From The Mouths Of Matchmakers

Matchmaker Roundup

Though matchmaking platforms are nothing new — just think eBay, Craigslist and Amazon — the innovation and advancement of these marketplaces have made a huge impact on the way consumers and merchants operate in the retail space. This week, we take a look through the matchmakers that have shared their insights with us throughout 2016 to highlight some of the key influences marketplaces have made across both commerce and retail.

Matchmaking isn’t easy.

Though companies like Uber, Google, Visa, Airbnb, Facebook, Westfield Malls, NASDAQ and Microsoft make it look simple to connect those that want or need with those that can deliver, getting these platform-based businesses off the ground is tough.

Getting a critical mass of buyers on board and a substantial number of suppliers ready and willing to serve them can take years, sometimes even decades. In reality, the work to keep a balance on both sides is never really done — and many who try never make it out of the starting gates.

Throughout 2016, Karen Webster and David Evans, economist, MPD founder and coauthor of the number one new release on Amazon, Matchmakers: The New Economics of Multisided Platforms, have hosted The Matchmaker Is In series to gain insight into the business model from the stakeholders who keep it going.

As 2016 swiftly comes to a close, here are excerpts from some of the conversations Webster and Evans had with these payments and commerce matchmakers that we think everyone should keep top of mind in the new year.

Bridging The Gap Between Online And In-Store Promotions

It’s a retail problem that happens far too often — shoppers see a promo code or coupon online and visit that very same merchant to shop but once they arrive at the store they hit a (brick-and-mortar) wall. There’s no place at the physical point of sale (POS) to take advantage of those very same discounts and offers made available online.

Gregg Aamoth, CEO of POPcodes, said the issue is both an oversight and a technical challenge for merchants. Aamoth joined host Karen Webster to share how the payment terminal is helping to address the complexities that come with allowing consumers to use a promo code they receive online on the shopping they do at a brick-and-mortar location.

In thinking about the challenge of engaging customers, Aamoth saw the payment terminal as a device that could potentially be a huge connector — the key to creating a consistent, seamless shopping experience.

“Our focus is to make it seamless so that the consumer, even if they don’t have that coupon or loyalty card with them, can still connect in through a secure device and retrieve what’s been offered to them, whether it was a promotion or the ability to use their loyalty points,” he said.

In the online space, that promo code is available for shoppers and is pretty ubiquitous across every checkout screen. But on the brick-and-mortar side, there’s mostly the ability to scan barcodes at the POS. Aamoth said that the key to bridging the gap is to be able to do either, whether the consumer is in the online or in-store environment, and to do it in a way that doesn’t require a very complex integration.

“If you’re trying to do that across hundreds or thousands of different merchants and their hundreds or thousands of different POS systems, it’s extremely complicated to do on a one-by-one basis. So we worked from the payment terminal backward,” he said.

By working with the small number of terminal manufacturers and a handful of processors that have the lion’s share of the market in serving the 9 million or so SMB merchant market, POPcodes is able to leverage that common device: the payment terminal itself.

Catch more of the episode here.

Driving Payments At The Pump

Gasoline is one of those products, especially in a market like the U.S., that essentially sells itself. Consumers will always need to fuel up their cars — but where those consumers go to do the fueling and whether they will buy anything else at the station while they are there is still up for grabs.

The world of retail fuel-related commerce is ready to be disrupted, and Don Frieden, CEO of P97 Networks, shared how mobile technology and the cloud hope to make pay at the pump (and buy at the convenience store attached to it) a true difference maker in that disruption.

“Today, on average, only 30 percent of consumers who buy fuel at the pump go buy at the convenience store. One of our challenges is to connect to the other 70 percent of customers,” Frieden told Evans and Webster.

Reaching that other 70 percent, Frieden noted, is one of the issues at the heart of matchmaking in the retail fuel industry, as it brings together the essential challenge of the three stakeholders involved in the transaction: the fuel brands trying to build loyal customers, the station operator trying to boost margins by selling fuel customers a cup of coffee and the consumer who just wants to fill ‘er up as quickly and easily and cheaply as possible.

“The real challenge over the long term is the consumer — and how to get them to engage in mobile payments and then to repeat the use,” Frieden noted.

Getting them to download a fuel brand app wouldn’t hurt either.

P97 — and the ecosystem it powers — is looking to do just that by leveraging the mobile wallets that already exist (the usual cast of Pay players), and oil brand apps are the silver bullet. Those apps then become the digital platforms to serve marketing and other customer loyalty programs to those app users. Loyalty to the brand and upsell at the pump is the goal.

