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The Agile Brand with Greg Kihlström®: Expert Mode Marketing Technology, AI, & CX
#598: Keeping up with consumer payment preferences with Will Mavromichalis at Kount
00:23:58
Are you keeping up with the changing payment preferences of your customers?
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Capella University Narrator
There's a fire inside you you can't ignore. Stand still. Not a chance. You're a lifelong learner who's come this far. Now we are here to help you keep going further. Capella University. What can't you do? Visit Capella Edu to learn more.
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Carvana Customer
I sold my car in Carvana last night.
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Will Mavram Michaelis
Well, that's cool.
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Carvana Customer
No, you don't understand. It went perfectly. Real offer down to the penny. They're picking it up tomorrow. Nothing went wrong.
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Carvana Friend
So what's the problem?
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Carvana Customer
That is the problem. Nothing in my life goes as smoothly. I'm waiting for the catch.
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Carvana Friend
Maybe there's no catch.
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Carvana Customer
That's exactly what a catch would want me to think.
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Carvana Friend
Wow. You need to relax.
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Carvana Customer
I need to knock on wood. Do we have wood? Is this table wood?
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Carvana Friend
I think it's laminate.
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Carvana Customer
Okay. Yeah, that's good. That's close enough.
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Carvana Friend
Car selling without a catch. Sell your car today on Carvana. Pick up these may apply
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Capella University Narrator
the Agile Brand.
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Greg Kilstrom
Welcome to season six of the Agile Brand where we discuss marketing technology and customer experience, trends, insights and ideas with enterprise and technology platform leaders. We focus on the people, processes, data and platforms that make brands successful, scalable, customer focused and sustainable. This is what makes an agile brand. I'm your host, Greg Kilstrom, advising Fortune 1000 brands on martech, marketing operations and CX, best selling author and speaker. The Agile Brand podcast is brought to you by Tech Systems, an industry leader in full stack technology services, talent services and real world application. For more information go to teksystems.com now let's get on to the show.
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Podcast Host
Are you keeping up with the changing payment preferences of your customers from buy now, pay later to other methods. If your payment strategy isn't evolving, you might be missing out on where your customers want to be. Welcome to today's episode where we're exploring the rapidly changing landscape of online payments with Will Mavram Michaelis, Director of sales, identity and fraud at Count, an Equifax company. We're going to talk about the technology and generational shifts impacting payment behaviors and discuss how retailers can stay ahead of the curve while managing fraud risks.
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Greg Kilstrom
Will, welcome to the show.
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Will Mavram Michaelis
Yeah. Hey Greg, thanks for having me. Excited to be here today.
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Podcast Host
Yeah, yeah. Looking forward to talking about this with you. I know we chatted when we were etel Boston a few months back now at this point, but looking forward to to bringing you on and talking in some more depth about some of these topics. And just before we get started here, if you could just give a little background on yourself and your role at Count, that would be great.
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Will Mavram Michaelis
Yeah, absolutely. And again, thank you for having me today. So, you know, my name is Will Maverick. Alice. You know, I got my start at Count. We're located out of Boise, Idaho. You know, Count was a fun, cool technology company when I was going through college. And so when I got out of college, I'd always kind of kept my tabs on the organization. And then when I jumped in, there's been no looking back. So I've been account now for seven years. We were acquired by Equifax three years ago and really what we do is we tackle the fraud challenges that all merchants, retailers, financial institutions, banks face on a day to day sort of strategy. And so love being able to tackle the fraud challenges that they face.
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Podcast Host
Yeah, yeah, that's great. Yeah. And seven years at a, at a company, that's, that's great, great to be able to say that. So yeah, let's dive in here and want to talk about a few things with you. As I mentioned. First, I want to talk about generational shifts in payment behavior and just changing payment landscape, as I mentioned, and what retailers should do to adapt. So this payment landscape is shifting as younger generations adopt new payment methods like bnpl. Buy now, pay later.
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Greg Kilstrom
How should these generational shifts influence the
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Podcast Host
way that retailers plan for the future?
