Designing E-Commerce Products with Visa (week 1)

Introduction

Recently some of my peers and I were selected by Visa to work with them (thanks to our awesome professor Alexander Baumgardt) and come up with ideas and solutions to from re-imagining bank identity to empowering merchants to utilize digital payment platforms. We met up with them last week to officially begin the project by getting to know more about the company itself, their products, who we were going to be working with and initial brain storming.

This is definitely an amazing opportunity and I want to be able to share our process with you, from beginning to end, in order to have a better understanding of Visa, what they do and their goals for this project, as well as working on a team and understanding the problem we want to solve and how to go about it.

Understanding Visa and What they Do:

I wanted to be able to understand Visa from a broad perspective to what they do, their business model, their value proposition and how all of this leads to their success. Here is what I came up with:

Visa is a worldwide financial service that facilitates electronic fund transfers throughout the world. The most common of way of doing this is through Visa-branded debit and credit cards. Visa is purely a way to move money while they work with their network of partners aka financial institutions (Bank of America, Chase, etc.) to provide them with Visa branded products that they can distribute to their customers.

Visa’s network between the consumer and their partners is what is crucial to their success. Visa and its wide range of stakeholders create a network in which participates can interact and co-create value. This means building relationships, selling products or services, collaborating and more. By leveraging their network, Visa is able to continue spreading the usage of their products and facilitating payments all over the world.

Visa’s interconnected network results in customers being able to do things freely by bridging the gap between differences in perception and human behavior to managing finances.

Visa continues to a build a network that empowers payments for their users and stakeholders, resulting in a double sided market; Visa benefits from their users using their product, thus growing their network and Users benefit from a seamless payment process that is accessible in many different places.

How does Visa create value?

Visa controls the most essential part of any payment transaction; security. This means preventing fraud through authorization and using secure lines to transfer data. By using credit cards (data that isn’t purely digital but physical), users are able to have more control and ownership of their data and how they decide to use it. Visa provides value by managing a global and reliable processing infrastructure that guarantees secure, efficient, and safe transactions for account holders and merchants. By creating trust, security and feedback, values that are important to us when we associate them with payments, into their products that aims to strengthen their brand and ultimately change the way we use money.

Visa creates value for all of their stakeholders by bridging the relationship between the merchant, acquirer, issuer and consumer.

Merchants benefit from reducing fraud and cash management issues, as well transaction time to receive money. They are also allowed to create an online marketplace for their products that facilitates online shopping and provides more opportunity for account holders to spend more on products in cases such as making impulse purchases.

Account holders can always have a way to pay when cash isn’t available allowing for convenience. There is also security and rewards programs when they use the card and the services that come with it.

Banks (Issuer/acquirer) have additional revenue streams that come from interchange fees from merchants, late payment fees from account holders.

Visa themselves get money from credit card transactions and fees from merchants and banks.

Visa’s Goal

Visa’s goal is to make sure money gets sent and enable more places to get money. Visa just moves the money, while their partners, Bank of America, Chase and others collect/distribute money to users.

Visa simply electronifies and moves money to other places in order to provide their services to many locations as they can, utilizing indirect network effects, helping users solve their problems, thus earning revenue.

They are the network, they power payments. Of course, Visa doesn’t just leverage payments but other facets that are important to the business, such as hardware and other technology that connects to how payments are handled. Visa’s ultimate is goal is to create an inclusive and open that is the most secure system in comparison to their competitors. In order to do this, they need to continue momentum by facilitating open based business and turning apis (application program interfaces) into the products we use.

Visa’s Business model

Visas success lies in their 4 party model, which allows people to use debit/credit cards to pay in the first place. It is a relationship that enables participating consumers, retailers, issuers and acquirers to do business with each other. This relationship has opened with other entities, such as mobile network operators, device manufacturers or technology vendors joining in and establishing partnership by providing services to one or more partners in the model. Visa continues to use the 4 party model in order to expand e-comm payments to different regions.

Visa makes this all possible by making sure consumers, merchants and other partners will be able to benefit from convenient, secure cashless payments. By utilizing working model that is easily scalable, you can apply it to anywhere in the world as long it allows for open payments.

