Payments: An Ever-Changing Landscape
For over twenty years, the world of payments has been undergoing continuous renewal, which is far from complete today. What was initially a limited set of traditional methods has become a complex, international, and constantly changing ecosystem.
I recently had the pleasure of speaking about payments during InPublishing’s webinar on eCommerce. Following that session, I would like to look back at the major milestones in payments through the evolution of Advantage, observe the latest trends, and ask the fundamental question: with so many new proposals constantly emerging, is there a strategy that best suits the interests of publishers?
20 years ago: simple and limited payments
When I started working with AdvantageCS in 2006, Advantage offered very few payment methods. There were checks and credit cards (bank cards). At that time, the company was implementing direct debit for the first time with an English client, which was essential to meet the needs of its new European customers.
This was the starting point of a major transformation. Very quickly, the challenge was no longer just to add payment methods, but to adapt to local and European realities.
The rise of direct debit and European harmonization
Direct debit has become one of the main drivers of Advantage's development, adding a new standard with each new customer in a different country. Initially rolled out country by country—France, Denmark, Sweden—it was then profoundly impacted by a major project: the introduction of SEPA direct debit in 2014.
Today, a large majority of European customers use SEPA direct debit to manage their subscriptions. Although direct debit (usually automated) is sometimes perceived as an outdated payment method, it remains extremely relevant for recurring models: reliable, inexpensive, and without the friction of card expiration dates.
The evolution of credit cards: security and outsourcing
Credit cards have also undergone significant changes. Originally, card numbers were entered directly into the platform. This practice reflected the reality of customers at the time, who often organized themselves to process card payments internally, via their own teams. The increase in fraud stimulated the evolution of the international regulatory framework. New security standards emerged, notably requiring PA-DSS compliance. In this context, AdvantageCS implemented a card security system, CardVault, to enable a faster certification process.
However, another development disrupted this approach: the emergence of new payment platforms that completely outsource the entry and storage of credit card details. Now, Advantage no longer handles sensitive data, but only tokens. The PA-DSS standard has thus lost its relevance, and direct card management has gradually disappeared from the core application.
More recently, the widespread adoption of PSD2 standards and the implementation of 3D Secure have further enhanced card security. But the issue of security is far from resolved.
The revolution in electronic payments and wallets
Concurrently, other major developments were taking place. Checks were replaced by alternative forms of payment such as bank transfers, but the real revolution came with the emergence of electronic payments, more commonly known as digital wallets.
Wallets were not new. The first digital wallet, PayPal, was created to facilitate digital payments and meet an increased need for financial security on the web. Subsequently, digital wallet development was largely driven by the shift to mobile eCommerce, with some wallets offering a much better user experience.
For Advantage, the first major turning point was the integration with PayPal, followed by solutions such as Klarna and other similar players. These new payment methods often relied on existing mechanisms (cards, direct debits) in the background while adding a layer of intermediation, promises of security, and a simplified user experience. Some of these methods were strongly rooted in national contexts; Klarna, for example, first developed in Scandinavia. Then came global players such as Apple Pay, Google Pay, and Amazon Pay, further diversifying usage.
The rise of multimode platforms...and their limitations
Starting in 2016, multimodal payment platforms such as Stripe entered the payment scene. These platforms took into account the proliferation of solutions and the difficulty of maintaining specific point-to-point integrations for each one. These players promise to outsource technical and regulatory complexity and significantly simplify integration for software publishers. They offer to manage a multitude of payment methods (Stripe manages more than 125) through a single flow, thus avoiding the development of integrations — in theory, anyway.
This convenience comes at a price. Credit card fees remain high, and these platforms can prove costly in the long run. They also require specific developments for certain types of payments that they manage.
New upheavals: sovereignty and alternatives to bank cards
Today, new transformations are taking shape. In Europe, the future of credit cards is being questioned primarily due to issues of European sovereignty. Dependence on American players such as Visa and MasterCard is pushing Europeans to develop alternatives.
The most promising initiative is Wero, a secure instant transfer system similar to iDEAL in the Netherlands (which supports more than 70% of eCommerce transactions). But unlike iDEAL, which is strictly limited to Dutch banks, Wero would be pan-European. iDEAL has joined the project and will be renamed iDEAL Wero.
Wero is designed for one-off payments. For direct debits, SEPA remains the best option. However, for single eCommerce purchases, it represents a credible and significantly less expensive alternative to credit cards. It seems likely that intermediaries and complementary services will develop around this payment method.
Back to basics, without giving up on innovation
During the InPublishing webinar, I emphasized the importance of payment personalization: being able to offer the payment method that best suits the user's profile. I also suggested not locking customers into a single choice. To establish credibility and maintain user-friendliness, it is important to offer other payment options throughout the purchase funnel. The most important thing is to "push" the most suitable method to the top of the list.
Beyond personalization, publishers must integrate other fundamental parameters. There are at least two others: transaction costs and churn. For example:, direct debit, long considered outdated, remains one of the most reliable methods due to low costs, low failure rates, and no problems related to card renewal. Certain electronic payment methods, such as Apple Pay, also have advantages, notably the ability for the user to update the underlying card when it expires. When using their phone to pay, users rarely forget to update their card, whereas a card directly linked to a subscription has a much higher attrition rate. In this context, Wero appears to be a promising alternative, combining instantaneity with low commission fees.
Large platforms such as Stripe will undoubtedly remain essential. However, it is vital for publishers not to rely on a single approach. It is highly recommended to offer modern solutions while retaining alternatives such as direct debit or automatic transfer.
How Advantage is adapting to these changes
Advantage has continually adapted to changes in payments by adding new integrations and payment methods and by constantly adjusting the underlying technical and functional architecture. Today, the application integrates with nearly 20 platforms (including Stripe) and 10 direct debit systems. These integrations are comprehensive, managing the dynamic interactions between subscriptions and associated automatic payments, with the former taking precedence over the latter. This approach is much more robust than what is offered by recurring billing solutions.
Our framework has also continued to evolve. We have moved from internal card processing to hosted capture pages and have recently merged the credit card and e-wallet management frameworks into one. The availability of solutions has also been extended in Cider Plus.
Finally, Advantage is adding partnerships to optimize the customer journey and its management. Our recent integration with Revaly, a recognized specialist in chargeback recovery, is one example of this.
As the payment landscape evolves, let's continue to explore the possibilities offered by AI, but never forget the fundamentals. What is the cost and what is the benefit?