Payscout, a Los Angeles-based global payment processing company, has launched a virtual reality commerce app to help merchants manage purchases made on digital shopping platforms worldwide.
Unlike e-commerce and mobile payments made through mouse clicks and screen taps, VR commerce payments can be authenticated by a head movement, an iris scan, or through voice recognition.
“VR commerce is a lot more complex than other commerce platforms,” says Payscout CEO Cleveland Brown. That’s because “you’re emotionally connecting to customers and looking for cues to integrate a payment during a 360-degree immersive experience,” he says.
Brown believes VR commerce can capture consumer behavior in ways that other apps can’t, and then use machine-learning algorithms to help merchants determine the best time to promote their products. “We’ll be able to respond to subtle, physical gestures at the exact moment when shoppers are most likely to make purchases,” Brown says.
Payscout’s VR Commerce app is accessed through a mobile-compatible virtual reality headset used with Android smartphones. Once the smartphone is placed inside the viewer, consumers can shop for physical goods within a virtual-reality experience, such as a video game, virtual shopping mall or a VR movie.
Consumers can make secure purchases within the app using Visa Checkout without removing their virtual reality headsets. “We’ve developed a completely frictionless experience,” Brown says.
Yet, even great products can fail if consumers aren’t ready, and VR has taken decades to mature. A new study from CCS Insight, however, suggests that after sluggish acceptance since the 1990’s, the VR market is finally heating up. The report estimates total VR sales to reach more than $28 billion by 2020, up from $1.5 billion today, with VR software sales leading the way.
Brown believes Payscout’s payment processing app is helping the company to differentiate its brand and leapfrog competitors, whose apps still are limited to web and mobile commerce platforms. “We have the first and only payment app available on a VR commerce platform,” he says.
Behind the Scenes
But strong VR software sales will require more than just being first to market. Brown believes his company’s edge is in making movies. A managing partner of the film studio, Film Antics, Brown saw films as an ideal environment to test out in-VR payment scenarios in which users are allowed to purchase prominently featured products.
”We now have an in-house team that combines VR film production and video expertise with online payment application development,” Brown says.
Payscout CFO Dan Gardner notes that VR merchants require just as much attention as consumers do.
There’s a huge opportunity to speed up payment processing times for merchants,” Gardner says.
Using the APIs within the Oracle Financials Cloud application, Gardner’s team directly connects to banks and credit card networks using all types of transaction platforms. “From a finance perspective,” Gardner adds, “after capturing a transaction in VR, there is no difference in the settlement and payment in comparison to other commerce platforms, including physical retail.”
The company hopes the new app will increase its share of the international e-commerce industry, which is expected to reach $1 trillion in sales by 2020, up from $375 billion today, according to a recent study from Accenture and AliResearch.
But collecting funds in multiple currencies involves a matrix of possible payment flows, which is extremely difficult and time consuming to manage with spreadsheets and accounting software.
“With Oracle Financials Cloud,” Gardner says, “we can run and build API scripts that pull transaction data in real time and automate the entire process. We knew that if we could automate this process we’d generate the ROI needed to roll out the system globally.”
Gardner says it took six months to get the ROI from the cloud-based system, and now he’s rolling it out to China, India, and Brazil.
The cloud is also helping Gardner to increase ROI by maintaining the system without adding headcount. Payscout currently has 75 employees, yet only seven are in finance. In the past, Gardner engaged international payment partners to process billions of transactions from thousands of merchants annually. The partners assigned full-time employees to gather, combine and filter all the data from multiple spreadsheets, websites and other sources. The process took several weeks and became a significant line item on the department’s P&L.
Using Oracle Financials Cloud, Payscout can now compress transaction flows from the consumer’s purchase to the merchant’s payment receipt within minutes, without paying for or waiting on teams of payment specialists to manually process the transactions.
“The infrastructure we have with Oracle allows us to process payments in real time, in every geography and on any platform,” Gardner says. “This not only helps us grow globally, it also allows us to onboard more merchants and enable them to expand into international markets as well.”
The next layer Payscout will add to its Oracle cloud infrastructure will be big data, analytics, and machine learning. Alex Bordbar, Payscout’s CTO,says, “helping our merchants prevent incidents of fraud is among our highest priorities.”
Using Oracle Analytics Cloud, Bordbar’s team is teaching the app to identify fraud and then develop a set of algorithms to alert the company of any unusual or aberrant transaction activity by region, currency or amount.
For a global company that’s always running at peak time, the risk of fraud is ongoing. “That’s exactly why we need a reliable partner who can make sure we are being supported 24/7, around the world,” says Bordbar. “In terms of the ease of implementation, tight security, and frequent release updates, Oracle is that partner.”
Sasha Banks-Louie is a brand journalist for Oracle.