Executive Interview - Jeff Clementz: Managing Director, PayPal Australia and New Zealand
> Understanding Australian consumers and merchants top priority
> A clear focus on helping offline merchants become mobile
> Alleviating security concerns for merchants
What do you think is the biggest challenge facing the Australian payments system?
The greatest challenge is to actually move beyond payments and to focus on helping the retailers in Australia face what is a challenging market. Online retailers are challenging the pure offline retailers, and the reality of today’s marketplace is that consumers are shopping across all of those channels. As a payments provider we are looking to help Australian retailers manage that change and help them, especially those that are offline, embrace this new retail environment where consumers are demanding that the inventory be where they are; which is on their Mobile Phone, Lap-Top, iPad or it’s in the store, and consumers want a seamless experience across all of that.
Where do you think the major opportunities lie for the Australian Payments industry?
Convergence of data, moving data and moving money, and the opportunity there is to really help provide a more engaging experience for consumers in their shopping experience. The payment system and your payments wallet can sit in the Cloud, and if you provide certain information to that wallet such as your shopping list or some information or attributes about what you are looking to buy, we can actually help connect you up with that inventory and with relevant offers. This is only one example of how your digital wallet can help you opposed to your traditional wallet. It this intersection of the information consumers provide and the ability to move money, and then connecting that up with relevant merchants and relevant offers that will really help provide a great shopping experience for consumers.
You had an illustrious career in the US before taking on this new role with PayPal. How do you think your previous role as leader of PayPal’s Global Operational Excellence Team will influence your role as Managing Director in further building out PayPal’s business in Australia and NZ?
The number one thing I learned in customer service and operations is that you need to listen to your customers and I was able to create the "Voice of the Customer Program" at PayPal, and so as I enter Australia the number one thing I will be doing is connecting with our consumers, both the people that are shopping, as well as merchants, to understand what their needs are and ensure that we develop and deliver solutions that help those retailers and merchants grow and help consumers stay engaged.
Anecdotally we get a lot of feedback through the course of our research showing that SMEs relate to the notion of working with a "challenger brand" over traditional banks. Is this something you think PayPal can leverage?
We work with 15,000 Banks and nearly 50 Card Schemes and we provide a way for those payment mechanisms, which were traditionally made for an offline world, to work in a digital world seamlessly. Our goal is to bring customer experience and design, risk management, trust and safety, all of these elements, together so that you can use those traditional payment mechanisms the way that consumers are shopping today.
What has the response been like in Australia to PayPal’s "PayPal Here" mobile payments system from consumers and importantly, from merchants?
It has been overwhelming. We have a waitlist of nearly 15,000 merchants and PayPal has just started shipping devices this week. It is too early to say what the consumer demand will be, but we think it closes a gap and will help those smaller merchants, especially tradesmen, personal trainers, or merchants who sell their goods at farmers markets, basically any merchants that are on the go and where they might have had to deny a transaction because it would have been in cash. PayPal Here now enables this group of merchants to accept an electronic payment that will hopefully help them grow and expand their business.
PayPal has said that "PayPal Here" is backed by PayPal’s world class risk management capabilities, despite this do you think that consumers interacting with the technology will be sceptical of this as a payment method and what would you say to reassure them?
It has long been known that consumers in Australia adopt technology faster than anywhere in the world and this has been especially evident with the rate of adoption of the smartphone, where Australia’s penetration today is top two or three in the entire world. I believe that Australian consumers will find it convenient and interesting and they will adopt the technology quickly. I don’t think there will be a lot of barriers and PayPal has brought its philosophies of protecting consumer information to the forefront when building the PayPal Here Dongle, which actually has encryption built in so that consumers’ credit card information is not transferable and cannot be stolen.
On the merchant side of things, a further 20 percent of merchants are planning to adopt online payment acceptance, effectively doubling the number of merchants using this platform from 19.2 percent. The single biggest barrier to adoption according to our research remains perceptions around transaction security. What do you think is the biggest obstacle PayPal faces in the repositioning of businesses mind sets?
Merchants that don’t accept PayPal have to worry about PCI Compliance which is a critical step that Card Schemes have put in place to help ensure that consumer data is protected. If they adopt PayPal we take care of all the PCI Compliance because we don’t transmit credit card data or bank information data to the merchant. PayPal only passes along the payment value as well as the relevant shipping information that a merchant would need, so by adopting PayPal it actually alleviates huge amount of security and privacy concerns that merchants have.
East & Partners’ research shows that over 90 percent of Australia’s Top 500 businesses would consider a change in Merchant Service provider in Isolation from their Transaction Banking Service Provider, where the relationship traditionally lies, does PayPal have any plans for this audience, which is a segment not traditionally associated with PayPal’s world?
Our core focus is around providing and building out our digital wallet which sits in the cloud so that it is easily accessible by consumers everywhere and avoids the need to type in your credit card number and all of that extra information. There’s convenience and security, as well as incremental value that we can provide to consumers by providing them with a wallet, so that will be our main focus.
