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entrepreneurial-success-creates-domino-effect

Entrepreneurial success creates a domino effect

In the last couple of decades, the world has seen an explosion of creative entrepreneurs come up with innovative business solutions, but few entrepreneurs have transformed the way the world does business online like Elon Musk and Lou Montulli.

Elon Musk kick-started global ecommerce trust with Paypal

In the world of ecommerce, you could have the greatest payment system in the world but unless people trust it, they’re not going to use it.

People expect online merchants to use the best methods to keep their personal information safe and protected from data breaches, like the one Target experienced in 2013 that affected 70 million people.

While data breaches can pose a real threat to ecommerce security, so can psychological barriers.

The psychology of trusting online payment systems

In 1999, Peter Harvey was working for a direct marketing music club in South Africa when he developed PayGate as a global payment service provider to make it easier for online merchants to get paid.

For over fifteen years PayGate provided South African merchants with a secure, trusted way to receive payments from their customers. However, he discovered one problem. While merchants were selling globally accessible goods and services, he realised from a psychological standpoint that people in the US or Europe might not feel comfortable sending their credit card details through a payment system based in South Africa.

This psychological barrier led Harvey to partner with Paypal in 2014, allowing merchants to add Paypal as a more familiar payment option to their checkout process.

Malvina Goldfeld, the head of business development for sub-Saharan Africa, told IT News Africa, “according to research conducted by NorthStar in late 2013, 37% of European buyers said they would not have made cross-border purchases if PayPal had not been offered as a payment method.”

Sometimes trust is a matter of perception

Although Paypal has its flaws – like a difficult developer platform, high costs for merchants, and some known security issues – it’s familiar worldwide, making it a trusted payment processor.

By establishing itself as a globally trusted brand, Paypal has successfully connected merchants to formerly unreachable global markets.

More than just a payment system

When Elon Musk created Paypal, he didn’t just create an online payment system. Plenty of companies have done the same. Today, they’re a dime a dozen. Musk did something far grander: he leveraged the reputation of his brand to bridge an enormous trust gap between buyers and sellers worldwide, bringing merchants and buyers together through a globally trusted brand.

Paypal has widened South Africa’s ecommerce reach

Statistics show that ecommerce in SA grows at a rate of 25 to 35 percent every year. With over one million Paypal merchants in SA, it’s clear that having a globally recognised payment system makes a difference in reaching worldwide markets.

But even Paypal wouldn’t be what it is today without the genius mind of Lou Montulli—the first person to integrate cookies into a web browser.

Cookies rule the world of ecommerce

In 1991, Lou Montulli created one of the first web browsers he called Lynx. A few years later, Lynx became Netscape—one of the most well-known browsers in history.

While the concept of a cookie already existed in the programming world, Montulli was the first to integrate it into a web browser.

In computer science jargon, a “magic cookie” is a piece of data that programs pass around that allows the recipient to perform a specific operation. Montulli quickly realised that if a browser could store a text file on the user’s computer, it could use that data to remember user preferences, keep them logged in, and remember shopping cart content.

Cookies made shopping carts better

In the past, most shopping carts would time out after about fifteen minutes of inactivity, emptying the contents and frustrating users. Extending the timeout period wasn’t a good solution because it would put a huge strain on the server’s memory resources.

To solve this problem, shopping carts began using cookies to keep track of a visitor’s cart across browser sessions. These carts became known as “perpetual shopping carts” and are used by almost every major online retailer, including Amazon. Most perpetual shopping carts will save items forever—or until the user deletes their cookies.

Cookies are responsible for increased conversions

According to Marketing Sherpa, 64 percent of internet retailers say perpetual shopping carts increase conversion rates. This is because most people like to add items to their cart and then think for a while before making their purchase. Being able to come back to their shopping cart when they’re ready makes it easy for them remove any items they don’t want and check out without having to start over.

Cookies and Paypal are just two examples of innovative solutions that make online shopping easier for people across the world. And as the global needs of society grow, we can count on seeing more innovation from entrepreneurs, creating new solutions for making ecommerce even easier.

Feature image: Phillip Taylor via Flickr.

Author Bio

Larry Alton
Larry Alton is a professional blogger, writer and researcher who contributes to a number of reputable online media outlets and news sources. A graduate of Iowa Sate University, he's now a full-time freelance writer and business consultant. Currently, Larry writes for Entrepreneur.com, HuffingtonPost.com, and Business.com, among others. In addition... More