Financial solutions for online sales

2021. december 13.

For a long time, the payment options offered by online shops have played a key role in online commerce. The market has moved well beyond this, but financial solutions can now play an even more important role in the race for customers’ favour. eMAG has already introduced a number of such developments in Romania, the company’s home market. We spoke to Stejara Pircan, the company’s Vice President of Electronics and Consumer Goods, about these services.

The eMAG cobrand bankcard available on the Romanian market.  Is it a credit card or a debit card? What are the advantages for the cardholder?

In our aim to provide our customers more flexible solutions regarding the payment method without putting too much pressure on the personal budget, we introduced the opportunity to allow them to pay for their purchase in instalments. The cobrand card is a credit card and one of the advantages for the credit card holder is that they benefit from up to 24 interest-free loans or loyalty points up to 10% of the total value of the shopping bag depending on the purchase.

The company also offers eCredit, an online merchandise credit, which has the special feature that the application is processed within 10 minutes. How can credit approval be so fast? Does the IT system make this possible or are there other factors involved?

Both ourselves and our partners have made significant investments in technology and we worked together to automate all steps of the credit flow, from onboarding to revenue check and payment behavior to contract signing. We managed to have a 100% online flow that does not take more than 10 minutes and does not involve any human interactions. In order to make this possible, we developed an algorithm for approving the loans which keeps track both on the customers’ ordering history on eMAG and which is linked to the Credit Bureau (the institution which verifies the credit history). The process is quite easy: after adding the desired products to the cart, customers should pick eCredit as their payment method. Then, they should submit a photo of their ID and in just a few seconds customers receive a code via text message through which they validate the phone number and upload a video selfie. The bank checks the credit request instantly and the contract is signed digitally via text message. The future is digital and so will become the banking industry, thus we are happy that we managed to develop this modern, fast and simple solution for our consumers.

Is this facility only available through the eMAG application or also on your website? How popular is the service? What proportion of customers take advantage of this facility?

This is an omnichannel solution meant to serve current and potential clients both online and in store where they benefit from assistance. The awareness of the solution has been constantly increasing which means to us that both our systems and our partners worked fast and so did the approval flow. Our consumers need flexible payment solutions and we developed several services meant to match their needs and expectations. While some are interested in the online credit, other prefer using a credit card and pay in several interest-free installments. However, this was a unique type of service when we launched it and we received good feedback from our community.

Other credit facilities are also offered, such as 15-day deferred payment.  How does this work? In which cases is this option useful for consumers?

eMAG is an ecommerce pioneer and it always sought-after new ways for enhancing the customer experience. Buy now, pay later (BNPL) is an option which became quickly popular in other markets as it allows shoppers the option of splitting the cost of purchases into equal installment payments spaced out over a predetermined period of time. This service gained ground because it contributed to remove a concern many consumers were facing, which relates to worries that the products ordered online might not fit.  Through BNPL our customers have the possibility to choose a product, try it at home and pay it within 15 days or return it in case it does not match their expectations, without having any amount of money blocked along the process. The payment method allows selected customers order from a wide range of products sold by eMAG which cost up to 2,000 lei (400 EUR). The eligible customers are selected based on AI algorithms, which take into account multiple parameters related mainly to their purchasing history.

Another service you offer is the option to pay in 4 instalments. Is this available for all products or is there a limit?

For orders with a value lower than 400 euro, they can choose paying in four equal interest free installments. This is an extension of the current financing means which allows consumers to pay for the products they need without additional pressure on the personal budget, as the first installment is worth 25% of the order’s value.

Is it financed by eMAG or through a financial service provider? Is there also a credit assessment here?

Just as with Buy Now Pay later, we are financing this option, and there is no credit assessment involved. This solution is available for those clients who saved their card in their account, thus banks & card issuers are involved to this extent. When it comes to loans, we are working with the most prominent partners for consumers loan and this allows us to cover 90% of the credit cards market in Romania.

In the Romanian market, eMAG guarantees a 30-minute money back guarantee. Does this apply to all orders, even cash on delivery?  Also, how do you calculate the 30 minutes? From when the product is considered returned?

The 30-minute money back guarantee applies to clients who have their card saved in their eMAG account. We have the magic return that allows clients receive their money back before we check the parcel, therefore clients may receive their money back even faster that 30 minutes, right after closing the easybox door or after handling the parcel to the courier. We operate on Visa and Mastercard technology for instant transfer that is available to orders paid online by card. The clients who do not benefit from the magic return have the instant money back option which allows them to get their money in maximum 30 minutes from the moment the return has been validated. This option is also available in Hungary.

The Genius system is a very interesting development. What exactly does this mean, how does it work and what benefits does it offer to customers?

The premium service dedicated to eMAG customers is available for over 10 million people living in 353 cities in Romania. The yearly subscription costs 99 RON (around 20 euro) and the consumers can enjoy unlimited benefits such as fast, free delivery or extended return period to 60 days and other exclusive benefits, such as special discounts. The consumers can either opt for courier delivery, or for personal order pick-up from one of the 2,100 easybox units installed throughout the country. On top, they can even benefit for free shipping from tazz by eMAG, the fast delivery platform, offering products from restaurants, groceries and even pharmacies.

Moreover, we developed a more predictable delivery service starting from our customers feedback, which told us that they would prefer ordering more from eMAG than from the store, if we managed to deliver faster, including on weekends. So, we analyzed our options, enhanced our logistics processes and we recently launched the same day delivery option for customers in Bucharest, for orders placed until 12:30, service available both at easybox and by courier, seven days a week, even at weekends. Same day delivery is available for free for Genius subscribers, respectively 16.99 lei (less than 4 eur) for non-members.

„Each market has its particularities, and we are keen on developing tailor made solutions, addressing the needs of our consumers.

Stejara Pircan, eMAG Vice President of Electronics and Consumer Goods

Do you expect these developments and solutions to be introduced to the Hungarian market as part of eMAG’s services?  If so, what will they be and when are they planned to be launched?

Each market has its particularities, and we are keen on developing tailor made solutions, addressing the needs of our consumers. We are testing in one country most of our ideas and if they turn out to be successful, we are analyzing the possibility of adapting and introducing them to other markets as well. Some are already available on the Hungarian market, for instance eCredit, which is run along with two partners and, as well, instant money back. We also extended our easybox network in Hungary offering more flexibility. Currently, we are expanding our financing facilities for our Hungarian customers, including BNPL.  In our efforts to improve our customers lives and to help them to save time and money, we are constantly innovating by trying new ideas and developing new services.

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