Optimizing Ecommerce Customer Experience with Digital River 

By Ogo Nwanyanwu, Research Director, SAPinsider  

Key Takeaways  

• Organizations executing ecommerce transactions are subject to complex cross-border compliance requirements that can vary by each local destination.  
• Outsourcing back-office infrastructure using a merchant of record partner can help to simplify these responsibilities and protect organizations from compliance risks and penalties.  
• Digital River’s Payments, Tax, Fraud & Compliance Management app in the SAP store integrates with SAP’s commerce cloud to support compliant global ecommerce transactions that align with customer experience preferences. 

Compliance and regulation concerns are a pain point for many companies, including SAPinsider member organizations supporting ecommerce businesses. Compliance requirements often vary by destination country and region when transactions cross national borders.   

Furthermore, online consumers from every region have unique preferences regarding local payment methods and currencies and user experience expectations. These requirements constantly change in response to current events and economic conditions. This uncertainty makes it difficult for brands operating ecommerce channels to offer seamless, localized checkout experiences and establish transparent tax and compliance processes without sacrificing customer experience goals, such as speed of checkout and ease of purchase.  

SAPinsider spoke with Jason Nyhus, Senior Vice President Global Sales and Alliances at Digital River, about global brands’ challenges in delivering a positive customer experience aligned with compliant global ecommerce transactions. Digital River is an SAP partner, offering its Payments, Tax, Fraud, & Compliance Management application in the SAP Store. SAP and Digital River are clients of the other’s respective solutions and share multiple enterprise clients.  

Link to Video Technology Insight: Video Q&A with Jason Nyhus, Senior Vice President Global Sales and Alliances, Digital River 

The Growing Role of Tax Compliance in Global Ecommerce  

To complete global ecommerce transactions, a business must account for regional regulations that address fraud concerns and affect global tax management.  

Data from our SAPinsider benchmark report on digital tax strategy, Trends in Tax, reveals that the top driver for community members implementing or evaluating financial management solutions to address tax digitalization — including global tax management — is growing complexity in compliance management, governance, and regulations.  

Nyhus confirms the growing impact of tax compliance on global ecommerce brands, saying “the value proposition around tax compliance is off the charts due to all of the tax law changes recently. Major countries are constantly changing their tax laws and expect companies to update business practices or do things differently.”  

The current operating environment requires organizations to provide customers with a positive ecommerce experience, supported by frictionless local and global payment flows and efficient information exchange with financial institutions and regulators. Digital River offers a single, integrated solution that simplifies not only global tax complexities but also enables local payments and efficient and effective fraud and compliance management on a global scale. 

Business Trends Impacting Global Ecommerce Brands  

Along with the increasing role of tax compliance on global ecommerce transactions, Nyhus notes the following trends from his conversations with customers:  

• Buy now, pay later (BNPL): Companies view BNPL as “a new aged credit card” that enables one-click checkout and is currently driving adoption in the apparel industry among younger shoppers. However, with over 50 BNPL options globally, organizations face complexity to maintain a positive customer experience as they implement this popular payment structure across multiple BNPL providers.  
• Customers want familiar and local experiences: Customers expect online storefronts (even those abroad) to offer localized languages alongside preferred payment options, as well as local currency exchange rates. Digital River continues to evolve its payments platform and plans to deliver additional local payment methods in 2022 to support optimized conversions and drive global growth, Nyhus says.  
• Direct-to-consumer (D2C) model as a catalyst for the growth of social/mobile channels: Social media has become a vital ecommerce channel for global brands. Through social commerce, consumers leverage the various features of social networks to discover products that are relevant in their lives or their areas of interest. Brands are leveraging social media channels as part of their direct-to-consumer model to promote their ecommerce sites and products and drive traffic.  

Social & Mobile Sales Channels Add to Global Ecommerce Complexity  

Whether consumers shop on a mobile device or a laptop computer, shopping through social media is gaining adoption among ecommerce customers. The easy product search for recommended items using hashtags enables new ways to find products and share deals with other shoppers.  

Social commerce is shifting ecommerce beyond online payments. Brands continue to expand across social channels, mobile platforms, and virtual reality to help meet customer expectations. Consumers engaging retailers on social media and mobile want their personal information and financial data protected, with financial transactions handled online in a secure way. As a result, organizations should increase back-office automation to keep up with customer demands and compliance on a global scale.  

The merchant of record model provided by Digital River’s Global Seller Services solution enables ecommerce businesses to offload their global ecommerce infrastructure’s entire back-end by simplifying payments, fraud, tax, and compliance management. In addition, these processes extend across social and mobile shopping channels, allowing for greater focus on localized marketing and improved outreach via social media.  

How Digital River Helps SAP Customers Deliver Both “Local and Global” Ecommerce Customer Experiences  

The demands of cross-border financial transactions have grown significantly over the past few years — from tax structure identification in checkout for goods crossing borders to receiving payments from customers protected by fraud management, identity verification, and security tokenization solutions across regions and countries. “The further you are from your customer across all those dimensions, the lower the odds of success,” Nyhus says.  

As a result, global brands are embracing the flexibility to structure global ecommerce payments as cross-border transactions or onshore transactions that leverage local entities to support a localized online shopping experience. According to Nyhus, “the difference between the two transactions (cross-border vs. onshore) is not only dramatic in terms of what the customer feels, but also what the brand feels in terms of benefit. An onshore transaction has an 8-12% better authorization rate, which is a corollary to revenue versus a transaction that’s cross-border.”  

Whether cross-border or onshore transactions, the regulatory scrutiny over the payment process creates a significant back-end administrative burden for ecommerce businesses. The Digital River Payments, Fraud, Tax & Compliance Management app in the SAP store can support organizations that want to operate in more countries and retain control of how they do business. The integration with SAP Commerce Cloud enables organizations to streamline their entire ecommerce infrastructure and optimize compliance for global transactions. “When brands use Digital River, they are effectively local and global,” Nyhus says.  

What This Means for SAPinsiders  

The global ecommerce operating environment is changing rapidly as customer preferences and compliance and security requirements constantly evolve. Here are some takeaways that SAPinsiders should keep in mind as they consider their technology needs for achieving a modern global ecommerce transaction framework:  

• Customer experience is vital to global ecommerce growth. To attract new and returning customers, brands must manage the entire checkout process in a way that provides a great customer experience. Businesses that provide customers with highly convenient shopping experiences across the whole ecommerce lifecycle will be the winners in the long term. 
• Global ecommerce infrastructure solutions need to be flexible, scalable, and adaptive. There is no one solution for all locations, so it will be necessary for brands to have a flexible solution tailored to each region. 
• Prioritize solutions that support core strategic initiatives. Partnering with ecommerce experts that can take on the complexity and risk of international selling allows brands to focus on their core competencies. Brands should also look towards automation of back-office functions to simplify operations. These approaches allow for more time and energy to be spent on optimizing the direct-to-consumer strategy and the overall customer experience.