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Will Mavram Michaelis
Yeah, Greg, that's a great opening question. And even though I have been here for seven years, it feels like, you know, I'm learning new stuff every three to six months. When new fraud trends change or new payments, you know, the landscape is always changing. So there's always fun things to learn about. We saw a huge shift, particularly out of COVID and now that Gen Z is starting to grow up and they're starting to do more interactions online, you know, there's a couple of things that I think about from a retailer's perspective. Gen Z and Millennials typically prefer digital wallets. It just makes their life easier. And so when I think about it from a retailer standpoint, you got to have an omnichannel approach. And you know, that really just means, I know we've all heard omnichannel for years and years and years, but you know, just beating, beating the drum as to say is by having an omnichannel approach and being able to integrate digital payment methods into both a physical and an online space, it'll just help that retailer capture the younger consumer base. It's interesting because what we're also seeing with the younger consumer base is they are really into the incentives and loyalty programs. And so as you grow this omnichannel approach, you have accounts that you can create at a retail website. It's really important, especially for the Gen zers to have incentives and loyalty programs that they can take advantage of. We have found and we have seen and I'm sure you can read about how younger generations love to gamify things. And for them, they love sort of, you know, having that little carrot dangling in front of them. Or if I buy X amount, I get a free coffee, or if I do this, I get that. And so being able to really have, you know, an incentive program I think is key as well as the omni channel approach. And then really finally, when I think about the topic, as, you know, payments is shifting, how do we get the younger generation to come shop with us? Is just having the flexibility in your payment offerings. While that could be cumbersome from a retailer to set up different payment channels in their ecosystem. Right. Like having a buy now pay later channel. Do I have one, do I have two buy now pay laters? Do I allow digital wallets? Do I allow cryptocurrency? Right. It can become complex really quickly, but it makes it very easy for people who are shopping because then they have their preferred option available at that point of checkout, which will help capture sales. Right. One thing we know about Gen Z is they love the flexibility. And so those are just a couple points that I would consider when you think about how do we adopt for generational shifts.
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Podcast Host
Yeah. And so, you know, along those lines, I mean, you know, when, when we're talking about these, these platforms, we are, you know, often talking about Gen Z, maybe even younger millennials, you know, as, as the, the Alphas are approaching, you know, having more of disposable income, all those kinds of things. But you know, what about some of the, the older generations, you know, Gen Xers, boomers, you know, are they, you know, do you see them eventually adopting some of these things that, that are now favored by Gen Z, or are we just going to keep seeing more fragmentation in the payments landscape? Or maybe both?
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Will Mavram Michaelis
Yeah, it's a bit of a loaded question. You're definitely going to see both. I do think that with the older generations you are seeing a gradual adoption into these new payment types. Right. I do think that they still have their preferred methods to pay and you know, they've been doing it this way for so long. Why would they change? So I wouldn't see necessarily the older generations in particular use something like a buy now, pay later or they tend to not opt for payment options that provide credit terms. For the longest time you could walk into a retail store and you could say, hey, you get 10% off now when you purchase. And yeah, that's still, that still works great. But you lose a lot of that interaction online when you're just presented with the credit offer. And so I think particularly with the older generations, you will, you know, just going back to it, you'll see the adoption of things like digital wallets, being able to purchase, you know, with more flexibility. But I think we're seeing it at a slower pace than maybe we anticipated. But that being said, to, to your question, I do see the payment landscape fragmented not only by generations, but by geography. Right. In different geographies, people they buy in certain ways and in other geographies and especially if retailers cross borders or they're trying to grow, it's one thing to pigeonholes into a generation, but now you gotta think about where people live regionally as well. So I do think you're just going to see a continuation of a fragmentation in the market, which is why it's so important for these retailers, unfortunately to have these complex ecosystems on the back end to make it easier for their customers to purchase.
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Podcast Host
Yeah, yeah. And so then building on that, so you know, we're talking about some fragmentation, we're talking about the benefits of brands providing all these options. But you know, there are some costs to this and one of those is the impact on fraud and potential fraud. And so, you know, I'm going to talk a little bit about the, you know, how newer payment methods or just additional payment methods are kind of changing the fraud landscape. So you know, with the rise of methods like buy now, pay later and others, how has the fraud landscape evolved?
