Amazon is growing on-demand services after reporting a 20% sales increase in 2015.
Amazon.com has its own one-touch checkout, one of the reasons it’s No. 1 in mobile. Apple soon will enable one-touch checkout on iPhones. Like these giants, PayPal is leading the way to the future of mobile shopping.
It’s ironic. The smartphone has always been damned (and rightfully so) as the most difficult device on which to complete a purchase. Soon, however, it may become the easiest.
PayPal this week rolled out One Touch, a new mobile payments feature that allows a consumer with a PayPal account that is linked to her mobile device to complete a purchase on that device literally with just one touch, something Amazon.com Inc. mobile customers have been able to do for years.
PayPal One Touch is being rolled out on retail mobile apps first, and soon will be available on mobile and responsive retail web sites. For retailers that accept PayPal, and thus have already incorporated the Braintree software development kit, or SDK, into their apps (Braintree is a mobile payments processor acquired by eBay Inc., which owns PayPal), integrating One Touch takes less than 10 minutes, PayPal says. There are no fees to add One Touch. PayPal continues to charge retailers 2.9% of every purchase plus 30 cents per purchase.
A consumer must have the PayPal app or Venmo person-to-person mobile payments app (also operated by PayPal) on her smartphone or tablet for One Touch to work. During the first One Touch purchase, PayPal authenticates the device user as the PayPal account holder via the app. From there on out, at any retailer that has integrated One Touch, a consumer simply touches the PayPal button at checkout and her purchase is completed using the default shipping and payment information stored by PayPal.
On a related note, Apple in its new iOS 8 mobile operating system has opened up to developers, including retailers, its biometric fingerprint scanner on its iPhone 5s (and soon on its two iPhone 6 models the company will introduce next week). This will allow developers to integrate one-touch log-in and checkout via fingerprint, adding a layer of security to one-touch, since only the person with the matching fingerprint will be able to successfully complete a one-touch transaction on an iPhone.
Braintree launched its one-touch mobile payments system last year, on a small scale. What PayPal has done is juice that system up to the scale of PayPal, which reports having 152 million active user accounts.
“Last holiday season, more than half of online shopping was touched by a mobile device, but only about 15% of consumers completed purchases on mobile devices, and that’s because of the friction involved in mobile checkout,” says Anuj Nayar, senior director of global initiatives at PayPal. “A lot of that friction disappears with the movement to one-touch checkout.”
Going into this holiday season, already more than half of online retail traffic stems from mobile devices, and Apple is debuting two new models of the iPhone, both with bigger screens, which mobile commerce experts say will lead to higher mobile conversion rates. Adding one-touch checkout to that mix could be the recipe for much stronger sales on mobile devices, says Imtiaz Jaffer, head of marketing at Pivotal Labs, which designs, develops and manages software and apps and has built mobile apps for retailers including Best Buy Co., Fanatics Inc., Karmaloop.com, Kay Jewelers, Shopzilla and Weight Watchers International Inc.
“The longer it takes a customer to initiate and complete a purchase, end to end, the more opportunity you give them to abandon the process at any point in between,” Jaffer says. “Payments is one of the more nuanced parts of the process: entering your payment information including card numbers, billing address, security codes, etc., can be cumbersome, depending on the device and the proficiency of the consumer. That said, doing it repeatedly for each transaction is a thing of the past. Retailers have to integrate with leading payment enablers—such as PayPal, Google Wallet, Square Cash, etc.—to drive simplicity and most importantly, 1-click checkout.”
Follow Bill Siwicki, editor of the 2015 Internet Retailer Mobile 500 and managing editor, mobile commerce, at Internet Retailer, at @IRmcommerce.