Kevin Gallagher SVP BD of 2Checkout has seen a lot in the payments and commerce industry. He has worked in various firms in this space starting with first data in the sales division, then Nations Bank, United Merchant service and also JP Morgan chase payments. Later joined Merchant e-solution who were into developing e-commerce solutions. The company was sold to a Brazilian firm called Cielo for $680m. Currently at 2Checkout as SVP of Global Business Development he says one of the reasons he joined the firm was because Few Payment Gateways Cover 196 Countries even when Cross-Border Trade is Booming.
In an Interview with Let's Talk Payments he talked about 2Checkout value proposition and other developments.
Topic: 2Checkout helps the merchants to sell online across countries - managing currencies, language and other issues
2Checkout is into handling online payments for merchants on a global scale. With our solution merchants can accept payments in 196 countries. Offering merchants and their customers a way to pay from any of these countries through the same interface, methods and same support. 5 to 10 years ago, this was quite difficult. But currently, we provide this ability as the cross border Ecommerce is growing. Different currencies across varied countries are handled through a unified solution by 2Checkout. Localizing the consumer experience at checkout is helping in bridging the gap that existed between buyers and sellers from different countries.
Topic: People in Russia, India, China and SE Asian countries have started shopping on international ecommerce sites and cross-border stores. The uptake of global e-commerce is growing.
Response: We are helping merchants globally. The difficulty for merchants was in getting localized payment processor. Regional acquirers were used to handle language, currency conversion. Whether the merchant is big or small, it is now easy with us to setup using a single global payment processor for handle customers across the globe.
Topic: Lets take a case study. There is an online market research vendor in US who sells reports online. He enrolls into Braintree $50000 free program with no setup fees and no cost of transaction. But there is a lot of additional work to be able to design and develop the checkout functionality. Another case is that of an online training and education company in tech sector which trains people across the globe by running online courses. The company is facing issues setting up payment gateways in different countries. How 2Checkout can help in these scenarios?
Response: Firstly, most of the players are partially international. We provide merchants with different methods to get up and running. We give a simple and easy to setup standard checkout system. Customers can use our shopping carts with their information being on our server and not on that of the merchants. Customers then feel safe making transactions knowing their data is secure.
We do provide other solutions for checkout. For e.g., the second option is where customers, during the end of their online checkout, are served a popup option asking for payment data. That again uses our own server for payment purpose. We also provide merchants with 3rd party shopping carts. We have partnered and integrated with 3rd party shopping carts like Shopify and Magento. We provide APIs as well to companies in order to facilitate their own development initiatives. The exclusive programming across regions is then integrated into one account setup. We are merchant processors and we are the only one who would be required during setup for reporting and customer service.
Topic: Digital goods sales is growing across the internet, things like apps, whitepapers, music, content, etc. Besides micropayments, one issue for these new merchants and developers is to be able to handle this on a global scale.
Yes, 2Checkout is well aware of this trend and is moving in a direction to enable people to purchase digital goods online globally. Sale of products at low cost of transaction is the challenge especially costs pertaining to use of credit cards. It is difficult for the merchant to sell only one product at low cost of transaction. Companies are currently trying to do aggregation of transactions. For e.g. Apple could wait to see if you buy multiple songs and then aggregates the transaction performing it for the total no. of digital goods purchased. Difficulty lies in handling cost of transaction at micropayment level. But we are doing that and we have few customers in that area.
Topic: How different are you from Paypal which also provides payment facilities internationally to merchants? is it about pricing or something else…
Response: The pricing is not a differentiator. We have a quality product with lots of features for merchants. We provide a robust fraud solution for free as a part of our payment gateway. Our fraud solution consists of 300 different rules and variables. We provide merchants with different ways to checkout. We are providing more methods, languages and currencies than anybody else.
Topic: Fraud has become a very important aspect today. Are you saying that your fraud detection and prevention is better than others. And why?
Response: We are able to handle fraud better than others. Its not only about the engine and analytics but the fact that we have 14 years of experience handling it. Our negative databases and rules and ability to track fraud is better than the newcomers. And also our advantage is that we are global. So we do have analytical data on a global scale. That’s how we create the big difference. Our experience spanning over 13-14 years helps us.
Topic: What was the reason behind Series A funding happening after so many years of inception?
Response: Company already had a great foundation. We matured quite a bit during this time. The key was that we needed to really scale globally and that’s what excited the investors. Hence, resources were put into us to scale up our operations. We think we are on a solid growth path now. On 24th April 2014, the company had announced that it had brought in its final piece of its $60 Mn funding round which was led by Trident Capital and Chicago Growth Partners. Alan Homewood, the founder of 2Checkout, is currently the chairman of the company and Shawn Budde holds the CEO position.
Topic: Finally what are the key trends in the market. What will be your focus areas?
Response: A lot of companies are selling around the globe. Its a global marketplace. They need a partner to handle payments. One unified integration is what they need and thats a key trend among companies in the market. We have a headstart over majority of the competition. With paypal, there is co-opetition. We also aim to help in the growth of global e-commerce. We want our platform to reach a wide global scale to serve large number of merchants successfully.
2Checkout recently announced that shopify, the leading commerce platform that allows anyone to easily sell online, in-store and anywhere in between, has integrated 2Checkout global payments option into its platform.