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How Kilo Health unified payments to optimize risk, authorizations & cost

Kilo Health supports over 4 million customers globally, with a collection of health and wellness subscription apps and digital products. Kilo Health's diverse product range and borderless customer community attract multiple market segments, demographics and devices.

Across the company group, there are 10 merchants, all with different setups and underlying payment providers. That's where Vytautas Šernas came in.

Early in 2020, Šernas migrated from product management into a new Head of Payments role to support and optimize payments across the company, and create the best buying experiences for each customer.

"We have such a diverse portfolio of merchants who operate across the whole world, so we have very different user bases," explains Šernas. "We wanted to unify payment operations under one roof from a business and 
partnerships perspective, but also from a technical infrastructure point of view."

Before a centralized payments team was formed, every product manager had to factor in the complexities of payments. Each product team shared common challenges around risk, performance and cost. The centralized team also aimed to build a single, unified integration for all their payments. However, they quickly ran into challenges with traditional payment service providers (PSP).

There wasn't one 'perfect' PSP that could successfully support every customer, across every product, in every region, and Šernas wasn't comfortable with having all the company's eggs in one basket. The payment service providers' merchant-facing support teams also weren't proactive in enabling Kilo Health to drive the best performance.

"The PSPs are not really good at giving advice, because in some cases, there's very little they can do to optimize," says Šernas. "Even if they do, they're not in that mode of advising merchants on what to optimize, how to get better approval rates, what settings to adjust and so on."

Šernas realized he needed to maintain multiple payment providers, but manage them all through a single unified integration. "We wanted to have one single integration for card payments so it's less maintenance, and have all the tokens in one place," he says. "We'd like to route payments depending on business rules—cost, approval rate or risk optimization—which is basically impossible to do if you're using a single provider or multiple providers with different integrations. You can’t do this because they're all still siloed."

It was quickly obvious this wouldn't be easy to build in-house - hurdles like PCI Level-1 compliance certifications would take months, even years to complete. Instead, they started by evaluating different off-the-shelf 'payment orchestrators', but they found their products to not deliver.

"Their sales pitch was misleading," explains Šernas. "When we actually saw the platform 
 and started testing, we saw that essential features are actually missing. Some integrations were not production ready. In general, they're a slower organisation. They do backend releases every few months."

Kilo Health needed to find a modern partner, beyond legacy orchestrators, to help unify their entire payment stack. That’s when they found Primer.

Easy to integrate, easy to use and looks intuitive

Kilo Health chose to partner with Primer to provide their unified infrastructure for payments. "The platform itself is easy to integrate, easy to use and looks intuitive compared to other platforms," explains Šernas.

Kilo Health were quickly able to test out their first use cases and realize their vision for a single payment integration. "Primer created an account really quickly," Šernas adds. "We connected several PSPs, ran our own testing and it looked promising—the core thing was working! We saw great potential, how Primer can learn from us and how we can learn from Primer. It's a good relationship that we can grow together."

Šernas and his team prioritized their use cases for Primer.

To manage risk, the payments team could use Workflows to control how payments are routed from riskier markets and individual customer metadata, like risk scores.

Workflows can also be used to route payments to specific local acquirers. With Primer, Kilo Health could leverage their commercial relationships and volume with all their underlying payment processors—ultimately testing payment volume through a wider range of processors for specific markets.

It's easy to route payments and report on performance within the Primer dashboard.
 Insights from testing informed how the payments team wanted to iterate on their strategy for optimizing payments. "We'd prefer to have control on the Primer side, we provide custom metadata about the customer and order and set the rules in the workflow builder," says Šernas.

Kilo Health use Primer to manage, create and control their checkout experience. Together
 with Workflows, they can manage seamless 3DS experiences. In future, they’re planning to add alternative payment methods to optimize for conversion in different markets. "We'll also go bigger on alternative payment methods, so we have a direct contract with Klarna. We'll onboard new emerging markets to see how they're performing," Šernas adds.

Unlike other payment services he tried, Šernas and his team were able to work closely together with the Customer Success Team at Primer to deliver the solution they needed and shape the roadmap on both sides.

With Primer, Kilo Health have found a platform and partner to unify and optimize their entire payment operation.

Payment optimization is directly impacting the bottom line of Kilo Health's subscription business as they can process more transactions successfully. It's much easier for us to manage risk," says Šernas. "We have a high ROI because 
we can have a higher risk tolerance as we now have the tools to manage
 it, vs. sticking with a single provider where we'd have to reduce our 'risk appetite' due to fewer tools to manage that. So, it's directly impacting our bottom line."

As well as increased payment performance, there's higher people performance. Multiple product and risk teams are now freed up from handling payments or being roadblocked by engineering.

As the product and payments teams look to build out their roadmaps, 
they rely on Primer to continue to deliver a unified payment infrastructure. "I'm happy with Primer and how fast they're moving," says Šernas. "Your core platform is 
well-established and you can move fast. Keeping in mind how many people have been hired and the last investment round—I think it's just getting started."

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