Latest / The Payments Shed / Ep. 64 - LIVE from FTT Payments with Commerce: Beyond the Checkout - How Commerce Platforms are Rebuilding the Merchant Experience

Transcript

Ep. 64 - LIVE from FTT Payments with Commerce: Beyond the Checkout - How Commerce Platforms are Rebuilding the Merchant Experience · The Payments Shed

• 0:04
  Welcome to the Payment Shed podcast live from FTT Embedded
• 0:07
  Payments and Super Apps. Michaela Webber, you are our
• 0:11
  first guest on the show. Today.
• 0:12
  We have Brian Guthrie Co hosting with me and Justin's over in
• 0:17
  Greece sunning himself. So welcome brain as well to the
• 0:20
  Baby Chip podcast for the first time.
• 0:21
  Please can you introduce yourself, tell us a little bit
• 0:23
  about your, your background and your your current role at
• 0:26
  Commerce as well? Sure.
• 0:27
  Thanks so much for having me. It's great to be back at at FTT,
• 0:31
  such a busy show today. I'm Michaela Weber.
• 0:34
  I'm the Senior Vice President of Payments at Commerce.
• 0:37
  Commerce is a software company with our sub brands Big Commerce
• 0:42
  Phenomics and Make Swift and we're focused on helping
• 0:45
  companies sell in an e-commerce space and also a list and show
• 0:50
  their goods on marketplaces and optimize their their marketplace
• 0:54
  fee. So thrilled to be here.
• 0:56
  My background is payments actually.
• 0:58
  I used to work with Justin at Worldpay and then was at Molly,
• 1:03
  the European focus scale up, and now stepped over to the
• 1:07
  e-commerce software side to support merchants who are
• 1:10
  selling online the color. Very good, very good.
• 1:14
  And you guys sit kind of right at the intersection of commerce
• 1:17
  platforms, payments and and merchant growth.
• 1:20
  Let's start with how commerce itself is evolving, shall we?
• 1:24
  And we're seeing famous become increasingly embedded, which is
• 1:27
  one of the the subject matter of today's event, right?
• 1:31
  When we look at the merchant economics that we see in the
• 1:35
  market with embedded, how do you guys look at that currently in
• 1:38
  this space? Great question.
• 1:40
  And actually, as Bing Commerce, we recently launched our own
• 1:43
  embedded payment products, Bing Commerce Payments, which is
• 1:46
  powered by PayPal. And that's really focused more
• 1:49
  on our SMB customers who are looking for a bit more of a
• 1:52
  turnkey bundled solution that's going to give them Apple Pay,
• 1:56
  Google Pay, PayPal for our US merchants, Venmo, Afterpay,
• 2:00
  Karna right out-of-the-box. So it's a nice way to get
• 2:03
  started, ensure you've got an optimized payment sack.
• 2:06
  I think the embedded experience #1 the real criticality is
• 2:11
  merchant experience. So if you're going to be
• 2:14
  launching an embedded product, it has to be easier and solve
• 2:17
  pain points for merchants. One of the things that we've
• 2:21
  seen with our big commerce payments is for our smaller
• 2:24
  customers, they love having an embedded dashboard right in
• 2:28
  their control panel where they manage their e-commerce site.
• 2:31
  So it's much easier for them than switching constantly
• 2:34
  between a payment portal and their control panel.
• 2:39
  For our larger, more complex merchant, they're used to the
• 2:43
  complexity, right? They're they're maybe not as
• 2:47
  focused on taking away some of those points of friction.
• 2:50
  And so I think embedded is an amazing tool for software
• 2:54
  companies to make things easier for their merchants.
• 2:57
  But you have to know your merchant and know what their
• 3:00
  pain points are and where you're solving a problem versus a
• 3:03
  merchant that is larger. And we work with multibillion
• 3:06
  dollar merchants for whom that complexity of having a separate
• 3:10
  payments portal is not something that is a challenge for them.
• 3:14
  So all depends on making your merchants life easier, solving
• 3:17
  their pain points. And that's been been our focus
• 3:20
  area. Especially what we're seeing
• 3:23
  right now is that we're moving away from where payments used to
• 3:27
  be just this both on feature to an e-commerce platform to now be
• 3:32
  much more integrated or embedded within the entire space.
