Democratizing payments for everyone – Abra’s merchant APIs

Today Abra announced the imminent launch of our merchant API solution, known as Abra Pay, and took the next step in our mission to enable billions of customers to participate in the digital economy. Through one simple API, online merchants can dramatically reduce the friction created by incumbent cash-in networks, radically reduce payment acceptance costs and settlement periods, and increase the available audience for their goods and services.

After engaging in extensive user and merchant focus groups and interactions, we are convinced that Abra’s payment solution will address numerous pain points that merchants and customers face as they attempt — and often fail — to transact online.

Globally, localized payment schemes and legacy payment processing payments lead to substantial costs for online merchants and unmeasurable lost sales opportunities. For example, the average merchant discount rate for accepting a credit card in emerging markets (what a merchant pays to its payment processor) is 2-3x higher than what that same merchant would have to pay in Europe or the US. In countries such as the Philippines, where Abra Pay will first be enabled, of the approximately 25 million debit cards in the hands of hard-working, salary-earning and “banked” Filipinos, few if any of the cards can be used for online transactions, regardless of the user’s bank balance.

Bank-based payment systems, i.e. credit card payments, also have their failings in many of the world’s emerging markets. For example, according to some Mexican merchants, banks decline more than 10% of all transactions. In absence of advanced fraud detection tools or viable sources of data for verifying transactions, even Mexican customers with high credit scores and thousands of dollars of line of credit are unable to transact online 1 of 10 times they try.

As a result of these inherent failings of card-based payments in emerging markets, cash-on-delivery (COD) or bank deposits have become the new norm for online merchants. A Singapore-based merchant we interviewed stated that 50% of all its sales are done via a bank deposit. This means 1 out of 2 potential customers has to go wait in line, make a deposit and scan a receipt and e-mail to the merchant before the item is shipped. This is time lost by both the merchant and the consumer; the process serves neither well. For those making cross-border purchases, or those without a bank account, completing the transaction gets even more difficult and the costs go up.

With low merchant fees and real-time multi-currency settlement, we are convinced that Abra Pay will help welcome millions of people into the digital economy and add billions of dollars to merchant revenues as we build out our solution around the world. So whether you are small, medium or large merchant looking for a way to grow your share of the pie, or whether you’re one of the billions of people seeking choice and diversity in your purchases, we look forward to working with you. Welcome to our Digital Cash Network.

Interested merchants can drop us a line at business[at]goabra[dot]com