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1 Touch Checkout relies on a consumer’s existing payment card.
With all of the attention retailers put on mobile commerce as the number of smartphones and tablets in consumers’ hands continues to rise, one nagging metric haunts them. Mobile commerce conversion rates lag behind e-commerce rates, an average of 1.59% for m-commerce compared with the 3.18% e-commerce average rate, according to the Internet Retailer Mobile 300 and Top 500 guides. One culprit may be the cumbersome requirement to enter a 16-digit payment card number along with billing and shipping addresses.
Mobile commerce company Payfone hopes to change that with its 1 Touch Checkout service, which eliminates the need to type all of those digits and letters.
Payfone is relying on the existing payment infrastructure for this service, and not creating a digital wallet, says Prakash Hariramani, Payfone vice president of products. 1 Touch Checkout is not a separate payment mark, such as Visa or MasterCard, that retailers must find a place for on their m-commerce sites, he says. “We are not disrupting the payment ecosystem,” Hariramani says.
Consumers enroll in the service via participating card issuers, Hariramani says. He would not disclose which banks Payfone is in discussions with. Consumers link their payment card numbers to their mobile phone numbers, he says. When consumers want to pay with 1 Touch Checkout, the system checks Payfone’s database to verify the consumer has a stored payment method. Card issuers can require consumers to enter a code to verify transactions. That identity also contains their billing and shipping addresses.
Consumers can assign multiple payment accounts, including credit and debit cards and checking accounts, he says. Once the account is set up, the consumer can pay with 1 Touch Checkout at participating merchants. This eliminates the need for consumers to enter a credit card number and shipping and billing addresses.
The 1 Touch Checkout payment option is activated when the consumer taps the checkout button on an m-commerce site. A 1 Touch Checkout payment page automatically is presented for the consumer to authorize the transaction, or cancel and choose another payment method.
Merchants sign up for acceptance via companies that already offer mobile payment services, such as CardinalCommerce Corp., which is testing the service with some of its merchants. Hariramani would not say which other companies Payfone is in discussions with.
Currently, CardinalCommerce is testing 1 Touch Checkout with a small group of merchants, but CardinalCommerce expects to use its own direct sales staff and partner companies, such as payment processors and payment gateways, to sell the service, says Tim Sherwin, CardinalCommerce co-founder and executive vice president.
CardinalCommerce has not yet set a price for the service, he says. Its primary payment service is billed as a transaction fee.
Payfone would not say when 1 Touch Checkout will be broadly available. “We want to quantify before and after conversion rates and get more qualitative metrics before we launch a rollout,” Hariramani says.