• 3:35
  And that's of course why we're also here at this conference as
• 3:38
  well. How does that change how you
• 3:41
  develop that core products? As a?
• 3:43
  As a. Platform, yeah it's a great
• 3:46
  perspective to have which is understanding that so we're
• 3:50
  merchants that are selling online and and for any merchants
• 3:53
  consuming software payments is absolutely critical.
• 3:57
  And so making sure that again, you are providing A merchant LED
• 4:02
  merchant first lend with development, whether that from
• 4:06
  AB to B perspective, you know, developing embedded invoicing,
• 4:10
  making it easier for small B to B merchants to offer credit
• 4:13
  cards, pass on a compliance surcharge in regions where that
• 4:18
  is is legal, things like that. I think it's it is really a
• 4:22
  focus on being able to consolidate resources.
• 4:26
  So at big commerce, we have over 70 payment integrations.
• 4:32
  And one of the things we've been focused on this year is reducing
• 4:36
  the core number of partners that we work with.
• 4:38
  So we can really invest in those integrations, ensure that
• 4:43
  they're offering the full pay, Google Pay as table stakes,
• 4:46
  right, the right wallet that merchants are seeing competitive
• 4:50
  off rate that they're able to grow their business.
• 4:54
  Because one of the things that we saw when we looked at the
• 4:57
  data is, is the merchants that we work with who use our
• 5:01
  largest, most global payment platforms, they actually have
• 5:04
  higher net revenue retention on our software products.
• 5:08
  Those merchants are healthier, they grow faster, they're more
• 5:11
  satisfied with their software. And so we're really trying to
• 5:14
  take those principles and ensure that they're working with
• 5:16
  payment providers, they're going to match their level of growth
• 5:20
  and investment because we all know that it takes quite a lot
• 5:23
  of people to run a payments business.
• 5:25
  And in today's environment, not everyone is investing equally.
• 5:29
  So it's important for merchants to really choose providers that
• 5:32
  are investing and innovating as the industry is moving so
• 5:36
  quickly. And do you think those merchants
• 5:38
  are starting to see payments more of a or as a revenue driver
• 5:42
  rather than just a cost center now as well?
• 5:45
  I wish I could tell you that I don't continue to hear the
• 5:49
  notion of paying more for payments as a barrier to moving
• 5:53
  to a more modern payment provider.
• 5:56
  That is still often, you know, the first thing that comes out
• 5:59
  of people's mouths is I'm getting this great rate from
• 6:02
  provider X. They also do our banking.
• 6:04
  They're also doing all these things for us.
• 6:07
  So I'm willing to move payment providers, but I don't want to
• 6:11
  pay more. And so one of the struggles is
• 6:14
  orienting and positioning with the value.
• 6:17
  What does it mean to have your conversion rate increased to
• 6:21
  have better authorization, to be able to show more payment
• 6:25
  methods to your customers and allow them to pay the way they
• 6:28
  want to pay. So some merchants I feel are
• 6:31
  there and are, are starting to understand, but there still is
• 6:36
  especially given how challenging the macro is ACFO level
• 6:40
  discussion, which is I don't want to pay a penny more for
• 6:44
  payment and if it's hard to work through.
• 6:46
  So I think we're making incremental gains.
• 6:49
  But I wish I could tell you that everyone is 100% aligned with
• 6:52
  this notion of driving value and and the value of payment.
• 6:56
  It is seen as a cost center in some businesses still.
• 6:59
  Especially the last, I would say 12 months, we're seeing agentic
• 7:03
  commerce of course being a big part of the payments
• 7:06
  conversation, the commerce conversation.
• 7:10
  And we're seeing especially now disrupting discovery and the way
• 7:14
  that it's being bought with platforms like a chat, QBT and
• 7:17
  otherwise launching their own products, pulling back out of
• 7:19
  the market loss about M BS, of course launching their own
• 7:22
  protocols, especially in Google and Stripe as well.
• 7:25
  My question to you is that how are you doing that and how do
• 7:28
  you think AI and especially within these will phase of
• 7:31
  agentic commerce, how's that impacting what you're working
• 7:34
  with? Agentic commerce has been such a
• 7:37
  hot topic. I've been talking at a bunch of
• 7:38
  conferences. I think you and I were on a
• 7:40
  panel recently, Dwayne, talking about this topic.