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Will Mavram Michaelis
Yeah, I think, you know, historically you have sort of third party fraud where I steal credit cards or somebody, you know, gets a batch of stolen credit cards. I think that will never go away. Regardless, with retailers having sophisticated fraud solutions in place, that's sort of just like your baseline. Right. Like the easy fraud that they could try to get away with has always remained the same. The fraud landscape really took a change once Covid hit. Right. That was when we saw a huge increase or we started to pay more attention to call it the first party fraud. Especially with Gen Z, we found that just compiling on top of first party fraud because again they like to gamify things. So just because you know it is fraud or you are, you know, being doing nefarious activity towards an organization, the young generation doesn't See it that way. They see it as a game or something to take advantage of. And I actually have a personal story I can share about that. Just from last week, you know, it was my wife's birthday. I bought her a new sports band for her watch that she wears. And you know, I kind of just guessed online because, you know, I'm a dude and I bought a watch and I bought a band I thought my wife would like. And so it showed up and you know, shocker, my wife didn't love it, which is okay. So I went back to the website to try to issue a refund or like get an exchange for a new watch band. And the retailer messaged me back pretty much immediately, which is great customer service. And you know what they said, hey, we're going to issue the refund and just keep the band as a souvenir. We don't even want it back. And so on one hand, you look at that like, wow, this is great customer experience. And yeah, I'm definitely going to go back and I win. I bought another band regardless. But on the other hand, you would see something like that as simple as that. Next thing you know, you see it on social media, you see it on group, you know, chat programs, online. Now people are going to try to gamify it. Like I 100% bet if I made a video about that, but on social media, somebody else would try it out there and the next thing you know, it spread like wildfire. And so from that standpoint, we particularly seen a huge increase in the first party fraud. You know, another huge thing that we see in terms of friendly fraud is return abuse. So, you know, you may not be stealing credit cards, you may not be doing criminal activity, but you are just returning things to no end. Meaning there was a clothing brand we work with and the clothing brand, you know, they would see multiple times where you would buy, call it 10t shirts. The 10t shirts would show up to your house, you would try all 10 of them on, you would, you know, I want to keep two of them. And the next thing you know, you return eight back to the clothing brand. And the clothing brand, they have very strict policies, like when they get, you know, refunds on their shirts, now they can't sell them as new, right? And so now they're losing the money on what they could have made. But in order to have that customer experience, they've been letting it slide because they want to capture greater revenue and try to grow their buyer base. And so definitely times are changing. And with that, the Fraud is changing, you know, so there's just to sort of recap what I said. I think third party fraud fraud is always going to remain constant. But the first party fraud is something that I think is, is increasingly challenging for merchants. Now on the Equifax side of the house, if I may, on the Equifax side of the house, what we see in the industry is synthetic ID fraud. So synthetic ID fraud is the fastest growing fraud out there. Like, no, I don't think anyone would really debate that. Like synthetic ID fraud is taking over and I do think that will affect retailers in a numerous amount of ways. From a synthetic ID fraud, retailers may think they're safe. Right. Because they've been so primarily focused on third party fraud and first party fraud. And they might say, oh, synthetic id, that's really targeting advising banks.
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Podcast Host
Yeah.
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Will Mavram Michaelis
Where we're seeing it hit the retailer is that, you know, sort of point of sale financing, especially for buy now pay leader services. You know, a fraudulent account is opened, they could exploit the loyalty programs, they exploit the discounts and all behind the scenes, it's not the actual person that you thought it was. And so, you know, just taking a step back, synthetic ID is I take pieces of PII or pieces of identity from across and I create a new identity. And that, you know, that is synthetic id. And it's very hard to track because it's how do we find who's actually behind, you know, the keyboard? And so that I would say is probably the fastest growing thing of fraud out there and definitely something we're tackling on a daily basis.
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Podcast Host
There's quite a few different ways to maybe answer this question I'm going to ask, but what are some proactive steps that a retailer can take to protect themselves against? Maybe focus on synthetic fraud, since that's an area of focus.
