Jakub Wagner (Skip Pay): The Biggest Stumbling Block for E-commerce Sites is the User Experience. Even as an IT Professional, I Sometimes don’t Know What to Click on

May 12, 2023

“Buy now, pay later” is the principle behind the fintech startup Skip Pay, which falls under the ČSOB umbrella and specializes in deferred payments. “Globally, we commonly see a significant percentage of customers utilizing deferred payments during online shopping. Locally, we still have untapped potential. However, if there’s an area within e-commerce where we can make a significant impact, it’s in improving user experience and optimizing for mobile shopping,” says Skip Pay CTO Jakub Wagner.

• Why are Czechs more skeptical about deferred payments compared to other countries?
• What insights can be gleaned from data on deferred payments regarding customer behavior and needs?
• How do deferred payments affect the return rates in e-commerce?
• Why should mobile shopping be simplified as much as possible?

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Read the podcast as an interview 

Ivana Karhanová: Buy now, pay later. In the Czech Republic, this service faces challenges due to the prevalence of cash on delivery. How is Skip Pay, under ČSOB, distinguishing itself from the competition? What can be learned from customer behavior and needs data? Today, we’ll discuss these with Jakub Wagner, CTO of Skip Pay. Hello.

Jakub Wagner: Hello.

Ivana Karhanová: What’s the current situation in the Czech market for deferred payments?

Jakub Wagner: Well, compared to the rest of the Western world, we’re a bit behind, especially in market penetration.

Ivana Karhanová: Meaning fewer people use this service generally?

Jakub Wagner: Exactly. Fewer people use it here. Look at Sweden, where the number is unbelievably high – a significant percentage of people shop online using deferred payments. In our country, it’s just a few percent.

Ivana Karhanová: Klarna, from there, recently entered our market.

Jakub Wagner: Yes, exactly.

Ivana Karhanová: They must have liked those small numbers here.

Jakub Wagner: Right. Klarna is incredible, a global player. There aren’t many of those. By the way, Klarna entered our Czech market in the autumn of 2022. So far, nothing much has happened. They have some interesting partners. Then there’s Twisto, here since 2013, the first in our market with deferred payments.

Skip Pay has only been known for a few months, historically called Mall Pay, before being rebranded. Our history is quite long, entering the Czech market in 2014, initially in collaboration with Home Credit under the Kup Najisto brand. But the system we’re building on dates back to that time.

Ivana Karhanová: Why is there less use of this service in the Czech Republic compared to the West? Is it due to cash on delivery or a different mindset of Czech people?

Jakub Wagner: I think it’s partly due to Czechs being conservative and distrustful. Deferred payments should ideally suit them, but as you mentioned cash on delivery, it’s a significant competitor. Ironically, people still use cash on delivery extensively. With Skip Pay, we sometimes call deferred payments “cash on delivery 2.0” or “cash on delivery on steroids” because it allows customers to pay only after 14 days of receiving the goods, after trying them at home.

Ivana Karhanová: But technically, it’s a loan.

Jakub Wagner: Yes, it’s a form of credit but free of charge, making it easy to sign up without costing the customer extra.

Ivana Karhanová: You want to create a comfortable ecosystem for e-shops. They control the customer until payment and shipment, but after that, you know what happens. What do you know about the customer from the moment they add items to the cart?

Jakub Wagner: Skip Pay works like other payment methods, not too complicated to integrate. We ask for more information from e-shops to complete the payment, like customer name, delivery address, and item details, used for our real-time decision-making scoring system. We provide added value to e-shops by taking on the risk they would otherwise bear.

Ivana Karhanová: How many customers don’t pass through your scoring?

Jakub Wagner: It varies by e-shop. For example, electronics stores might have a 50% approval rate for new customers due to higher risks. But for known customers, approval rates exceed 90%.

Ivana Karhanová: You mentioned helping with returns. How does Skip Pay facilitate this for e-shops and customers?

Jakub Wagner: Recently, we launched a feature assisting with returns. Through our collaboration with Czech fintech Retino, we help customers figure out where to send returns and arrange return shipping, simplifying the process with a few clicks.

Ivana Karhanová: What’s the return rate for goods?

Jakub Wagner: It varies by e-shop. Partners initially think Skip Pay increases returns, but it doesn’t affect their overall rate. It’s just that returning customers tend to use Skip Pay more, reflecting their frequent online shopping habits.

Ivana Karhanová: What insights do you gain from shopping behavior data?

Jakub Wagner: Skip Pay customers shop online more frequently compared to those who pay upfront.

Ivana Karhanová: What’s the added value for e-shops using Skip Pay? Can you provide them with actionable feedback?

Jakub Wagner: We’ve worked with some e-shops on this, demonstrating that Skip Pay increases average order value and shopping frequency, enhancing customer loyalty and satisfaction ratings.

Ivana Karhanová: What do you see as the biggest hurdle for customers with e-shops? Is it the payment process or something else?

Jakub Wagner: The biggest issue is user experience, even for tech-savvy users like me. Overly complicated processes or confusing upsells can deter customers. Also, mobile shopping experience is often underestimated, despite the growing trend of purchases made on mobile devices.

Ivana Karhanová: Mobile payments could be simple with device authentication. What’s your view?

Jakub Wagner: At Skip Pay, if the customer is known to us, they don’t need to enter any information on mobile, which is quite unique.

Ivana Karhanová: What’s the future of deferred payments?

Jakub Wagner: The global trend will see increased use of deferred payments, with enhancements likely focusing on simplifying the shopping process rather than the payments themselves.

Ivana Karhanová: How willing are e-shops to collaborate with Skip Pay or deferred payment systems in general?

Jakub Wagner: We generally receive positive responses from partners interested in how deferred payments can boost their business, focusing on the cost and complexity of integration.

Ivana Karhanová: How complex is the integration?

Jakub Wagner: It varies, but a small e-shop with an experienced developer can integrate it in a day. Larger partners may take longer due to more complex system integration.

Ivana Karhanová: Thank you, Jakub Wagner, CTO of Skip Pay, for visiting our studio.

Jakub Wagner: Thank you very much.