Mobile payments conversion is one of the hottest topics linked to the incredibly fast-growing mobile commerce area, and one of the most challenged. Skyrocketing smartphone adoption rates and more accessible public broadband contribute to mobile commerce growth all over the world. As consumers depend more and more on their mobile devices, mcommerce encompasses an even larger part of ecommerce. With ecommerce expected to reach over $278 billion by 2015, the mobile payments sector is heating up as well, offering ecommerce companies a massive opportunity to further fuel their business development. But, optimizing for multiple geographies, browsers, devices, and connectivity is a challenge for most online merchants.
We notice that most retailers are still struggling to offer a unified shopping experience and most mobile-payment platforms still require too many steps to check out or lack user-friendly payment models. Shopping on mobile devices makes consumers feel frustrated, leading to high mobile shopping-cart abandonment rates. There is a stronger need, therefore, to understand both business and consumer requirements for mobile payments to grow a merchant’s future business.
I have highlighted below three of the main challenges of obtaining higher mobile payments conversion rates.
To prevent fraud on the usual desktop websites, we use 3D-Secure as payment option. This option will not work well on mobile because the majority of mobile payments are initiated in-app. Also, consumers prefer to remain in the same app when paying, instead of being redirected to a different page to fill in their passwords and details as with 3D-Secure. When it happens, consumers feel less secure entering credit card information on mobile devices. This deteriorates the customer experience and increases shopping cart abandonment rate.
The V.me initiative that Visa launched in late 2011 is a similar example and it is also one of the reasons why VISA INC. has put all its efforts into creating VISA Checkout solution; an in-app payment button enabling the consumer to check out with VISA directly from the merchant’s app or web page, keeping them inside the app to fill in their transaction details. Google has also promised a 3-screen process for first-time purchases to set up the necessary details and a 2-click purchase process thereafter.
In order to solve the fraud-related challenge and get higher mobile payments conversion rates, providers need to rethink their payment solutions and align them more to the VISA Checkout example and not to the old solutions that require redirection to a different browser.
25% of all online purchases now take place on a mobile device. Therefore, offering a poor user experience can be critical to a merchant’s success or failure. Whether the strategy is an app or a responsive website, merchants need to ensure their customers can make quick and easy payments on any device. As the mobile payments space is still pretty new, we all have to learn from the best experiences that exist on the market, such as UBER. Customers prefer a seamless, cross-channel shopping experience.
Research showed that customers are 10% more likely to complete a purchase if a digital wallet payment option such as Apple Pay, Android Pay, or PayPal is available. Thus, mobile conversion rates are expected to grow as mobile wallets become more familiar.
In the video, I am referring to the iDEAL case-study in The Netherlands that shows interesting insight into the mobile payments market. As we know, the Dutch ecommerce payments market is mainly based on alternative payments, and iDEAL is at the forefront with 80% market share. But, the mobile experience offered by iDEAL to its consumers is less exciting than the traditional ecommerce website one, hence we see other payment options coming forward; wallets like Apple Pay, Android Pay, or PayPal, which together with credit cards dominate mobile payments, even in the Netherlands.
Even though we have to create fraud-proof, user-friendly payment solutions that are as seamlessly designed as UBER, we still must try to be innovative; coming up with ingenious ideas that will enhance consumers’ mobile experience will enrich their lives. Probably, the innovation will stem from the payment service provider’s side or from the current fraud management companies and startups in the market, as they will design innovative solutions to reduce fraud while also offering a good customer experience. A lot of the innovation has come from the Silicon Valley area, where FinTech is one of the hottest subjects and with fraud as a major part of FinTech.
With all these points in mind, in order to optimize the mobile payment experience, the best thing merchants and payment service providers can do is to look at the market trends and balance fraud issues with mobile payments conversion and with the in-app experience. Delivering a consistent online experience, whether consumers are viewing the site from a desktop or mobile device, is no longer a luxury, it’s a prerequisite of today’s highly active consumers.