MediaMarkt: transforming payment processing in the insurance industry

A recent study reveals that financial companies, including insurers, have the highest abandonment rate during checkout, reaching 84% compared to the overall average of 70%. Our latest research indicates that up to 61% of consumers abandon their purchases if they are unable to use their preferred payment methods. Therefore, an optimal payment experience is crucial. 

Within the insurance sector, MediaMarkt, a leading company in Europe in the distribution of consumer electronics and related services, with more than 1,000 shops in 11 countries (including Germany, Spain and Italy), has MediaMarkt Protect Solutions, a service that provides different types of insurance and extended warranties for electronic products and other environments (home, health, mobility, cybersecurity, payment protection, pets, etc.). The company, founded in 1979 in Germany and currently operating in more than 1,000 shops across Europe, offers this solution to protect customers' purchases against various types of damage, theft, or technical failures that may occur after purchase. Currently, MediaMarkt Protect Solutions distributes more than 1.5 million policies per year in Spain alone, of which 40% are in monthly subscription format and more than 11 million across Europe. 

Prior to its alliance with Adyen, MediaMarkt needed to generate customer subscriptions for extended warranty insurance, mobility insurance, device rentals and McAfee/Office/JottaCloud subscriptions on a monthly basis, both by card and current account. 

After analysing the different players in the sector, MediaMarkt found Adyen to be the ideal partner given its ability to tokenise its customers' cards in shop, extending and giving greater added value to the subscription of services and solutions; even when the card expires and the issuing bank sends a new one to the customer.

MediaMarkt needed a partner capable of ensuring continuous payments even when cards expire and are replaced. Adyen's flexibility and range of solutions were key to solving this type of critical payment management problem. 

With this technology, MediaMarkt sought to improve the customer experience, reduce human error in payment data, increase security and foster loyalty through a simpler recurring payment system.

The company's main objectives included:

• Reducing chargebacks by 90%.

• Increasing customer retention by 15% in the first year.

• Reducing the time spent managing payment incidents by 50%.

• Increased policy sales by 20%.

• Integration of new technologies, such as an omni-channel platform for multiple payment methods and monthly payment solutions for services and electronic device rentals.

One of the main challenges of this new partnership was the integration with the Protect Solutions Platform (PSP). In the past, the company offered bank transfers, but now they have identified the benefits of implementing a new solution like Adyen.

By using Adyen devices, MediaMarkt's customers can initiate monthly recurring payments by initiating their contract directly through one of the devices. This facilitates charging for services on a recurring basis. In turn, thanks to this new experience, MediaMarkt shops have been able to experience improved conversion and retention of new policies.

Thanks to this collaboration, MediaMarkt is also able to offer its service through a Pay by link solution. Thus, instead of requesting the IBAN on paper, they will be able to do it via Open banking as soon as it is available in Spain, or via SEPA direct debit.

Ultimately, with the help of Adyen, MediaMarkt is now able to significantly improve the quality of data collection for monthly payment policies, increase the collection rate and reduce the churn rate.

The MediaMarkt team believes that Adyen has significantly improved the payment experience for its customers, reducing errors and increasing security. Tokenisation has been a revolutionary change for MediaMarkt, enabling more efficient management of subscriptions and increased customer satisfaction and loyalty.

Some of the major benefits it found in Adyen were: the adoption of a unified strategy and tokenisation, faster data collection and less friction for the customer, who only needs to enter the PIN or use Face ID to pay.

This has led to a dramatic shift in the company's business from 92% SEPA and 8% recurring credit card sales to 92% recurring credit card and 8% SEPA. This transformation improved the bottom line, significantly reducing churn due to non-payment and SEPA chargebacks. The reduction of churn by 1.6% was significant for an annual production of more than 1.4 million policies, with 530,000 of them being paid monthly, considerably increasing the company's revenues.

Adyen’s financial technology platform had a direct impact on MediaMarkt's customer experience, providing a simpler, faster and more secure payment process, as well as tokenisation and other technological advancements that not only help to increase customer confidence in the payment process, but also to grow the business and expand its services. 

The synergy between QSR, Adyen and MediaMarkt has been perfect in the brand's latest project for the integration of tokenisation terminals in the shops, where they have significantly improved both the customer experience and the speed of the collection method capture processes.

In this partnership, QSR has played a crucial role in optimising MediaMarkt's policy, insurance and service management systems, both single-payer and subscription-based. Its innovative technology and solutions have enabled them to significantly improve operational efficiency and the customer experience in their shops. In this success story, technology partner QSR has also been instrumental in achieving the objectives, demonstrating its ability to provide effective and customised solutions.

QSR's ability and speed to adapt their solutions to our specific needs has resulted in a marked improvement in customer flow management and reduced waiting times. In addition, their technical support and willingness to work hand in hand with our team has been second to none.

In short, QSR's expertise and commitment have been key to integrating advanced solutions that improve the customer experience in MediaMarkt's shops. Together with Adyen, QSR has proven to be a technology partner ready to adapt to any situation, contributing to innovation objectives and significantly improving the management of insurance and service contracts, resulting in greater transparency and optimised operational efficiency.

In short, MediaMarkt considers this case to be a success story that has demonstrated how the implementation of advanced technologies, through a partner such as Adyen, can transform payment management and improve both the customer experience and the financial results of the insurance industry. 

Thanks to the work of Adyen and QSR, they have been able to tokenise card collections for future monthly recurring charges via tap to pay, pin code or Face ID. This has allowed them to greatly increase the frictionless collection rate, with simplicity and speed for the shop, avoiding errors in data collection.