1.
Bagel &
Payments
Meetup #1: Fundamentals of Payments
Zooz-Guest
TLV_2019!

2.
The Concept
Bagel & Payments
Customers
The series of meetups we offer aim to demystify various aspects
of the payments world and are therefore suitable for individuals,
companies, and start-ups, who wish to learn more, consult with
experts and take key ideas and action items to implement into
their own payments stack or business

3.
Agenda
Fundamentals of Payments
1. It’s all about Conversion
(and User experience)
2. Intro to Payments
3. Main players
4. Transaction flow
5. Evolving Ecosystem
6. Israel’s Ecosystem
7. APMs
8. Questions

4.
It’s all about Conversion
01

5.
It’s all about
Conversion
Customers
1,000 Users enter a website.
How many will finish the session as customers?

6.
It’s all about
Conversion
Homepage
Category Listing
Search, Layered Navigation
Product Page
Shopping Cart
100% (1,000 users)
90% (900 users)
80% (800 users)
60% (600 users)
30% (300 users)
Homepage
Category Listing
Search, Layered Navigation
Product Page
Shopping Cart

7.
It’s all about
Conversion
Homepage
Category Listing
Search, Layered Navigation
Product Page
Shopping Cart
Checkout
100% (1,000 users)
90% (900 users)
80% (800 users)
60% (600 users)
30% (300 users)
10% (100 users)

8.
It’s all about
Conversion
Homepage
Category Listing
Search, Layered Navigation
Product Page
Shopping Cart
Checkout
Customers
100% (1,000 users)
90% (900 users)
80% (800 users)
60% (600 users)
30% (300 users)
10% (100 users)
2% (2 users)

9.
1. Click on “Buy now”
2. Enter Payment page
3. Fill-in the details
4. Click “Pay”
5. Transaction Approved/Pending/Declined
6. If Failed, try a different APM?
From Checkout to Customer

10.
So, how can we increase conversions?

11.
Intro to Payments
02

12.
Payment Methods
Around The World

13.
The History of
Payments
Cryptocurrencies
2018
Bankers
15th
century
Charge Cards
40’s
Credit Cards
60’s
Mobile &
M-payments
Late 90’s
First Coins
700-500 BC
Cheques
800
Barter

14.
Cards Schemes ecosystem
Who are the main players?03

15.
Credit Cards
Key Players
Merchants
Issuer Acquirer
Payments Networks
Card Holders

16.
Transaction Flow
04

17.
Merchants
Issuer Acquirer
Payments Networks
Card Holders
Merchant submits $100 authorization
1
$100

18.
Merchants
Issuer Acquirer
Payments Networks
Card Holders
Acquirer submits $100 authorization to Visa
2
$100

19.
Merchants
Issuer Acquirer
Payments Networks
Card Holders
Visa submits $100 authorization to issuer
3
$100

20.
Merchants
Issuer Acquirer
Payments Networks
Card Holders
Issuer checks buyer’s ability to pay $100
4
$100

21.
Merchants
Issuer Acquirer
Payments Networks
Card Holders
Issuer returns a response for $100 authorization to Visa
5
$100

22.
Merchants
Issuer Acquirer
Payments Networks
Card Holders
Visa sends the response of the $100 authorization to the acquirer
6
$100

23.
Merchants
Issuer Acquirer
Payments Networks
Card Holders
Acquirer sends the response of the $100 authorization to the merchant
7
$100

24.
Merchants
Issuer Acquirer
Payments Networks
Card Holders
Merchant submits $100 transaction
8
$100

25.
Merchants
Issuer Acquirer
Payments Networks
Card Holders
Acquirer submits $100 transaction to Visa
9
$100

26.
Merchants
Issuer Acquirer
Payments Networks
Card Holders
Visa submits $100 transaction to issuer10
$100

27.
Merchants
Issuer Acquirer
Payments Networks
Card Holders
Issuer bills buyer $10011
$100

28.
Merchants
Issuer Acquirer
Payments Networks
Card Holders
Buyer pays issuer $100 (in his billing cycle)12
$100

29.
Merchants
Issuer Acquirer
Payments Networks
Card Holders
$98.35
Issuer pays Visa $98.35 (Interchange fee $1.65)13
$1.65

30.
$1.65
Merchants
Issuer Acquirer
Payments Networks
Card Holders
Visa credits the acquirer $98.22 (Visa processing fee $0.13)14
$98.22
$0.13

31.
$0.13
Merchants
Issuer Acquirer
Payments Networks
Card Holders
Acquirer pays merchant $96.5 (Merchant discount fee - $1.8) in the billing
cycle.15
$96.42
$1.65 $1.8