> A clear focus on helping offline merchants become mobile
> Alleviating security concerns for merchants
What do you think is the biggest challenge facing the Australian payments system?
The greatest challenge is to actually move beyond payments and to focus on helping the retailers in Australia face what is a challenging market. Online retailers are challenging the pure offline retailers, and the reality of today’s marketplace is that consumers are shopping across all of those channels. As a payments provider we are looking to help Australian retailers manage that change and help them, especially those that are offline, embrace this new retail environment where consumers are demanding that the inventory be where they are; which is on their Mobile Phone, Lap-Top, iPad or it’s in the store, and consumers want a seamless experience across all of that.
Where do you think the major opportunities lie for the Australian Payments industry?
Convergence of data, moving data and moving money, and the opportunity there is to really help provide a more engaging experience for consumers in their shopping experience. The payment system and your payments wallet can sit in the Cloud, and if you provide certain information to that wallet such as your shopping list or some information or attributes about what you are looking to buy, we can actually help connect you up with that inventory and with relevant offers. This is only one example of how your digital wallet can help you opposed to your traditional wallet. It this intersection of the information consumers provide and the ability to move money, and then connecting that up with relevant merchants and relevant offers that will really help provide a great shopping experience for consumers.
You had an illustrious career in the US before taking on this new role with PayPal. How do you think your previous role as leader of PayPal’s Global Operational Excellence Team will influence your role as Managing Director in further building out PayPal’s business in Australia and NZ?
The number one thing I learned in customer service and operations is that you need to listen to your customers and I was able to create the "Voice of the Customer Program" at PayPal, and so as I enter Australia the number one thing I will be doing is connecting with our consumers, both the people that are shopping, as well as merchants, to understand what their needs are and ensure that we develop and deliver solutions that help those retailers and merchants grow and help consumers stay engaged.
Anecdotally we get a lot of feedback through the course of our research showing that SMEs relate to the notion of working with a "challenger brand" over traditional banks. Is this something you think PayPal can leverage?
We work with 15,000 Banks and nearly 50 Card Schemes and we provide a way for those payment mechanisms, which were traditionally made for an offline world, to work in a digital world seamlessly. Our goal is to bring customer experience and design, risk management, trust and safety, all of these elements, together so that you can use those traditional payment mechanisms the way that consumers are shopping today.
What has the response been like in Australia to PayPal’s "PayPal Here" mobile payments system from consumers and importantly, from merchants?
It has been overwhelming. We have a waitlist of nearly 15,000 merchants and PayPal has just started shipping devices this week. It is too early to say what the consumer demand will be, but we think it closes a gap and will help those smaller merchants, especially tradesmen, personal trainers, or merchants who sell their goods at farmers markets, basically any merchants that are on the go and where they might have had to deny a transaction because it would have been in cash. PayPal Here now enables this group of merchants to accept an electronic payment that will hopefully help them grow and expand their business.
PayPal has said that "PayPal Here" is backed by PayPal’s world class risk management capabilities, despite this do you think that consumers interacting with the technology will be sceptical of this as a payment method and what would you say to reassure them?
It has long been known that consumers in Australia adopt technology faster than anywhere in the world and this has been especially evident with the rate of adoption of the smartphone, where Australia’s penetration today is top two or three in the entire world. I believe that Australian consumers will find it convenient and interesting and they will adopt the technology quickly. I don’t think there will be a lot of barriers and PayPal has brought its philosophies of protecting consumer information to the forefront when building the PayPal Here Dongle, which actually has encryption built in so that consumers’ credit card information is not transferable and cannot be stolen.
On the merchant side of things, a further 20 percent of merchants are planning to adopt online payment acceptance, effectively doubling the number of merchants using this platform from 19.2 percent. The single biggest barrier to adoption according to our research remains perceptions around transaction security. What do you think is the biggest obstacle PayPal faces in the repositioning of businesses mind sets?
Merchants that don’t accept PayPal have to worry about PCI Compliance which is a critical step that Card Schemes have put in place to help ensure that consumer data is protected. If they adopt PayPal we take care of all the PCI Compliance because we don’t transmit credit card data or bank information data to the merchant. PayPal only passes along the payment value as well as the relevant shipping information that a merchant would need, so by adopting PayPal it actually alleviates huge amount of security and privacy concerns that merchants have.
East & Partners’ research shows that over 90 percent of Australia’s Top 500 businesses would consider a change in Merchant Service provider in Isolation from their Transaction Banking Service Provider, where the relationship traditionally lies, does PayPal have any plans for this audience, which is a segment not traditionally associated with PayPal’s world?
Our core focus is around providing and building out our digital wallet which sits in the cloud so that it is easily accessible by consumers everywhere and avoids the need to type in your credit card number and all of that extra information. There’s convenience and security, as well as incremental value that we can provide to consumers by providing them with a wallet, so that will be our main focus.
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