• 7:43
  So one of the things that we've seen in the data is agentic
• 7:48
  discovery is here to stay and it's here in a big way.
• 7:51
  So the real focus for merchants is how do I ensure that when a
• 7:56
  consumer is making a query in an LLF, whether that Perplexity
• 8:01
  Copilot Gemini that my products are showing up.
• 8:04
  And the challenge with that is similar to selling in multiple
• 8:09
  marketplace channels, each of the LLMS require different data,
• 8:14
  product data taxonomy. And so you're managing 5 or 6
• 8:19
  different systems, trying to understand what's going to work
• 8:22
  with these LLMS to increase the how you can surface your product
• 8:26
  catalog. So actually our phenomics
• 8:28
  business is really focused on helping our merchants, but we
• 8:31
  today optimize their marketplace feeds, helping improve
• 8:34
  visibility in a gentic channel. So agentic for discovery
• 8:40
  absolutely here to stay. And merchants should be very
• 8:43
  focused on ensuring that their product catalog data is orderly
• 8:48
  and in a way that's easily consumable from the LLM.
• 8:52
  Because what attracts a consumer to your gorgeous brand website
• 8:56
  is not necessarily the data that's going to get you surfaced
• 9:00
  in an agentic search. Your the agents don't care how
• 9:04
  beautiful your the visuals are on your website.
• 9:06
  Your consumers do. Do they have to be careful
• 9:08
  though, because if they're really pivoting and, and looking
• 9:10
  at those storefronts that they have and the user journeys to
• 9:14
  gear them up for agentic shoppers, you're still going to
• 9:18
  have people that don't trust agentic or don't want to use it,
• 9:20
  right? So you have to find this happy
• 9:21
  balance of what you're changing on your storefront.
• 9:23
  So I think agentic shop so agentic discovery in product
• 9:28
  taxonomy, right? It's making sure that I'm using
• 9:30
  the right colors to describe the blue on this sweater and the
• 9:34
  features and functionality and that that data can get surfaced
• 9:38
  by the agents agentic commerce as me sending my robot out to
• 9:43
  buy the Navy blue sweater. That's one where while we have
• 9:48
  seen some agentic use cases for buying now within an LLM browser
• 9:54
  session, so we're actually live with with a customer on
• 9:57
  perplexity. We're working with some
• 9:59
  customers with Stripe to ensure they have quick bike and
• 10:03
  functionality within that LLM session.
• 10:05
  We're really not seeing that as a use case.
• 10:08
  We're seeing consumers right now still want to go to the brand
• 10:11
  website, experience it and have their check out.
• 10:14
  I'm personally really interested in the agentic commerce use case
• 10:19
  of sending my agent out to do kind of rudimentary utilitarian
• 10:25
  commerce tasks. So booking a hotel within 10
• 10:29
  minutes walking distance of this conference.
• 10:32
  That's the merit of Envoy, so I can earn points, you know,
• 10:35
  within my corporate price policy.
• 10:37
  I think those use cases, we are going to see quick adoption once
• 10:41
  we figure out how you're going to be able to validate that my
• 10:45
  agent is a good actor and I have actually initiated this
• 10:49
  transaction. There's a lot of regulatory
• 10:51
  stuff to still work through, but the notion of me sending my
• 10:54
  agent out to do more product discovery and purchasing, I
• 10:59
  think that that makes merchants nervous because the fraud
• 11:02
  implications there. And as a consumer, I'm not sure
• 11:06
  I'm ready for my agent to go out and and make some of those more
• 11:10
  discretionary purchases on my behind.
• 11:12
  So while identity commerce is definitely something that I'm
• 11:16
  equally as excited about, it still feels a little bit, you
• 11:19
  know, in the in the distant future.
• 11:21
  However, what we've seen recently with Entropic, with
• 11:25
  open AI launching new models taken over different aspects of
• 11:31
  code development as well as just engagement and conversion as
• 11:36
  well. What are other ways of AI that
• 11:38
  you're currently implementing on your platform to increase
• 11:41
  conversion and to increase engagement that you've seen so?
• 11:45
  We offer using AI tooling, I mean both as as teams.