32.
Evolving Ecosystem
05

33.
Evolving eCommerce
Ecosystem
Card Holders Merchants
Issuer Acquirer
Payments Networks

34.
Merchants
Acquirer
Payment Gateway
Payment Facilitator / iPSP
Fraud DetectionEvolving eCommerce
Ecosystem

35.
Payments Networks
Alternative Payment Methods
Evolving eCommerce
Ecosystem

36.
Merchant Payment
Processing Journey
Bank Approval Agreement Integration First Live
Transaction
MAF KYCF2F Meeting
Merchant Underwriting

37.
Top Payments Challenges
“Payment-Related Challenges Ranked” MRC and CyberSource’s Payment Management
Strategies of Forward-Thinking Global Merchants 2018 Global Payments Survey
Biggest Payments Challenges Facing Enterprises in 2018 from “The Public Cloud Payments
Imperative” by Jordan McKee,

38.
Israel’s Ecosystem
06

39.
Israel’s
Ecosystem
Card Holders Merchants
Issuer Acquirer
Payments Networks

40.
Credit Card Networks
Israel Acquirers Market Share
TheMarker, 2018
116
Isracard
68.7
Cal
61.4
MAX (LeumiCard)
Billions of NIS
January to September 2018, not including Intl and eCommerce

41.
Israel ecosystem

42.
Credit Card Networks
Israel Payment Methods

43.
Credit Card Networks
Global Market Share
Visa
56%MasterCard
26%
American Express
3%
UnionPay
13%
JCB
1%
Diners / Discover
1%

44.
APMs
07

45.
APMs World Wide
United
Kingdom
Belgium
The
Netherlands Spain
Italy Germany France Poland
Debit card or credit card Invoice Direct payment through the bank Paypal or similar
Cash on delivery Payment by installments Don’t know

46.
EWallets & Alternative Payments Methods
APM
● Alternative Payments Methods: A non‐traditional payment method (i.e. not
credit card or cash) such as eWallets, PayPal, phone and mobile payments
or bank transfers
● ZOOZ supports multiple eWallets and APMs, and their payment flows often
includes a redirect to their proprietary payment page

47.
EWallets
● Main Players –
● Digital Wallet: (also eWallet or Mobile Wallet) The software that provides the
equivalent of a wallet for electronic commerce, storage several payment
methods
● Popular all around the world

48.
Invoice Payments
● Main Players –
● Main principle – the invoice provider pays the merchant first and takes on all
the risk of fraud and payment defaults; ”Buy now, pay later”. Customers
usually pay two weeks later
● Means of detecting fraud and predicting who's going to pay their bills
● Invoice payments are very popular in Europe, especially in:
Germany, Scandinavia, Austria, Switzerland and Netherlands

49.
Bank Transfer
● Main Players –
● Method of electronic funds transfer from one person or entity to another. A wire
transfer can be made from one bank account to another bank account or
through a transfer of cash at a cash office
● Bank transfer are popular all around the world especially in:
North Europe and USA

50.
Questions?

51.
Thank You!

52.
Key Terms
#1
● Interchange Fees: Fees paid by the acquirer to the issuer to compensate for
transaction‐related costs.
● Micropayment: A payment of under $20. These payments are particularly popular for
the sale of information and content online.
● Point of Sale (POS): The terminal where the payment takes place (credit card swiping
infrastructure). An mPOS is a mobile point of sale, referring to infrastructure that
attaches to a mobile device to accept credit card payments.
● Settlement: The process of transferring funds for sales and credits between acquirer
and issuers, including the final debiting of a cardholder’s account and the crediting of
a merchant’s account.

53.
Key Terms
#2
● Chargeback: A procedure whereby a cardholder or the cardholder’s bank disputes
transactions to payment cards. A disputed payment card transaction is returned to
the acquirer/ISO/MSP for reimbursement to the cardholder’s account.
● Card Not Present (CNP): is a payment card transaction made where the cardholder
does not or cannot physically present the card for a merchant's visual examination at
the time that an order is given and payment effected, such as for mail-order
transactions by mail or fax, or over the telephone or Internet.
● Cross-Border Payments: Payments made between accounts in different countries,
from the payment system of the country of origin through a gateway operator to the
payment system of the country of receipt.

54.
Key Terms
#3
● Recurring Billing: A transaction for which a cardholder provides permission, in either
written or electronic format, to a merchant to charge his/her account number
periodically for recurring goods or services.
● Shopping Cart Abandonment: when shoppers put items in their online shopping carts,
but then leave before completing the purchase.