Dive Brief:
- Vroom Delivery has partnered with payment processor Finix to create a new online payment solution for convenience retail, the companies announced on Monday.
- The new solution, Pay360, charges fees that are nearly 25% lower than those of legacy payment processors on transactions for age-restricted items, which often cost more because of the potential fraud associated with them.
- Pay360 uses machine learning fraud prevention systems, among other innovations, to reduce the liability associated with selling items like beer or cigarettes, allowing the company to reduce these fees.
Dive Insight:
Vroom has focused its new payment system on some of the most popular categories for c-stores. Cigarettes, beer and malt beverages and other tobacco products were three of the top four merchandise sales categories for convenience retailers in 2022, according to Statista.
In addition to being almost 25% below standard rates from companies like Stripe or Braintree, the new payment solution’s fees are over 40% cheaper than most high-risk processors, according to the release.
Reducing fraud can also cut down on chargebacks, with Pay360 seeing an average chargeback rate of 0.1% according to the announcement.
Age-restricted products have been a tough sell online due to legal regulations and consumers’ pullback on spending due to inflation. Online alcohol sales last year grew just over 6%, according to Statista.
Pay360 is part of Vroom’s Commerce360 initiative, which launched in February. Aside from payments, Commerce360 also includes automated menu management, first- and third-party delivery tech and in-store ordering solutions.
Founded in 2015, Vroom has helped a number of convenience retailers develop their delivery programs, including Huck’s, Urban Value Corner Store and Hutch’s.
