GoDaddy teams with Early Warning to shape its payments strategy

Bloomberg

GoDaddy, which has its roots in web hosting and domain registration, is in the midst of expanding its point of sale capabilities — and partnering with Early Warning, the company behind the Zelle network, to expand online payments for business clients. 

GoDaddy is battling in the market for payment facilitators, or firms that manage payment options for business, facing competitors as varied as Salseforce, Stripe, Square and traditional merchant acquiring banks. Its partnership with Early Warning will integrate EWS's Paze digital wallet into online customer checkouts. 

These companies are selling to merchants in an environment in which individual channels aren't as siloed as they were in the early days of e-commerce. At least half of Gen Z and millennial consumers have made electronic P2P transfers and used a digital wallet for an in-store payment or online purchase in the past year, according to research from Arizent, American Banker's publisher. A third of boomers have used a P2P service and a digital wallet for online purchases, and 10% have used a digital wallet to pay in stores, Arizent reports. That suggests merchants may lose business if they can't reach shoppers both in person and online.

"Being in stores is critical for online businesses. People still shop in stores," said Kasturi Nina Mudulodu, vice president of product management at GoDaddy. "And it's not any different for brick-and-mortar stores. Even if you sell donuts at a shop you have to know how many you sold, your inventory, what to charge, and when to order more supplies." 

GoDaddy's partnerships in payments

GoDaddy has added several more features to its point-of-sale terminal since the product launched in September 2021. 

Merchants can now access data on sales, tips, sales tax, discounts and deposits via a dashboard. The dashboard tracks orders placed online for in-store pickup and measures inventory in real time. GoDaddy has developed technology to ease integration with third party loyalty and marketing programs, and has added internal tools to manage employee schedules. 

GoDaddy is additionally in pilot testing visual product catalogs, and the use of product images at the point of sale to ease consumer self-checkout, with deployment scheduled for later this fall. Enhanced web search, recommendations and "favorites" lists for consumers will also roll out before the end of the year. 

"We want to be considered a single shop for small businesses as they think of all that they need, from having a domain to supporting payments to having a whole suite of e-commerce products," Mudulodu said. "For the donut example … would you like to know the number of glazed donuts you sold versus other types, or how many soft drinks? And how to configure your product catalog or supply chain based on that information?"

These new features follow an update GoDaddy introduced about a year ago to make it easier for sellers to use the WordPress content management system and WooCommerce's open-source e-commerce technology to build a digital store. This fall's updates give GoDaddy a product menu similar to Square, PayPal and Shopify, and puts it in competition with Stripe, among others.  

"Competing now means offering omnichannel solutions for small businesses," Mudulodu said. 

As a result of GoDaddy's integration with Early Warning, consumers using Paze can skip manual card entry and pay without creating new user names or passwords. Early Warning, a bank-owned firm, is testing Paze with employees from Bank of America, JPMorgan Chase and other large banks. 

Paze is also working with GoDaddy to sign up merchants for testing. If fully deployed, the Paze/GoDaddy collaboration could cover more than 150 million debit and credit card accounts. 

Digital wallets have tried to solve the convenience and security challenges facing e-commerce, with some success, said James Anderson, managing director of Paze, in an email. 

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"Guest checkout can lead to manual mistakes, abandoned carts and lost sales," said Anderson.

Paze will not charge added fees to consumers beyond existing debit or credit card fees, and will not charge added fees for merchants or resellers who distribute the Paze wallet to merchants, Anderson said. GoDaddy's fees vary, but it normally charges about 2.3% per transaction at its point-of-sale terminal. 

Bricks and clicks

Other payment firms are bolstering their ability to compete both online and in-store.

Stripe, which has traditionally focused on enabling digital payments for small businesses, has added support for both iOS and Android's Tap to Pay, which enables staffers at stores to use their own devices to accept payments without adding new hardware. Tap to Pay is considered a low-cost way to enable small businesses to accept card payments, and allows Stripe to broaden the work it does for existing clients, or to add clients outside of e-commerce. 

Dutch payment processor Adyen in the past year has added upgraded point of sale hardware, expanded support for Tap to Pay and upgraded online payment tools. Shopify has added a mobile device called POS Go that expands the company's mobile point of sale, adding more data and links to merchant services. Revolut, a U.K.-based fintech that has its roots in mobile payments, has added in-store payments technology as part of an initiative to build a financial super app that supports most of the services that can be found at a traditional bank. 

Square and PayPal both offer in-store and e-commerce payment processing and access to financial products such as short-term credit. Bank technology vendors such as FIS and Fiserv offer payment processing and bank technology that's designed for stores and online shopping. 

GoDaddy can compete in this market by offering services at the initial stage of setting up an online business, according to Enrico Camerinelli, a strategic advisor at Datos Insights. "The creation of the web domain is the first step of the e-commerce journey."

And by integrating with physical stores, GoDaddy can cover consumer experiences that start in one channel and finish in another, Camerinelli said.

"GoDaddy aims to provide a seamless and convenient shopping experience for both merchants and consumers," Camerinelli said, arguing that lifecycle banking is the future of embedded banking, or the act of using enrolled payment or banking credentials to offer a variety of services through a single relationship.