• 11:49
  I think one of the advantages of being a relatively small tech
• 11:52
  company is we have very early adopters in terms of essentially
• 11:57
  having clawed in this case kind of run our lives a little bit
• 12:00
  and and help reply to our emails.
• 12:02
  And it's really, and on the coding side with our engineering
• 12:05
  team was really using all the AI tools from a merchant
• 12:08
  perspective, it's developing tooling to help our merchants
• 12:14
  create purchase orders more easily, semantic search, right?
• 12:18
  Being able to really use some of the new AI modeling to make it
• 12:22
  easier for merchants to run and optimize their website and also
• 12:27
  to analyze their business and, and implement changes.
• 12:30
  So it's been an exciting time for us to see how quickly things
• 12:33
  are moving and look at the velocity with which we're
• 12:37
  shipping products now, both in the past few months and then
• 12:41
  also with our road map in the next 6 months.
• 12:43
  And there's a big debate in commerce at the moment around
• 12:45
  open ecosystems versus all in one platforms.
• 12:49
  How do you guys tend to think of that trade off by commerce at
• 12:52
  the moment? So I mentioned earlier that we
• 12:54
  didn't launch our own embedded payment product and that's
• 12:58
  that's optional, it's not required.
• 13:00
  And that's really focused on more of our small businesses
• 13:03
  that are looking for a optimized pay stack because they want to
• 13:07
  spend their time running other aspects of their business.
• 13:10
  I would say for larger enterprise customers, we still
• 13:14
  see the complexity of their business is not suitable for a
• 13:19
  closed single provider ecosystem.
• 13:22
  You know we have many businesses that need to be multi channel
• 13:25
  acquired that are selling in over 120 a 140 countries and
• 13:30
  territories globally. That doesn't lend itself to a
• 13:34
  single solution. These are very dynamic
• 13:36
  businesses that may have no specific requirements.
• 13:40
  To use Oxo in Suko and have a different distributor and
• 13:45
  different payment methods in Indonesia and to have a
• 13:49
  one-size-fits-all solution can be quite challenging, Especially
• 13:52
  then when you bring in B to B, which is a whole different
• 13:55
  animal in terms of the current B to B processes where we think B
• 14:00
  to B could go. So, you know, our position is we
• 14:04
  want to make it easier for merchants who are interested in
• 14:07
  choosing a kind of preset payment stack for them to to
• 14:12
  turn key run their business. But also want to make sure that
• 14:16
  those merchants still have free choice to choose a provider that
• 14:20
  works well with their big commerce storefront.
• 14:23
  On the enterprise side, you know to bring their own provider and
• 14:26
  and optimize that way. As you mentioned already, your
• 14:29
  your platform of course skater for SMB, but you're also
• 14:31
  enterprise customers as well. And what are you seeing in their
• 14:35
  preference? Are they looking much more for
• 14:37
  simplicity or flexibility when it comes to utilizing real
• 14:41
  product? So I would say the enterprise
• 14:43
  side is flexibility, right, and continues to be for platform
• 14:48
  customers. So customers that come to us for
• 14:50
  the big commerce software products, they want that
• 14:52
  flexibility. They're often running more
• 14:54
  complex businesses. They may have huge numbers of
• 14:58
  skews customizations. We work with customers who are
• 15:03
  selling cut to order pipes online, right?
• 15:06
  It's actually a really tricky challenge to have the right
• 15:09
  number of skews to allow you to cut pipes to the centimeter and
• 15:13
  put that in a basket. We work with some customers who
• 15:17
  aren't doing travel money, allowing you to check out with
• 15:19
  mixed baskets of prepaid cards and cash.
• 15:22
  So that flexibility is something that those merchants need to run
• 15:27
  their business. If you're selling socks in a box
• 15:30
  on a monthly subscription, you know, you can take a kind of
• 15:34
  standard payments product. I think we we all know like what
• 15:37
  would do good conversion? What would improve your
• 15:40
  conversion? You know, having Apple Pay,
• 15:42
  being able to let your customers manage their subscriptions
• 15:46
  easily, especially in a single market or a couple markets.
• 15:50
  That's quite simple, but more complex businesses, they require
• 15:54
  more flexibility and there's a lot of moving pieces there.