“The beauty of contextual commerce is that the sky’s the limit on how oil companies can create loyalty programs,” he added.

Catch more of the episode here.

Using Gifting To Ignite Card-Linked Offers

While card-linked offers have struggled to get traction for lots of reasons, Keith Smith, president of Wonder Technologies and card-linked offer veteran, had an idea as to why.

In theory, the fostering of a connection between merchants and customers by integrating offers directly into the network-branded account they’re using at the merchant sounds ideal. But as Karen Webster pointed out last year, these offers and promotions ecosystems have failed to turn the heads of a critical mass of merchants or consumers to get traction.

But Smith shared that gifting is the ignition that merchants and consumers need for card-linked offers to actually take off.

“One of the challenges of card-linked in its infancy was expecting consumers to go to their financial institution looking for value,” Smith explained. “It’s worked, but I don’t think it’s worked to the scale that everyone was hoping or expecting it would.”

Wonder’s technology platform combines card-linked, network-branded cards with gifting to overcome the five Rs of gifting: receiving, remembering, redeeming, repeat visits and re-engagement.

On Wonder’s platform, when a gift is received, a consumer can accept the gift and link its value to one card or several network-branded cards of their choice that they already have. This allows the gift to be attached to a payment vehicle that is most preferred by that consumer, instead of having to carry another card or remember where the digital gift card was stored.

“The fact that we can actually prove consumer intent based on the acceptance of the gift and the linking is very valuable,” Smith said, adding that this presents the opportunity for merchants to not just gift but also cross-sell in other parts of their business.

The goal is to empower merchants to move their customers through a growth process of increased loyalty — essentially helping develop prospective customers into brand advocates and eventually getting those consumers to the point where they are sending the gifts themselves.

“It’s helping people understand that there’s more to gifting than going to the grocery store and getting a gift card or going to a website and sending a digital gift,” he added.

Catch more of the episode here. 

Who Powers The Matchmakers?

Like the Gold Rush of the 1840s, there are those who dig for the gold and those who provide the tools and the supplies that give the miners all they need to strike it rich.

The truth is, matchmakers are only as good as the infrastructure and services that keep their matchmaking engines humming.

Bill Clerico, cofounder and CEO of WePay, shared his firsthand insight into what it means to play the role of enabling software companies and online marketplaces to offer payments to their users.

While the growing popularity of matchmakers is impressive, it’s nothing without those who bring the “picks and the shovels” to the matchmakers’ gold rush.

WePay is in the picks-and-shovels business.

Over the years WePay has pivoted from a focus on solving for a person-to-person payments use case to supplying.

“I like to call it an iceberg, where 80 percent of the work was done below the surface of the water on the back end to just deliver that 20 percent of functionality that the end users needed,” Clerico said.

Powering payments for a matchmaker requires a different set of skills and capabilities. Unlike single-sided businesses that have inventory and sell that to a buyer who visits their site, matchmakers have a bunch of buyers that need their credit cards charged and, at the same time, have sellers who need to receive payouts.

One of WePay’s challenges as a provider of matchmaker infrastructure is making sure that it remains one step ahead of what matchmakers will need to make their interactions with their buyers and sellers easier and more efficient.

Today, Clerico said, that is mobile.

“We’re always thinking about how we can make the [mobile] experience easier and more frictionless, specifically around mobile, because that’s been such a transformational force for matchmakers,” he added.

As a matchmaker-turned-power-player to thousands of matchmakers, Clerico has had a unique view into what makes a matchmaker sizzle or fizzle. Success, he said, can be attributed to one simple concept.

“The best platforms find ways to offer immediate value to suppliers before the buyers even come, and then they can focus on attracting buyers,” Clerico explained, citing the example of a software productivity tool that helps suppliers do their jobs better.

“The ones that fail don’t have a clear strategy about how they can add value before the network really takes off.”

Catch more of the episode here.

While matchmaking surely isn’t a job for just anyone, the advice from some of the industry’s experts show that with the right ignition, value and scale — marketplace platforms have the potential to truly take off. We look forward to seeing how the matchmaking economy will continue evolve over the next year, cheers to 2017!



The PYMNTS Cross-Border Merchant Friction Index analyzes the key friction points experienced by consumers browsing, shopping and paying for purchases on international eCommerce sites. PYMNTS examined the checkout processes of 266 B2B and B2C eCommerce sites across 12 industries and operating from locations across Europe and the United States to provide a comprehensive overview of their checkout offerings.

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