The Future of Payment for WooCommerce Sites

Robert: I would say, welcome to a new podcast of the Do the Woo. How do we call that? The Future of Payment?

David: Let’s do that. Let’s roll with that.

Robert: That’s episode number one right now. So can you introduce yourself, because it’s a new podcast series, so we should introduce ourselves first.

David: I don’t know how I feel about just starting on a new one. Do the Woo was so good. Why not build on top of it?

Robert: It’s still Do the Woo.

David: Okay.

Robert: But it will be Do the Woo, The Future of Payment.

David: So, Inpsyde is hijacking this podcast, basically.

Robert: No, no, no. People who know me. Hi, I’m Robert.

David: Robert Windisch is hijacking this podcast. I don’t know how Bob feel about that.

Robert: People from the community who know me going like, “Oh, someone agreed to sit with Robert on a podcast.”

David: Correct. That’s me, unfortunately.

Robert: And the first question, I was like, softball or hardball question?

David: Hardball’s only.

Robert: You don’t know me right now. People who are hearing this for the first time was like, “This dude is weird.” Yes I am. So, but it’s people from the community know me… I am in the ecosystem since 2005. So I’m seeing our ecosystem maturing over the time. It’s way more connected, way more exclusive. Oh, my God. Almost so many less white men on stages. I’m saying that as a white man.

We had 10 years or 20 or 15 years of possibilities to go on the stage. We did. We did several times. And so I’m so happy how the community changed, but seeing all that and seeing all the acquisitions, money going in, and money, as you heard, from the opening of this podcast, money is the source of everything we do. That’s fueling the ecosystem, that’s really the base there. So that’s why the podcast is the future of that.

David: It’s not Do the Woo. It’s the Future of Payments. So let me introduce myself, too.

Robert: But it’s on the Do the Woo.

David: It’s on Do the Woo. It’s a segment.

Robert: Because as we can remind you, the mission of WooCommerce is democratizing commerce.

David: It is. Ambitious vision.

Robert: It’s not eCommerce. It’s democratizing commerce. And if you think about commerce, then one thing is always there. How do you pay for this? It’s because it’s commerce. It’s not like giving away free stuff, thing. So it’s always about transaction.

David: If your payments don’t work, then your store isn’t a store. It’s a gallery, right?

Robert: Yeah, exactly.

David: Yeah. So I’ll introduce myself. I’m David Mainayar, co-founder at PeachPay. And you’re absolutely right. The space is commercializing. It’s becoming more commercial. What I’ve heard from people is the space is getting less community. WordPress is less community oriented.

Robert: No, no, no, no, no.

David: It’s more commercial.

Robert: I need to stop you right there. You’re currently in a Do the Woo podcast talking about the Future of Payments. So we left the communities all fuzzy and we all hug each other.

David: We left that world.

Robert: So we’re still in this world.

David: We’re still in it?

Robert: We’re still in the world, but we are in the more, let’s say, frank world, in the more honest world. It’s not commercial. In the more honest world of, okay. We’re currently in a big arena in Porto and we both traveled here somehow.

David: Right. I came here by train with Bob.

Robert: Yeah, I’ve. okay. You have a special story, BUT I flew in, so, if-

David: No. That’s just a joke. Bob did that for, I think last year’s State of the Work.

Robert: Exactly. Traveled from Seattle to New York.

David: Yeah. What a guy.

Robert: So, but to get back to the story. So we are talking about eCommerce and yes, the community has a weird way, but it’s all free. ECommerce was never free. When CD Baby, a very, very, very, very old store started eCommerce things, not was not like, “But why do I need to pay for CDs? So eCommerce was always commercial. It’s a transaction.

So that’s why we want to talk about the future of how do we do payments and what is awaiting us? We might touch in the future episodes, Web3 and stuff but for now.

David: That whole world is currently experiencing a bit of a humbling moment.

Robert: Yeah. But that’s the fun thing with Web3. If you talk about it in half a year, it’s still right. So it will be still the case, because why should they not shoplift? That’s another episode. That’s a really different episode.

David: That’s another episode, yeah, yeah, absolutely.

Robert: But, okay, how can that go into democratizing commerce?

David: It’s just so new.

Robert: No, it’s not new.

David: Come on, merchants aren’t using cryptocurrency. The majority of merchants aren’t using cryptocurrency as a currency to transact, to accept. They’re not accepting cryptocurrency and it’s changed for goods and services, right?

Robert: Yeah.

David: Not yet.