• 15:58
  Especially for us, we work with a lot of businesses that may be
• 16:01
  hybrid, so they may have a direct to consumer business, but
• 16:04
  also AB to B business. And so that requires flexibility
• 16:08
  as well. That's a good segue into you.
• 16:10
  You mentioned B to B briefly, but B to B is obviously having
• 16:14
  this massive boom at the moment from a payments point of view,
• 16:16
  despite it being a more complex space.
• 16:18
  What do you think is leading to that breakout boom in B to B
• 16:22
  payments and maybe more products or services starting to feed
• 16:25
  into that B to B space? I think the thing about B to B
• 16:29
  payments has always been that the Tam is outrageously large,
• 16:33
  right? I think we've been hearing for
• 16:35
  the past 20 years that the Tam is, you know, billions upon
• 16:40
  trillions of dollars. The interesting thing with some
• 16:43
  of the recent AI developments is so much of B to B is still very
• 16:49
  manual that what we're seeing is B to B merchants able to
• 16:54
  implement new processes that they did.
• 16:57
  They used to have, you know, a manual clerk doing purchase
• 17:00
  orders where they're able to make step changes in terms of
• 17:04
  how they are making our businesses more efficient,
• 17:08
  managing headcount on the expense side, you know, being
• 17:11
  able and then also just have processes that move faster.
• 17:15
  We've worked with some businesses who were manually
• 17:18
  boarding new customers and it was taking them weeks.
• 17:20
  That's weeks that are extending your time to be able to capture
• 17:24
  revenue from a new customer. And you can get a a agent that
• 17:29
  can help you with some of that boarding and AI process same day
• 17:34
  that's actually improving your overall revenue cycle.
• 17:37
  So B to B is an area where we're, we're really excited
• 17:40
  about some of the AI and automation development, but
• 17:44
  there's still quite a lot of room to grow.
• 17:46
  So there's a lot of white space, a lot of the merchants that are
• 17:49
  still on the B to B side using manual processes have a very old
• 17:54
  ERP system, have a lot of customization and it takes a lot
• 17:58
  of effort to modernize those systems.
• 18:01
  But once you do, the businesses are really flying.
• 18:04
  So we're we're really excited to be working with some of our our
• 18:07
  B to B merchants on cutting edge implementation on some of their
• 18:11
  new processes. I think the the final question
• 18:13
  that is up to. You know you're made in shelf of
• 18:16
  shame, but. Absolutely.
• 18:18
  So before we let you go a part of the show that we call the
• 18:21
  Shell the Shelf of shame, what frustrates you the most about
• 18:26
  the payments industry right now? So what really grinds your
• 18:29
  gears? So my number one payments pet
• 18:32
  peeve is when in a checkout environment and I have this
• 18:38
  because my dog is on special food, there's only a couple
• 18:41
  websites in the UK that offer it.
• 18:43
  If you ask me to choose my card type in an online checkout,
• 18:47
  obviously you should already know my card type through the
• 18:51
  plan. I shouldn't have to take that
• 18:53
  step. It's a huge point of drop out in
• 18:56
  friction. And once every month I need to
• 18:59
  go and reorder this dog food. And I go through this and I and
• 19:02
  I actually many times have thought about writing them a
• 19:04
  note and saying, look, you need to call your payment provider
• 19:07
  and tell them they need to update your implementation.
• 19:10
  So for me, it is still requiring customers to choose a card type
• 19:15
  and check out. It's an unnecessary point of
• 19:18
  friction. We've moved past it.
• 19:20
  I 100% agree. Yeah, that is definitely going
• 19:23
  to go on the shelf. I only know button up box.
• 19:25
  So I'm going to be going on on these these round of the sites
• 19:28
  and looking for which one's doing that.
• 19:29
  And we always ask where people can get in touch with you and
• 19:32
  find out a little bit more about your your business commerce in
• 19:34
  this case as well. Sure.
• 19:36
  Michaela Weber on LinkedIn with 1B Weber.
• 19:41
  Would love to hear from people at connectandcommerce.com is our
• 19:45
  website where you can go to learn more about commerce, So
• 19:49
  big commerce, speedanomics and mix legs.
• 19:51
  Well, thanks for joining us on the show and enjoy the rest of
• 19:53
  the event today.