“4 party model is essential to innovation, as success is scalable and accessible”

Because Visa is primarily a service based business and network orchestrator (they are also asset builders and technology creators as well), flow = revenue. Examples of other service based businesses include Uber and Airbnb. They use existing resources to make money as they don’t actually own cars or houses. They simply create an experience by utilizing those resources to meet solve user problems and allow them to meet their goals. When a user uses their service, some of the money goes to the company through interest charges, which is why the more users that use their services, the more money they bring in which balances the cost users would continue to pay (keeping it affordable).

For service based businesses, they must facilitate growth and business in order to be successful. Amazon is a successful service because they facilitate growth and relationship between consumers and merchants by stocking up on inventory from merchants in which Amazon makes a cut from what the merchant receives based on what the consumer purchased from them. Amazon is a service that connects the merchant and consumer through their digital platform.

Visa’s Design Process

Visa told us about their design process and their primary focus is on discovering; engaging with users and prototyping and testing; understanding what parties want and positioning user and business needs to establish a balance.

I learned the importance of getting out into the market to gather insights from users and being able to share our ideas is crucial to learning and understanding the unseen problems. We need to be able to gather as much data as possible to assess our goals and how can we align them with our potential users in order to lead us in the right direction in creating a product that has meaning to them and to us.

The Project

Once my team and I had a better idea of Visa itself, the problem we were given made more in sense in how we could connect it to Visa’s primary goal which is to continue developing their network and create a seamless payment experience by leveraging their existing product line and brand name.

The brief

How might Visa help merchants accept online payments that are seamless and secure?

The current issue focuses on merchants who are reluctant to use an online payment system to transfer payments and are most likely using traditional means to transfer money to the bank.

In regards to this problem and the user, how can we create a product that introduces the concept of online payments and introduces the value of making it easier for local merchants to move payments around? Technology can be very intimidating and security is definitely an issue which is hard to solve if something were to happen.

We want to focus on these potential aspects that alleviate the current pain points merchants have:

• Creating a seamless and secure experience when something goes wrong. By being aware of how feedback happens between the product and user, it is a conversation that is crucial when dealing with important information.
• What discrete things are happening and when/where do they happen in regards to the product? (we want to be able to be transparent in showing merchants as much information that helps them understand this is a product they can trust with payments).
• How do actors play a role? Visa, merchants, consumers, other companies, etc. by creating a product service ecosystem to address the relationships and goals of each part of the network.

What We did

We looked at examples of successful e-commerce platforms in order to gather inspiration for creating our new e-commerce platform. Overall these platforms are successful because they address the major pain points of their experiences, create a friction-less experience by making it easy and simple for customers to use their services and all the payments are through phone, not using actual payments. They also offer three main qualities (embedded in their product/overall design) that are important to people in these situations; convenience, quality and efficiency.

Starbucks Order Ahead

What it is: A mobile ordering and payment on app that allows you to make/pay an order before you go to store and simply pick up your order upon arrival.

Why is it successful: It focused on a major pain point; lines. By ordering ahead of time, users who are busy or on the go, won’t have to wait in line for their order, can quickly get their drink and leave. Congestion is also an issue and the feature of text-message notifications is able to alert customers when a mobile order is ready and smooths out congestion in high volume locations. Frequent customers are able to benefit from this service utilizing Starbuck’s mobile wallet that makes it easier to pay and receive valuable benefits.

Trade offs: Because the concept itself is so successful, the demand for the service has been increasing rapidly, causing the problem for employees to keep up with the amount of mobile orders that come in. This results in bigger crowds and long waits for mobile orders, making the intended delivery of the service counter intuitive to its original goal which is to create convenience and save time by reducing congestion.

Amazon Go

What it is: A store to facilitate purchases. Essentially just take the items you need and leave, with all the payment handled!

Why is it successful: Recreating the digital world in physical store and taking out all the pain points such as waiting in line, payment troubles and grabbing only the things they need on the go.

Trade offs: By creating an grocery experience that gets rid of cashiers and people, it brings question to how technology is changing the way we shop that is leading us to re-create the grocery experience which can take time to develop. It can also cut back on cashier jobs which can affect the livelihood of people. There are also technical problems of the technology when too many people shop in the store.