Robert: But this will be a different episode. For me, the point is blockchain is solving a trust issue. Nobody currently has a trust issue. Only the blockchain people go like, “Do you really trust people?” And then they pull your money out of your wallet. So it’s currently for the platform that goes like, “Trust, trust, don’t trust,” to have zero trust and everything. And then they, if you trust them with your money, then it’s like, “But why did you trust this thing?” No, no. It’s like, “It’s all no trust.” So it’s like, “Oh, you need to be really advanced knowledge.” And even if you do, you get your monkeys be stolen from you.

So it’s a really interesting to me but for me, the question is always then, how does they go into democratizing commerce? That’s for me, when we will talk about blockchains and NFTs and stuff, it’s for me always going back to the mission of WooCommerce democratizing commerce. Because that’s the thing, where can that help? But going back to the beginning, to the hard-hitting question.

How will the world look like if every hosting company has their own payment service?

David: I don’t think every hosting company can. Well, the big ones have the highest chance of succeeding, but the smaller hosts, I think, can get a head start by starting now and they might be able to succeed if they start now. I can see that happening. And they build out their payment solution now. I think every one of these payment solutions, basically they’d be going head to head with WooCommerce, with WooCommerce payments. So that’s an uncomfortable discussion, but it’s one that probably will play out in the coming months and years.

I think also all these payment solutions as a absolute must have will need to do payment orchestration. So you have GoDaddy’s point. Their acquisition brought them hardware, it brought them software, it brought them a payment processor. So if these other hosts that go this route will get their own processors, they’re going to need to integrate with those that have the most traction in WooCommerce, by far Stripe, PayPal, and also Square. They’re going to need to have integrations with these. And it’s basically, then, it’s a knife fight in the mud for the basis points on the transaction.

Robert: No, I think if you switch your hosting company, because that happens, then you will need to your payment.

David: It’s difficult, exactly. But now you just use the official Stripe, PayPal plug in, whatever.

Robert: Yeah. But the thing is, it’s about the onboarding. So that’s, as we all know, we had client discussions, client storming in like, “Yeah, we just launched yesterday and our payment does not work.” And we’re going like, “Yeah, did you try that? That’s the most important thing of your shop.” And they go like, “Yeah, yeah. We focused on the website, the shop and everything else, and the payment was on the list, but now we are live. Can you fix things?” Because that’s the most integrational part of the user interaction, the user experience.

David: You’re absolutely right. And too often, it’s an afterthought for the merchant, for the host, for the agency, for everybody. It’s an afterthought and it can’t stay an afterthought. It’s not for smart, fast moving big company, GoDaddy. It’s not an afterthought anymore.

Thanks to our Pod Friends Weglot and LearnDash

Robert: So yeah. That’s why, but it needs to be so easy that you, because you already signed up for a hosting company, going like, “Okay, I trust you with my money. Here’s my money. Now give me the product you promised me to.” And then it goes like, “Okay, the product that you choose,” because you chose us, was a eCommerce store. And now there’s a new onboarding. And it’s way complicated. There’s a new people shipping and payment, but we’ll only focus on the payment. There’s new people I need to contact you to, because you need to deal with them, because we don’t do that.

I’m not saying that we get kicked by that, but why does Shopify has the better user experience in the onboarding? Not the onboarding, but why are people so satisfied with Shopify and so many people of the ecosystem see that. They see the numbers and going like, “Okay, let’s learn from that.”

And the benefit for us is, if one hosting company learns that, another hosting company, or a service provider doing payments can see, they go like, “Oh, let’s write a user story in our ticket system.”

David: You basically think through the hosts, building on WordPress and building on WooCommerce, so we can have our cake and eat it too. We can beat Shopify without losing all the benefits of decentralization and WooCommerce and WordPress and open source.

Robert: Yeah. It’s because they, at the end, there will be some features that people cannot migrate from the hosting companies when they switch to a different hosting company, because that’s baked into the system. Let’s call it a SaaS.

David: Yeah. It’s a SaaS.

Robert: So it’s basically a SaaS version of your hosting doing something for you.

David: Any of these payment solutions would naturally fit into a SaaS, right?

Robert: Yeah.

David: And it’s the key to getting the payment solution out there. And I think we didn’t really touch on why these payment solutions in the first place, what they opened the door to. They opened the door to a passive, recurring revenue channel, a new, and basically a new trail being blazed through money, like basis points from every transaction. Right now, the hosts, they benefit from big stores on WooCommerce by getting higher rates per month. Obviously bigger stores have more traffic and need better hosting, more servers, that kind of thing. And so that’s how they win from big stores.

