratification. Account to account payments. So let's talk about that a little bit.
Andrew Doukanaris:We've seen that grow in other parts of the world. It needs to be better managed. I think that the issue we have in the US and I think in the UK and parts of Europe is that we already have a really good safe secure system that works for payments. We're saying that it will save the retailer money, and that's a good thing. But what does it do for us as consumers?
Andrew Doukanaris:You want me to give up my co branded card, let's say my American Express card where I collect points and I redeem those points for holidays, You now want me to pay with debit, so I get no points. And I'm paying you as the merchant instantly, but what do I get out of it? What what do I get from making that payment instantly? Are you gonna offer me a discount because you're saving money on the purchase? So I still think that whole thing around account to account works really well for the retailer.
Andrew Doukanaris:Doesn't work so well for the consumer today. So I still think there's that. We we haven't found that middle ground yet around that. Buy now, pay later, definitely, is gonna continue to grow, but I think the one that really is gonna drive is the digital dollar, the digital euro, and digital currencies. And in my mind, they have to be regulated.
Andrew Doukanaris:They have to be not just issued by companies, but governments have to see that as it's no longer fiat currency. This is now digital dollar issued by the Fed that means something installed somewhere safe and secure, and everybody has access to it whether they have a bank account or not. And that makes it a a safer bet. So I wanna see more on digital currencies. So, but managed well and regulated.
Andrew Doukanaris:The the last thing we need is a wild currency, being launched that kind of fluctuates all over the place because it's not really currency. I'm talking about crypto. You know? So crypto's great, but I don't know too many people that make that many payments today on crypto. Some do, and that's great, but I'm not sure the user experience is as good as it should be.
Andrew Doukanaris:Is it is it as good as clicking my phone? Not yet. But it could be one day. So I think you smash all of those things together. It's building the propositions, and I think that's where we've created a lot of these great things in the payment world.
Andrew Doukanaris:But I always use that old phrase, it's a solution looking for a problem. So fine fine with the problem. The technology's there. AI will definitely help because it'll make you know, it'll learn and change things. But tell me the reason why as a consumer you want me to move from one payment terminology or terminal device to something else.
Andrew Doukanaris:What do I get out of it? And I think that's the piece that's missing right now for all of the great stuff we've talked about. So maybe some cons consolidation. Maybe we'll see some players drop out. We're certainly seeing funding that's kind of dried up a little bit when it comes to Fintech investment.
Andrew Doukanaris:So that's gonna either help sharpen people's pencils because they'll look at bottom line rather than just top line, And maybe they'll start thinking about how do we make a profit as a payment organization rather than just generating revenue. So what do we have to offer everybody in that in that model, to make this worthwhile?
Leo Tucker:Melissa, do you have anything to to add to that?
Melissa Pottenger:Well, I I completely agree with what Andrew said. I think we will see a refinement in the the payment method mix that's being offered, what makes sense for shoppers in different regions based on preference. Right? I think we talk about payments a lot, and I'm number one fan of payments performance and optimizations. But the reality, we really have to look at payments experience over just, hey.
Melissa Pottenger:How do we make those payments fly? How do I get more money? You have to really look at holistically that entire user experience. It's so important. And I think because we are we've just like Andrew said, we catapult it, on the technology side of the business.
Melissa Pottenger:We can't lose sight of, you know, how shoppers are indicating their preference and why. You know? So I I think that's really important. In addition, I I think probably more cross pollination. We talked a little bit about digital wallets earlier, and now we're seeing picks went into Google Pay.
Melissa Pottenger:A lot of driver's licenses in the US are going into digital wallets like Apple Pay. So if we think about how this idea of a super app, that's that's going to truly, improve our lives. If we can leave our homes without, adding more stuff to it. And you can start a Tesla with your phone. You can pay with things with your phone.
Melissa Pottenger:Maybe someday, you can do it all. I thought recently about I was like, gosh. It seems like so and so spends a lot of time on their phone, then I realized, oh, the phone has replaced your newspaper, your calculator, your camera. It is all Your eyes.
Andrew Doukanaris:It's everything.
Melissa Pottenger:As we continue to build technology that creates efficiencies in our life, it will continue to drive innovation, thus consumer adoption.
Andrew Doukanaris:That's a really good point. My my, my wife always says I've been listening to the same music for the last 40 years. It started with vinyl, and now it's on Spotify, but it's the same music. So but but I no longer have to carry around CDs or or cassette tapes when I when I travel. I've got my 1,000,000 singles, and I listen to 20 at the same time.
Andrew Doukanaris:So, yeah, all in one place make my life easier. So you're right, Melissa. It's that whole user experience again of everything's not too far away from me. So here's my phone. It's right here.
Andrew Doukanaris:It does everything for me. So I think the user experience has to improve, and you're right. That consolidation refinement is definitely the way forward for 2526. But but the barriers to entry have come down. Right?
Andrew Doukanaris:So technology is cheaper. Think about how much we used to pay for storage 30 years ago, 20 years ago, 10 years ago, and now I can buy a terabyte of data for a $20 or something.
Leo Tucker:Well, these topics and many more will be covered in the upcoming next gen payments and regtech conference. Andrew, you wanna take a little bit of time and tell us about the event, what to expect, and what's happening?
Andrew Doukanaris:Thank you. I I think that listen. We're really excited. I know it's easy to say that, but we're really excited that we're gonna be there because I think it's taken us a few years to to crack and think about coming over to the US. And we we kinda toying around where it should be, East Coast, West Coast.
Andrew Doukanaris:We've got in the middle, so it's pretty good.
Leo Tucker:Yeah. It's perfect spot. Austin's one of the coolest spots.
Andrew Doukanaris:Yeah. That's right. I mean, I mean, you know, it's it's becoming the new Silicon Valley, right, because everybody's moving there. So, I think for us, it's it's building on the events that we've had previously. I said that the events are getting bigger.
Andrew Doukanaris:I think what I like about it is that we get the decision makers in the room. We're not it's not an event where it's 5,000 people and, you know, I hate that whole thing where one says, I'm at this event, and it's great. I met some people. We're actually getting people on the panel who wanna share what they're doing. So it'll be great.
Andrew Doukanaris:We've got people from, you know, whether it's Starbucks or Citibank or Meta. I'm just kind of reading through PayPal, Swift, great organizations, that actually influence payment movements. It's great from a sponsor perspective because they get to meet the people they want to. It's great for us as attendees or panelists or moderators because we get to learn as well. We get to hear what's going on.
Andrew Doukanaris:So, I'm I'm really looking forward to being there. It's gonna be great to be back in the US. It's been a few years. So I'm looking forward to the event, and I hope everyone else is too.
Leo Tucker:And if you're thinking about attending, there's a little bonus for you. You might just catch a glimpse of Melissa here at the, very conference.
Melissa Pottenger:So Yes. I will be on the digital wallets panel. Very excited.
Leo Tucker:Well, that sounds great. I look forward to the event, and, I think this is fabulous what you put on. So we'll, we'll talk soon, I'm sure. Andrew, Melissa, thank you both for joining me, and good luck at the conference.
Andrew Doukanaris:Thank you so much for having us.
Leo Tucker:And that's it for our show this week. If you've enjoyed this, feel free to give us a like. Go ahead and subscribe to our channel. And if you really liked it, hit that little bell at the bottom, and we'll let you know when we've got new content out. Thanks, everybody.
Leo Tucker:Talk to you soon.
Voice Over:Brought to you by the reach network. Visit with reach.com/network for more.