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Will Mavram Michaelis
Absolutely. So being proactive is, you know, I think all retailers are doing a good job of trying to stay proactive. I think it's table stakes these days for a retailer to have an advanced fraud detection tool in place, like everyone you talk to has one. I do think some retailers may be lagging behind if they're relying on their, the processor's built in tools. Right. I mean, we've seen if you're using a fraud tool within your processor, we have found that it works to a certain extent for retailers, but often they will outgrow the capabilities of the fraud tool just because, you know, advanced fraud detection tools, that's all they do is we work on fraud, we try to find new Types of fraud, how do we detect it? Whereas through processors we find it's more of like a bolt on. And so I would always just ask like benchmark what you're doing to the industry. So like that's step one. Right. And so that's one way you can be proactive is just even if you have something and it's working well, just benchmark it against there. I mean, today fraud solutions have to have AI. If they don't have AI, I mean, they're just gonna fall behind. The other thing, when you think about like synthetic ID fraud is it's important for retailers, merchants, FIs, banks, you know, you have to regularly monitor and update your fraud policies. Right. Just because something worked today, something worked at the beginning of the year, doesn't mean it will work six months from now or a year from now. We find that the fraud tactics are changing. And so you have to be able to stay ahead of the game with that. And I understand that, you know, changing fraud policies is cumbersome and it's hard. And so most advanced fraud detection tools offer services where they help their partners with that. And so I would say, you know, benchmark your solution and then even talk to your current provider, see what they are doing to stay ahead of the fraud challenges that are out in the market. I think those are two of the big ways to stay ahead of it. And then sort of going back to the synthetic id, it's really important to do the next step where you're not only just doing risk detection, but now we're doing more of an identity verification. And so unfortunately it does add cost to a retailer to a merchant. And a lot of them need to weigh, does the cost outweigh the fraud that I'm seeing? Right. Because, you know, it's one of the things we hear all the time is yeah, I could go out and buy all the fraud tools, but if my fraud tools cost more than my fraud, why, why would I do it? And so that's why I would think for synthetic ID, you still see it primarily on banks and FIs, but as it does trickle down to retailers, it's just being able to look at your solution and say, okay, this is a risk based fraud prevention solution. I need to start looking at identity verification. SOL solutions, you know, the big bureaus, Equifax being the one I work at, we all offer them. And so just being able to, you know, sort of look at what you have on shelf today and what else could you add? I think is always important.
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Podcast Host
Yeah, yeah. And so you touched on some of this already. But, you know, part of delivering that successful online payment experience is having the right partners in place. And you talked a little bit about that. But I wonder, you know, what should retailers be looking for in an online payments partner? And, you know, how do they know when they found the right one?
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Will Mavram Michaelis
Yeah. So if I was a retailer today and I needed to go out and find a new fraud prevention solution or something to help me mitigate the fraud on my payments experience for my customers, really, there's three things I would do. Number one, I would, I would talk to my peers in the industry. I would ask them, what are they doing? Right? What are they doing? What do they found successful? What hasn't worked, particularly in their vertical? And I know, like, that you used to be taboo, like, oh, going and talking to the competition. And while I agree it used to be, I don't really see that anymore. Right. Like, I have seen, regardless of what vertical you're in, people are getting together, peers are getting together, because, yes, they compete for sales, but they all want to stop fraud and they all want to help each other. Because if I can help stop fraud at, you know, retailer A, it's going to only help me at retailer B. And so I think communicating with your peers and then when you're talking to fraud providers, I always think it's important to say, okay, so you have a solution today, but what is the R and D you're putting back into your technology? How is it helping me tomorrow? I think that is key. And then the last piece is stopping fraud is one, like one line item. Right. But every company cares about revenue, every company cares about growth, every company cares about acquiring new customers. So I think it's one thing to look at a fraud solution, right? And then be like, okay, they're putting the R and D into the technology, so they continue to increase what they can do from a fraud capability. But what are they doing to help me understand the needs of my business? So I think that's the other piece of the puzzle is, yeah, they can stop my fraud, but are they helping me grow revenue? Yes, they can decline transactions, but is that really what's best for my business? And so I think being able to talk with a partner that understands their business goals is vital for success of a fraud solution.
