Interview with Daniel Wicharz
Daniel Wicharz works in the credit card industry and is currently the Vice President of an international acquiring bank. We have conducted an interview with him about the credit card industry and the changes it brought to point of sale as well as e-commerce payments.
How different is the credit card industry today?
The credit card industry has developed much over the past 6 to 7 decades. It all started in the 1950s when Ralph Schneider and Frank McNa mara set up a system we call nowadays Diners. This was in the beginning only a system for paying in a restaurant, but the entire concept spread all over the industries and all over the world. The reason is simple: People want to pay in a convenient way. Why carry all that cash with you?
What are the changes that credit cards have brought to point of sale and e-commerce payments?
Payments become easier and safer. To the Point of Sale: First of all, cards are a good prevention against theft. As long as you do not write your PIN code on the back of your card it is relatively unlikely that a thief can profit from taking your card away from you. Also, you can spend more than the cash you have in your pocket. Nobody ever had all his savings in his pocket. Now with cards, people can spend more and faster than in the past. That is also good for the merchants and even an instant credit is attached to the card which might be helpful especially if you intend to buy high-value goods.
In terms of E-Commerce: Here the cards made real-time online payments possible in the first place. Prior to cards, people had to wire funds to merchants. This caused immense effort on the buyers side and also put their funds at risk. Who wants to wire funds to a merchant for example in China who you do not know personally? With cards the payment is easy and you are protected by the rules of the card schemes (chargeback system,etc).
What is your background expertise?
I personally worked for many years in the online industry with a focus on online payments. Since 2015 I am Vice President of a global acquiring bank.
Which brands have you worked for, and which has been the best experience?
I personally worked for many successful brands in the past. Among them were Apple, PayPal , Google, Skrill and EVO Payments.
It is difficult to rate the companies and to say in which one I had the best experience. Generally, I would say that the more than 5 years that I worked in the Republic of Ireland was probably the best experience of all.
What inspires you to eCommerce technology?
The E-Commerce enables us to purchase services or goods all over the world. It is also a challenge especially when it comes to fraud prevention and also the many individual local payment options. Especially in Latin America and Europe there are plenty, dozens if not hundreds of local payment options. If you want to be a truly global seller you need to know how to deal with credit cards and international fraud prevention, but you also need to know about local schemes and fraud prevention for those options,too. I personally -being a European- had the pleasure to learn about the Alternatives as well as the credit cards. To give an example of how important the Alternatives are: There are large European countries where direct debit and their varieties accumulate to 90% of the POS transactions. So you see that even if the remaining 10% are credit cards, you cannot exclude the 90% of local payment options in these particular European countries.
What is your advice to entrepreneurs embarking on eCommerce payments for the first time nowadays?
I would first of all make sure I cover my risks by adding a comprehensive fraud prevention engine to my payment system. It is stunning what you can do nowadays with IP, BIN and velocity checks. The systems figure in real time what for instance the keyboard language, the language of the windows system and the IP address are. I give an example : The buyer is located in Switzerland, the IP is from China and the windows language is in Russian. How likely is it that the transaction is fraudulent? :) I leave the answer to the readers.
The next advice: Check your core markets and see which payment options are relevant there. Then get in touch with all relevant schemes, set up bank accounts in these markets (for many online banking options you might need that) and get a good rate from the provider.
Last but not least understand the payment options. Especially when it comes to credit cards the scheme rules are sometimes a challenge. But you need to know what a domestic, intra and inter-transaction is. You need to know how to defend a chargeback and you also want to know what interchange and scheme fees you pay. Also, the penalties of the schemes should be (at least briefly) known to you. Otherwise, you operate like a pilot who does not know his route. A local payment advisor can be of tremendous help and save a lot of your money.
For contacting Daniel Wicharz add him on LinkedIn.
