Choice of products, validation of the basket and online payment. This is the tip of the iceberg for a customer who makes a purchase from an online sales site.
Mustapha Badr-Ezzaman is Director of Operations at Vantage Payment Systems (VPS), a fintech specializing in issuing innovative online payment and cash payment solutions, and in managing prepaid programs on private and open networks. He dissects for Médias24 the payment chain when a consumer buys online.
Let’s start with the beginning. First there is the cardholder: you! You have validated your “basket” and wish to pay online. You then land on a page where you enter your bank details: this is the page of a fintech called “Payment service provider” (or PSP), which the e-merchant uses to offer different means of payment, including online payment.
The information entered from the payment card (name, bank details, expiry date, pictogram), as well as the other elements of the transaction, such as the amount, the address and the identifier of the acquirer, are transmitted to a card system called MPI, through international processors like Visa and MasterCard.
This information finally reaches your card-issuing bank, which generally sends you a single-use code by text message: “We are talking here about 3D Secure V1 verification, a system for securing online payments. In our region, the ecosystem is in the process of migrating to 3D Secure V2, which corresponds to an evolution of the current V1 authentication”, explains Mustapha Badr-Ezzaman.
Once the authentication has been confirmed, “the PSP transmits the cardholder’s information to another fintech, called the payment acquirer, such as the Center monétique interbancaire (CMI), incumbent operator in the field, or, more recently, NAPS (operator non-bank specializing in electronic means of payment, editor’s note)”, he continues.
The payment acquirer in turn transfers the request authorization from your bank issuer via:
– the HPSS National Switch in the case of a Moroccan card;
– international processors in the case of a foreign card such as Visa, MasterCard, AMEX, etc.
They contact the issuing bank to check the availability of funds. Once you get the green light from your bank, the transaction is approved and the payment made. “This communication and validation process between the different platforms is done in a few seconds,” says Mustapha Badr-Ezzaman.
What is the role of the payment acquirer?
The acquirer is a payment institution which allows, among other things, to accept online payments. “The acquirer is the intermediary between the e-commerce site and the banks (that of the merchant site and that of the customer): the e-merchant opens a payment account with the acquirer, similar to a bank account but who can never be a debtor. When the issuing bank debits the buyer’s account, the e-merchant does not receive the payment directly. It is placed in the payment account, and it is then the acquirer who is responsible for transferring the amount to the e-merchant’s bank account,” explains our interlocutor.
Thus, in the event of a problem (non-compliant product, late delivery, etc.), it is the buyer who guarantees the repayment of the buyer. “It’s like an online payment mediator. It does not automatically agree with the buyer. The responsibilities of each party are defined using a procedure called Chargeback. We must certainly protect consumers from scams, but also e-merchants from abuse, ”says our source.
Also, the buyer assesses the risk related to the activity of the e-merchant and applies a deposit in the form of an amount generally blocked during the first transactions. It thus guarantees the security of payments and protection against fraud.
Commissions for an online transaction
The technical integration of a payment platform depends on the profile of the e-merchant. If it is small, it launches into e-commerce, generally using CMS in SAAS, easy to use, where it integrates the product part, the blog, etc. “For this kind of merchant, we offer a payment module plugin that works after 15 minutes. This type of integration is the most adopted by e-merchants in Morocco”, underlines Mustapha Badr-Ezzaman.
When the e-merchant is informed and has technical knowledge, he generally calls on a specialized agency which integrates specific functionalities as needed. “We offer payment APIs (API being the acronym for Application Programming Interface), that is to say application programming interfaces where the payment process is more fluid,” he notes.
Finally, large accounts generally use what is called “low-level API”, which offers programming freedom and agility in terms of the customer experience. “This requires extensive knowledge of electronic banking and some certifications in electronic banking and security, such as PCI DSS (payment card industry security standard). We offer this payment solution in particular to Glovo, in Morocco”, specifies the expert.
How much should an e-merchant who wants to integrate an online payment solution pay? In addition to the set-up costs, “a commission of 0.5% is generally applied to each transaction by the PSP”, it is specified. According to CMI data, the acquirer charges 2% for a Moroccan card and 2.75% for a foreign card.
In the end, for an online sale at 100 DH, the e-merchant is paid 97.5 DH for a Moroccan card and 96.75 DH for a foreign card.
“Legally speaking, no invoicing to e-merchants has been imposed by Bank Al-Maghrib, or by international processors such as Visa and MasterCard to acquirers or PSPs. Each of the stakeholders (purchasers and PSPs) is free to charge for its offer what it deems correct. It would not be illegal to offer the service at 0.1% or at 5%”, insists Mustapha Badr-Ezzaman.
The e-merchant who wants to offer online payment must absolutely be a legal person. It informs the membership procedure with the purchaser and the PSP, who check the eligibility conditions. If the request is validated, a declaration is sent to Visa and Mastercard by the acquirer or by the PSP. Once the e-merchant has been validated, the purchaser assesses the risk: “We must protect the Moroccan consumer by applying guarantees to the e-merchant”, recommends our interlocutor.
Although e-commerce is gradually becoming more commonplace, online payment remains minimal compared to payment in cash, according to professionals in the sector. “Payment is the decisive step in the shopping experience on an e-commerce site”he observes.
Mustapha Badr-Ezzaman believes that all players in the e-commerce value chain have a share of the responsibility: “From the cardholder who prefers to pay in cash for fear of being scammed or having their bank details stolen , to the government which must operationalize its e-gov payment services via banks which do not offer suitable products, insurance and complicated procedures in the event of a problem, or e-logistics which must be adapted to the requirements of immediacy expressed by customers. »
Online payment remains a lever of performance and growth for companies. “An optimal shopping experience requires a simple and secure payment process, because if online commerce knows no geographical borders, Moroccan e-merchants must try internationalization. But that is another subject, ”concludes our interlocutor.