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Podcast Host
Yeah, yeah. And I think that's a good segue to the last topic I wanted to talk about, which is just how do retailers stay ahead in this landscape? So we talked a bit about the consumer preferences, and what we all know is that that's going to continue to evolve. And then certainly fraud is a component of that as well. And so you. For retailers that want to ensure that their brand is staying at the forefront of payment innovations, again, whether that's, you know, risk mitigation and fraud prevention or just consumer preferences on how they want to pay, you know, what advice would you give them to stay ahead of where consumers want to be?
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Will Mavram Michaelis
Yeah, it kind of to my blast question, unfortunately, you know, they're great segues. I think you have to talk to your peers, like, what are my peers in the industry doing? And you do that by attending shows, you do that by listening to podcasts such as yours. You do that by sitting on forums. But also you need to talk to your processors, talk to your gateways, talk about what they are doing to stay ahead of payment innovations and do you need to be a part of them? So those would be really the big three things I would probably recommend from that standpoint.
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Podcast Host
Yeah, yeah. And so what are your thoughts on how important is it to adapt to the current state of things versus anticipating those future things that, you know, that we've talked about a bit?
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Will Mavram Michaelis
Yeah, I mean, I think it goes back to what is the goal of the business? Right. And I think when you talk to a business, if they are just, if, if the, if the roof has fallen off and they are just leaking and they're losing money to fraud and they need to get a handle on it, I think that is always step one, let's stop the fraud, and then it's okay. How do we help you grow your business? What are the trends that are coming in and how could that potentially impact you against your growth for the business? And everything has a sort of a reward. Right. And so just being able to look at it and if you say, hey, you know, we have to grow 20% this year, then okay, maybe we want to take a, you know, a little bit higher of a chance for fraud, but keep these things in mind. And so I think it just goes back again to having that partner that understands sort of what your business needs are and how to help you mitigate as much fraud as possible. That would definitely be what I would recommend. When I think of like the future of payments, I do think that you're going to start to see fraud move up trend. Right. So I think being able to have an identity verification solution, being able to understand who is Will when he's at the door first, letting Will through the door and allow him to start making transactions, I think these are all key things we have to consider.
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Podcast Host
Yeah, yeah, absolutely. Well, thanks so much for joining today. One last question I like to ask everybody here. You know, what do you do to stay agile in your role and how do you find a way to do it consistently?
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Will Mavram Michaelis
Yeah. And you know, before I answer that, Greg, thanks so much for having me today, man. It was great to be a guest on your show and honored to connect and talk honestly about a topic that I love. Absolutely. And so what I do to stay agile in my role is I have the privilege of talking to, you know, clients and prospects daily. They're always keeping me on my toes. Right. You know, one day I'll have a meeting with a huge retailer, the next day it's an fi. The third day it's a processor. And so being able, able to just have the fortunate position of being on the side of the house where I'm helping fix problems, I think allows me to see the trends and things shift over time. So that way I'm a better resource for my partners. Another thing I do to stay agile in my role. Love listening to podcasts, love going to shows, but really at the end of the day, it's just talking to customers.
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Podcast Host
Yeah, yeah, I love it. Yeah. I mean, I. One of the reasons I podcast is I learn something from every conversation I have. So I feel very fortunate to have so many conversations. I totally, totally agree. Well, again, I'd like to thank Will Mavromachalis, Director of Sales Identity and Fraud at Count, for joining us today and sharing his insights. To learn more about Will and Count, please follow the links in the show notes.
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Greg Kilstrom
Thanks again for listening to the Agile Brand brought to you by Tech Systems. If you enjoyed the show, please take a minute to subscribe and leave us a rating so that others can find the show more easily. You can access more episodes of the show at www.greggkillstrom.com. that's G-R E G K I H L S t r o m.com While you're there, check out my series of best selling agile brand guides covering a wide variety of marketing technology topics. Or you can search for Greg Kilstrom on Amazon. The Agile brand is produced by Missing Link, a Latina owned, strategy driven, creatively fueled production company.
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Podcast Host
Co op.
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Greg Kilstrom
From ideation to creation, they craft human connections through intelligent, engaging and informative content. Until next time, stay agile.
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Capella University Narrator
The agile brand.