In episode 3 of our newly launched vlog series, Follow the Thread, Stitch Head of Business Development Grant James sits down with Luno Payment Integrations Analyst Tiaan Basson to gain insights into the payments experience and processes at one of the world’s largest crypto platforms.
Since launching in 2013, Luno has become synonymous with cryptocurrency in South Africa. Operating in multiple markets across the globe, the South Africa-founded company has given over 10 million people access to investing in digital assets. On a mission to put the power of cryptocurrency in everyone’s hands, Luno’s premise is to make it safe and easy to explore, buy and store crypto without any prior experience.
To achieve this mission, one critical component is a seamless payments experience. In our latest vlog, Luno’s Payments Integration Analyst for Africa Tiaan Basson explains that for any business operating in the crypto space, the process of making deposits, withdrawals and purchases is key. Any friction has the potential to deter newcomers and repeat purchasers, directly affecting conversion.
“[The payments process] is possibly one of the most important aspects for [customer] retention. Customers trust Luno with their hard-earned cash, and if you don’t have a smooth or trusted experience, that creates friction.”
Designing a frictionless payment journey
Basson joined the fast-growing company back in 2018, with a team of almost 70 which now sits at over 1,000. Today he’s responsible for the payments experience that happens once a user has completed the KYC (know-your-customer) process. This entails ensuring Luno offers the most seamless and efficient fiat on-ramp and off-ramp journeys when making a deposit or withdrawal. Basson also constantly looks for ways to optimise the payments flow with the intention of reducing friction and providing value to customers.
Basson recalls the challenges the team faced in the early days – between battling hype that lingered after an impressive bull run towards the end of 2017 and manual payments processes that made it difficult to manage the enormous volumes.
“If you think of a young company, there are a lot of processes that are very manual. We were battling with the hype and trying to accommodate customers and make the systems work for them when it came to deposits and withdrawals.”
Because the cryptocurrency markets move so quickly, with noticeable price movements often occurring every hour, consumers need and expect a reliable payments experience that enables them to have full control over their investments. Whether they’re depositing or withdrawing, every second counts, and waiting for funds to clear is simply not an option.
“Why is [the customer] depositing in the first place? They want to buy crypto. They might want to buy at a specific price point, and if it takes a long time to receive their funds, the price could have moved. For us to add value and instil trust, customers need to have access to their funds immediately. Making a deposit and not knowing where their money is creates a lot of stress for the customer.”
Emphasis is often placed on the deposit side, but getting your funds off an exchange or platform is equally, if not more, important – especially when it comes to engendering trust. Basson explains, “Speed on both sides is critical. [The customer] might have an obligation and need their funds. If they have to wait two days, that’s immediately a stressful situation which might make them hesitant to use Luno in the future.”
Choosing a payments partner that’ll weather the storm with you
Combating fraud and navigating ever-changing regulatory labyrinths are two more hurdles any blockchain-enabled business will inevitably face. Basson explains, “Regulation is one of the biggest challenges. Crypto is very much unregulated in most markets, and businesses need to be adaptable and have redundancies in place.”
Bank account closures, sometimes with little to no notice, are commonplace in the crypto world. Events like these can have detrimental consequences for businesses without contingency plans. It’s no wonder partnerships are fundamental to facilitating best-in-class crypto offerings.
We created an infographic detailing the tech stack for a typical South African crypto platform and such partners they can rely on to do some of this heavy-lifting. Leveraging your partners’ expertise, networks and resources helps to mitigate risk, as well as distribute the workload. Basson echoes this belief:
“Work with multiple trusted payment service providers and have multiple bank accounts so you have a fall-back. We’ve seen regulations change so rapidly across regions, so we work with credible payment partners that are also adaptable and can help you navigate through the market.”
Today, Luno has multiple payment options that were chosen for their speed, up-time and ability to handle high volumes. When it comes to choosing and integrating with a payments partner, Basson stresses the importance of localisation and familiarity.
“Localise as much as possible, and find methods that customers are familiar with. It’s also really important to look for methods that add value to the customer. Look at reliability and reputation – it’s important that a payment partners’ systems are always up, that they can handle the volumes and transactions.”
Basson recognises the importance of building and maintaining trust with customers – especially when it comes to their money. Many South Africans remain sceptical about cryptocurrencies, and a negative buying experience – sometimes characterised by long wait times or complicated payments processes with a lot of friction – has a direct impact on retention.
“We’re focused on how quickly the customer can go through the journey and make a payment. Having to spend time on this process is not ideal and we need to reduce that as much as possible.”
We launched Follow the Thread to share insights, stories and advice from experts and industry leaders in their fields with the wider tech ecosystem. What would you like to see next? Let us know on Twitter.
For the full story, watch episode 2 of Follow the Thread with Stitch Head of Business Development Grant James and Luno Payments Integrations Analyst, Tiaan Basson.