Once we looked at current products in the market that are utilizing online payments, we did a walk a mile immersion exercise where we put our shoes into the mind of a merchant and consumer and brainstormed ideas to what a successful payments product looked like.

The key takeaway I gathered was that we need to align the experience with the merchant instead of the payment system, We need to focus on onboarding merchants to accept the payments system that reduces their anxiety as well as simplifies and streamlines their experience.

The hardest part of design is user acquisition aka getting users to use your product.

If the onboarding process and first time experience is successful (aka our design), the cost per customer acquisition leads to an ongoing relationship with Visa, which leads to revenue and access to the customer’s social connections.

Our Goals

Ultimately we would want to connect our product to the Visa brand which results in making people feel good about the brand/products centered around it.

In regards to the specific design, we need to thoughtfully come up with constraints to hone in the problem that will lead us to think about the right path to take and the right problem to solve. We also want to come up more with use cases, ways to use the product we come up with and follow stringent guidelines from design and branding to connect it to the brand.

We need to be creative around problems that already exist, such as instead of using terminals which are costly, why not use a qr code which is cheap, and align price to what users want. By doing this, users will be more inclined to use our product in comparison to its competitors because it is easy to use, accessible and affordable.

We need to think about transformation of things.

By facilitating flow with actors (stakeholders), different parties, and different contexts, multiple events align with sweet spots that move with time and context which in turn, lead to better experiences. This means we have to move more faster, better engage with people and strengthen relationships.

Questions we want to tackle

• By looking at demographics and generation related data, is there an opportunity for gamification and making the task of payments “fun” and even more safe (i.e tokenization)?
• We need to about people’s values, needs and problems, but how do we acquire/approach (new) customers?

Next Steps

We plan on looking at e-comm experiences, and doing a competitive analysis, specifically looking at customer identity, support and logistics (i.e. how do they get an item to me). We would also want to search up companies and their value to enterprise + e- commerce. Based on our research, we would then want to understand the behavior of how payments are done from merchant end and customer end where we to pinpoint opportunities that simplify (repetitive) tasks, requires less steps, and is friendly and straightforward. Our first step of this would be to to think about experiences that come to us, rather than going to them as we are customers and/or merchants in our daily life.

After our initial research, we would to explore the concept of openness and how to create solutions that support Visa’s open model. We need to be able to position our product by connecting it to the 4 party model and connecting to it to how does visa plays a role as well as the roles of the merchant, issuer, etc. In other words, we need to make sure we are paying attention to each part of the model and how our product will play a part in Visa’s current eco-system of products. The issue of brand also comes to mind in e-comm transactions and how to design the solution using existing api as a constraint to be creative.

Digital over conventional solutions

Visa has been exploring new platforms to enable payments such as bio metrics, facial recognition and getting rid of passwords. If we have time, it would be cool to experiment and speculate emerging technologies and incorporate them into our solution if called for.

Learnings

Brand promise

If promise is there, usually within the brand or through use of product, the experience is usually based on that initial reaction.

Be subtle

Subtly matters to users. By getting very personal with what makes users tick or feel pleasure, a product that tackles edge cases and nuances (i.e. protection and overcharging) of how they interact with a product will speak volumes and make interacting with the product much more meaningful because it excepts us to do the unexpected creating a friction-less experience.

The product journey continues

Something that is usually forget when I design for people is that their journey continues even after the initial experience is over. With payments, the experience of buying something, such as receiving your receipt, the user can continue with their journey by either using their receipt to return something, keep it for taxes, etc.

Overarching experiences

Experiences overlap. By creating a product that allows for different experiences, users can use your product in a variety of situations that allows them to integrate your product into their life thus creating more value and continued use which leads to more opportunities to continue creating and producing solutions for your users.

Know your customers

This is the most important point that is often overlooked when we begin designing. In order to create solutions that are meaningful for people, we need to understand who we are designing for and why our solution will help them achieve their goals. For us, we want to design an e-commerce platform that offers a seamless and trustworthy experience for merchants that introduces them to accept digital payments.

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