Digital Transformation and the Role of Payments

ATPS Worldwide, Berlin, 3-5th May 2017

Tim van Diest SVP Global Accounts

Brian Gross Head of Digital Innovation

Some facts about Adyen

• Tech company founded in 2006

• One platform, one integration

• $90 Billion processed volume in 2016

• 7 own + 90 external acquiring connections + LPM’s

• 13 offices in 5 continents

• 560 employees globally

Adyen & Travel

• 30% of total Adyen volume

• Active in all regions

• Integrated with Amadeus, Sabre and Navitaire

• Multi acquiring routing tool

• 39 Airlines live on the platform

wherever people pay

Digital transformation with an unexpected discovery

Heritage

Aeromexico today

Digital transformation • Insourced, staff 5 > 80

• New website

• API

• New check-in kiosks

• Chatbot, AI

• Doubled Web as % of sales

Our e-commerce goals

Best Latin American airline in e-commerce Global top 10 airline in digital innovation

Customer Experience BrandProfit

So we must provide an Omnichannel Experience

Omnichannel experience

The biggest surprise of all…

Our payments transformation • Architecture

• Local acquiring

• Monitoring

• 3DSecure & Risk

• Results

• Future

Aeromexico’s architecture before

Aeromexico.com Front end Aeromexico API SABRE back end

1 acquirer – MX 1 acquirer - US Issuing banks

Cybersource

Other Connections(Mexico cash)

3DS

Aeromexico’s architecture: Connections to our back end are expensive

Aeromexico.com Front end Aeromexico API SABRE back end

Issuing banks

Cybersource

Other Connections(e.g. Mexico cash, Central America, Colombia, Argentina)

3DS

2 acquirer – MX 1 acquirer - US 1 acquirer - BR

1 acquirer - EU 1 acquirer - UK 1 acquirer - CA

Adyen enables local acquiring in new markets Benefits of local acquiring

• Cost savings channel shift

• In-country transaction

• Higher acceptance rates

• Local currency

• No foreign exchange or surcharging

• Local instruments

• Parcelas in Brazil - 50% of sales

• Installments in other Latin countries - 30-80% of sales

Monthly transactions for AM.com (2015-2017)

0

300

600

900

1200

Jan 15 Mar May Jul Sept Nov Jan 16 Mar May Jul Sept Nov Jan 17 Mar

United KingdomFranceSpainNetherlandsRest of Europe

Europe Growth vs previous year (MoM, %)

Launch of EUR and GBP in Feb. 16

Local acquiring boosts sales

-3%

34%

164%

120%

263%

219%

239%

203%

431%

286%

234%

253%

352%

112% 55

%

Tips and Tricks Check message configurations • Acquirers have special configurations for certain

cards, countries or Forms of Payment (e.g. installments).

• Check the set-up with them to find gaps or underperforming categories

Retry transactions with other acquirers • Around 10% of Rejections from Acquirer A,

might be authorized by Acquirer B Validate end-to-end flow • Auth, Capture, Settlement, Refunds, etc. Every

new PoS might need specific adjustments Solve frequent unclear error types • Focus on the most common ones that are

unclear or vague. Acquirers might have unpleasant surprises.

Monitor daily performance

Adyen Dashboard • Monitor daily performance • Solve concerns, deep analysis • Performance by acquirer by BIN • Identify misconfigurations for

installments, cards by country, etc. • Change % traffic to different acquirers • Generate manual procedures for

refunds, captures or cancellations

We removed 3D Secure • No significant Fraud increase in Mexico • Fraud increased beyond tolerable

levels in US, so we put 3DS back on, but…

• New acquirer in US – Elavon – fraud remained under threshold

• Cybersource = effective! • Implementing Dynamic 3DS with

Adyen

Overall results: high acceptance rate, increased customer satisfactionSuccess rate Visa/MC payments Web Mexico in 2016

70%

90%

Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sept-20 Oct-20 Nov-20 Dec-20

77% 78%76%

74%

79%80% 80% 82%

86% 86% 84% 84%Launch of A

dyen

as Gate

way M

SI Q6 code,

Accep. from

57% to 75%

Santander a

s

2nd Acquire

r

Retries on

Acquirer B 9% recovery rate,

5M USD per year

The future • Central and South America:

• Local card acquiring

• Cash

• Installments (30-80% of market)

• Adyen + Asia, AFP Europe, etc.

• 3rd acquirer Mexico

• 2nd acquirer USA

• Chatbot

• Payment inside of Messenger

Aeromexico…the world’s most advanced airline chatbot! m.me/AeromexicoMX

Coming soon…Payment inside of Messenger • With Visa assets e.g.

• Cybersource Decision Manager • Tokenization • Visa Checkout

• Secure, PCI • High approval rate • Reconciliation

• Automatically issue ticket • Confirmation page and email

Q and A

ATPS Worldwide, Berlin, 3-5th May 2017