This document discusses the evolving e-commerce landscape in Italy, with three main points: 1) It outlines the growth of e-commerce in Italy pre- and post-COVID-19, noting significant increases in online purchases during the pandemic across several categories. 2) It covers new payment regulations like PSD2 and the importance of strong authentication for online transactions. 3) It provides an overview of the role payment service providers (PSPs) can play in merchants' e-commerce strategies, including optimizing checkout, expanding payment options, and leveraging payments data to improve sales.

1. RINASCITA DIGITALE
15 Aprile 2020
Pagamenti digitali: l'importanza del Payment Provider
nell’evoluzione del mercato digitale

2. 3. The role of PSP in the company e-commerce strategy -
General Overview of Hipay
AGENDA 1. Italian e-commerce scenario - pre and post COVID-19
2. Payment Regulation

3. Italian e-commerce
scenario
-
pre and post COVID-19
1.

4. Growth of e-commerce last 5 years
Value
e-commerce B2C in Italy : constant growth
Source: Osservatori.net
44% of italians purchase online
43% of them purchase crossborder
10% of Italian companies are active online
+10% of Italian companies are active online vs 2018
2018 2019201720162015

5. E-commerce growth by category 2019
Fashion
& Beauty
Electronic &
Physical Media
Food &
Beverage
Furniture &
Appliances
Pharma
+16% +19% +42% +30%
Source: Osservatori.net, Consorzio Netcomm
+60%
Travel (including
accomodation)
Other (only
product)
+9% +21%

6. 3 examples:
+100% - Pet (Food & Accessories)
-18% - Jewelry
-28% - Cosmetics
How COVID-19 is affecting online purchase in Italy
Fashion
& Beauty
Electronic &
Physical Media
Food &
Beverage
Furniture &
Appliances
Pharma
+76%
-2.8% -6.1% +121.9%
Source: SimilarWeb, Nielsen, Qaplà
Note: data have been gathered till the first week of March
Travel (including
accomodation)
-75%
Other (only
product)
+18%
N/A

7. How COVID-19 is affecting online purchase in the World
Number of transaction
Source: SimilarWeb, ContentSquare, Statista
Note: data have been gathered till the first week of March

8. Financial Inclusion Factors
% of population aged 15+ that reports owning or using each financial product or service
Has an account with a
financial institution
Has a credit
card
Makes online
purchases
% of women with a
credit card
% of men with a
credit card
% of women making
online transaction
% of men making
online transaction
94% 42% 44%
34% 52% 61% 70%
Source: World Bank Global Financial Inclusion Data (lates data available Jan 2020)
Note: % are of adults aged 15 and above, not of total population
Pays bills
online
65%

9. E-commerce activities
% of Internet users aged 16 to 64 who report performing each activity in the past month
Searched online for a
product or service to
buy (any device)
Visited an online retail
store on the Web (any
device)
Purchased a product
online (any device)
Made an online
purchase via laptop or
desktop computer
Made on online
purchase via a
mobile device
87% 93% 77% 50% 40%
Source: GlobalWebIndex (Q3 2019). Figures represent the findings of a borad survey of internet users aged 16 to 64. globalwebindex.com

10. E-commerce Purchases by Payment Method
% of e-commerce transaction completed using each payment method
Credit Card Cash Bank Transfer E-Wallet Other
41% 8.0% 10% 29% 12%
Source: PPRO, Payments and e-commerce reports (2019 & 2020 editions)

11. Payment Regulation
2.

12. A new way to authenticate end users for online transactions
14/09/2019
The issuer decides whether or not to
apply strong authentication to confirm end
user identity
PSD2 coming to effect
Systematic end user
authentication process
Strong Authentication Factors
Something known
Something owned
Something inherent
3-D Secure 2.0
+

13. 3-DSecure
identification ?
Autorisation CaptureTransaction
creation
Fraud control Collect
SETTLEMENT
ON Merchant
ACCOUNT
The transaction is created with your
Order ID and custom data
1st
server notification
The transaction is authorized (116) or
refused (113)
2nd
server notification :
After a capture request, the transaction is captured and the payment is
completed (118).
You also receive an additionnal notification for the capture request (117) :
you can generate the shipment on early basis.
Settlement notification :
You are notified when a settlement is generated for all
collected transactions.
You can use the Settlement API to retreive the detailed
informations, download the export from the backoffice or
by FTP.
Transaction Status

14. Risk-Based Analysis
End user
shipping address
End user
invoicing address
End user
email address
End user IP address
End user
workphone number
Payment form
language
Device fingerprint Browser agent
New type of data must be sent to issuers

15. Use exemptions at its best
Out of scope Exempted
PSD2 allows merchants to apply authentication exemptions, and ease end-user purchasing experience
Merchant Initiated Transactions
MOTO transactions
Recurring transactions
Beneficiary white-listing
One leg-out
Transaction Risk Analysis
< 30€
< 100 € 0,13 %
100 – 250 € 0,06 %
250 – 500 € 0,01 %
One-click payment (card-on-file) is not
exempted from authentication

16. The role of a PSP in the company
e-commerce strategy
-
General Overview of
3.

17. 59% of consumers have already abandoned their
purchase because of the payment step
47% of consumers state to not buy online if the
confirmation process is too long
92% of consumers are in favour of buying products
that are from other european sites, if it provides the
preferred payment method
How italian consumers behave
when purchasing online ?

18. Understand and optimize your visitor flows
To improve your sales performance

19. Use payment to leverage actions
To improve your net conversion rate

20. A new generation of omnichannel platform
Modern and adaptative
Fight against
the fraud
Business
Intelligence
HiPay
collecting
Financial
reconciliation
Payment
methods
Merchant
bank
SINGLE CONTRACT
MERCHANT

21. Fraud prevention
End-to-end and innovative fraud solution, fully integrated within the HiPay platform
Sentinel state-of-the-art technologies let you detect in real-time fraud attempts, without
damaging your conversion rate
A unique solution to combat fraud
Customize Sentinel with your business specificities, and incorporate your
own custom-data for a better risk analysis

22. Score your transactions in real-time
All your transactions are real-time assessed. Depending on the anti-fraud criterions analysis, a score
will be given to the transaction, triggering a specific action for each identified risk level
Highest is the transaction score analysis, highest will the risk level be

23. Widen your customer target
By proposing the most relevant payment methods
Cross-border payments
Propose the most relevant local payment
methods, widen your international footprint
and raise your conversion rate
Unified & centralized reconciliation
Multiply payment methods and currencies
available for your customers, and reconciliate
your payment operations within a single and
unique file

24. Real-time management interface
Monitor your KPIs, manage your daily operations, and optimize your
conversion rate. In real-time. On a single platform.
A powerful centralized management platform
A back-office
designed for your
business needs
Consolidated financial management
Our back-office has been specifically designed for your finance and
accountant departments : it allows you to manage your consolidated
treasury vision, payouts, banking reconciliation, and multi-currencies
operations
Exports & Integration
Export automatically or manually your operations files within your
accountancy ERPs

25. Reconciliate your whole financial flows
Delete 80% of your team’s manual work
Transaction number
Order number
Transfer reference
Basket amount incl. & excl.
taxes
Authorization date
Find all your
transactions details
Operation and
settlement currency
HiPay fees
Chargebacks
Refunds

26. THANKS
FOR YOUR ATTENTION