From complex to consolidated: How City Beach migrated its systems onto a single payments platform with Adyen

City Beach has been a popular Australian fashion retailer since 1985. Its 60-plus stores bring over 300 surf and skatewear brands to the youth market. Over the past few years, it has launched online stores across Australia, as well as New Zealand and the US.

We spoke to City Beach’s Chief Information Officer, Rhian Greenway, about its massive IT transformation, which involved upgrading enterprise resource planning (ERP) systems across its brick-and-mortar locations and improving its ecommerce proposition. This exercise was not simply to solve existing problems: City Beach was looking to upgrade and futureproof the entire ERP system. One part of this overall vision was to provide a smooth payment process. The company had three major priorities for payments: a unified commerce platform, improved fraud and risk management, and the ability to add new payment methods efficiently.

However, making large-scale changes to IT systems is a multi-year process that is easier said than done. City Beach made the bold decision to go ahead, and in 2018, the transformation began.

Through partnering with Adyen, City Beach has been able to add new payment options, including Buy Now Pay Later, which customers are increasingly adopting across Australia. City Beach is also using Adyen’s technology to manage risk, reduce fraud, and move closer to a seamless customer journey. With machine learning and unified commerce set to boost City Beach’spayment systemeven further, the future looks bright.

Prior to the tech overhaul, City Beach worked with several different payment partners servicing various parts of the payment system.

As a result, City Beach had limited visibility and control over payment and risk management across different channels. For instance, staff would have to log in to separate accounts with vendors to review and process information. This meant that tasks such as reconciliation, refunds and fraud investigations took longer. Valuable data on payment trends and customer insights were also distributed across vendors and could not always be consolidated for analysis.

City Beach needed a way to make it seamless for customers to pay and for the company to manage the process at the back end easily. When the City Beach team encountered Adyen’s solution, they saw the value in working with a technology provider whose product suite was deeply rooted in payments. “We felt that Adyen’s unified commerce offering could take us into the future.”

The first enhancement was to make refunds and chargebacks visible on a single platform. City Beach staff can now view all relevant logs in Adyen’s platform dashboard, the Customer Area. One especially useful feature highlighted by Rhian was instant notifications of chargebacks. Before the upgrade, the retailer would receive chargeback alerts weeks after initiation, giving it insufficient time to respond. “With instant alerts, we get 30 to 90 days to investigate, work out whether it’s legitimate, and have a discussion with the other parties as opposed to just losing both revenue and product,” said Rhian.

The second improvement was to have more granular risk and fraud management control. Adyen’s fraud and risk tool, RevenueProtect, made it convenient to set rules and customize them to the needs of the business. Even better, with all payment records on a single platform, there was more data to analyze, making fraud detection more accurate.

This was especially valuable when City Beach expanded its operations to the US. His team discovered that fraud patterns were different in the US compared to Australia. City Beach was able to pick up on these differences with Adyen’s help and adjust fraud risk rules accordingly. “Once you work out what the payment and fraud trends are, it’s hugely powerful to be able to tweak payment rules,” said Rhian.

This solution becomes even more powerful with machine learning, a trial which City Beach and Adyen are currently running. Machine learning can make a great risk management system even better by using artificial intelligence (AI) to make risk assessments.

The machine learning tool analyses City Beach’s payment data and “learns” the patterns and characteristics of legitimate purchases. Any attempted payments outside of those criteria are flagged so that City Beach can investigate further. Test results have been promising so far. In the machine learning trials, City Beach was able to increase authorization rates by 1.98%, with no corresponding rise in the risk level. There was also a 3% reduction in the number of transactions that would have been rejected – again, without compromising on the company’s risk threshold.

With a fraud solution bolstered by machine learning, City Beach can enjoy greater payment security, a better customer experience, and time saved by a reduction in manual work. “With machine learning, automation means that the tool can do the hard work for us,” explains Rhian. “We don’t take our eyes off the system, but it helps to have exceptions highlighted by the tool, and it saves us having to trawl through transactions looking for trends.”

City Beach’s next priority was to make it simpler to add payment types. Before the ERP transformation, this task was costly in terms of both time and money. Each time City Beach wanted to add a new payment method for customers, the IT team would have to contact a vendor to help integrate it into its existing systems.

Adyen has helped streamline this process and continually adds new, relevant payment methods to the platform. This makes it faster, cheaper and more convenient to increase the number of available payment types and also means that City Beach can manage and track payment methods on a single platform.

This solution also brought City Beach an advantage when it expanded to the US. From its first day of operations, the company was able to give customers the choice to pay using a Buy Now Pay Later provider, Afterpay, alongside traditional card options. By providing a wider selection of payment methods from day one, City Beach has shown its customers that their experience matters at every stage of purchase.

Four years on from the start of the IT transformation, City Beach is well on its way towards having a flexible, seamless payment system. It’s now business as usual for the retailer to process refunds, manage risks and integrate payment methods using Adyen’s tools.

Although the bulk of City Beach’s ERP transformation is complete, Rhian remarks that “There’s always more work to be done.” After all, technology is constantly evolving, which means a digitization project is never truly ‘over’: there are always opportunities to enhance operations further and add new features.

One such opportunity is to move closer to unified commerce. In a future with a fully unified commerce solution in place, City Beach can enable seamless, cross channel shopping for their customers, driving further growth and loyalty. And Rhian is confident that Adyen has the technical capabilities to support the retailer. “It’s been a great relationship to date, and implementation and integration have been really easy.”

And when it comes to customer experience, Rhian’s vision is crystal clear: “For customers, it should be seamless. They shouldn’t know what platform we use or how it works.” City Beach trusts Adyen to make this possible.