But in with a payment solution, those interests are even more aligned because if that store grows on a GMB level, then, with that host payment solution, the host would see some of that too.

And so it’s a no-brainer. Right now, every host is getting zero from the transactions themselves. So there needs to be at least something. And yeah, it will come down to a race or processing volume. The way I see it, there are two routes to securing as much processing volume as possible, basically getting as much traction with the payment solution as possible. One is the SSAS offering, a very compelling SSAS offering. And basically a guided onboarding experience, like you were talking about.

And the other is, I think, on top of payments, again, this fits into the SSAS offering, a better checkout experience. Right? And I already touched on payment orchestration. Maybe that’s the third thing. Obviously, that’s what I focus on at PeachPay. I think that checkout is also a no brainer and too often, an afterthought, even more of an afterthought than payments, frankly.

People set up Stripe, PayPal. They don’t think about optimizing the checkout page beyond maybe adding some custom fields, that kind of thing. But that’s a huge reason why Shopify merchants win too, is Shop Pay. You have the express checkout option. And just the Shopify checkout page itself is much better, right? Out of the box.

Robert: So, yeah. But that’s for us the beauty. Because with learning from Shopify and now having people more intrinsic motivated because, as you see that the payment providers, they can go into the payment, there is possibilities to go into the payment, how it looks like and how it would be transitioned and that, but to have everyone in the ecosystem who does WooCommerce stores being interested in contributing to WooCommerce itself, to going, “Hey, it would be awesome if we,” because we saw that, “Would be an awesome thing to take on forward.” Because WooCommerce itself has many pillars that build on what they’re focusing on to helping merchants succeed.

That’s one of the things they are really, really, really focused on. But then payment and the checkout view is one thing there, but it’s, for this podcast series, that’s the main thing. How do we do… The future of that. How we can move forward with that to really see, “Okay, how can it would be as easy as possible, learn from everybody, we collaborate because we still open source.” You can collaborate without collaborating. So if someone builds an awesome product for WooCommerce and they don’t share how they do that, someone else can simply go in, look at that, and go, “Oh, I understand how this works. Let’s build that.” So it’s really the benefit for the whole open source WooCommerce ecosystem to learn from that.

David: Yeah, the way I see it is commerce is this really vast network ecosystem of plugins, right? There’s 60,000 WordPress plugins out there. Only some fraction of those affect WooCommerce, but it’s still a big fraction.

It’s a vast amount of plugins and themes that you have to play with as a WooCommerce merchant, as a developer. And the real opportunity for the hosts, and what the smart hosts are already doing, the managed hosts, is shining a light on the right parts of the ecosystem that make sense given the clients, that they know best, right? They know their use cases. T

Robert: They maybe have a heavy niche.

David: Yeah. They have a niche maybe, or they have a number of niches. They have a number of personas and they will pair the right combination of themes and plugins with the right customer persona.

Our agreement is, or both of our shared argument is that, checkout and payments should simply be part of that combination of plugins, themes, tools in general, that hosts think about and pair their customer personas with. And again, I do think that it’s, the bigger hosts have the advantage, just when you look at the unit economics of it. But any host that starts now has a real opportunity to basically build and ship and learn from what merchants are asking for in terms of checkout and payments. And so even if it’s a smaller host, by getting a head start, have a, maybe a checkout payment solution that is then adopted by other hosts.

It wouldn’t be the craziest thing when you consider that, we’re getting into the world of FinTech. And it’s been said in the crazy Silicon valley VC world that every company is fast becoming a FinTech company. And I guess you could say that this would be hosts moving in the direction of FinTech. When you consider that in the world of FinTech, Stripe, by the end of this year, supposed to integrate with PayPal, once their biggest competitor, still pretty much their biggest competitor, right? So it’s a crazy world and it wouldn’t be the craziest thing to see a host’s payment solution used by other hosts, maybe if they agree that they’re just doing it way better.

Robert: Yeah. If you get, or if you do that, white-label that.

David: White-label it.

Robert: Yeah. To give us something of this cut and then deal with that, yeah.

David: Because right now, it’s zero. So even if you split it relatively equally, it’s better than zero. We’re just going to have to see.

Robert: Awesome. I think that was a good impromptu first episode of that.

David: Yeah. I agree. And much more to speak about this topic and there definitely are going to be some developments in the coming months. I think with GoDaddy, especially. So we’re going to have to see. It’s going to be material for more episodes.

Robert: So we might give you a heavy update there.

David: Yeah. Cool. Awesome.

Robert: So, see you.

David: Yeah. Take care.