eCommerce Touch Payments: Are There Drawbacks?
We can all relate to the frustrations eCommerce shoppers have when trying to purchase something on a mobile site. It’s easy to see first hand why complications with the checkout process remains a significant reason for mobile cart abandonment, which is upwards of 97%. While holding their phones in their hands and working their thumbs, the first time mobile buyer often has to deal with things like entering their name, email, phone number, shipping and billing addresses, and credit cards (always fun to have those out in public). The returning buyer “only” has to remember their username and password, but regardless, all of this is a pain in the rear-end, even on a normal sized keyboard.
Enter “touch payments”, where mobile eCommerce shoppers can bypass the registration process and pay with their thumbprint (or a couple taps) through a third party that already has their billing and shipping information stored. That third party is either through the device’s operating system (Apple Pay for iOS, Google Wallet for Android) or a service like “Paypal Touch” or “Pay with Amazon”.
The prospects of raising conversions by making checkout ridiculously simple for the mobile shopper through touch payments pretty much outweigh any reasons not to do it. But there are a few considerations that retailers should keep in mind.
Trust. As a retailer, how comfortable are you with handing over key customer data to a third party? In the case of Paypal, Apple, and Google the answer might be simple as these businesses have a proven track record of protecting data and are generally not considered threatening to most retailers. But Amazon could be a little trickier. Many retailers see that company as a direct competitor. Amazon has firmly stated though that their payments business is completely separated from the eCommerce side of the company. And in an interview with re/code, Amazon’s head of external payments had a good point: “What do you think would happen to that business the instant we became even within a mile of breaching the trust of those merchants?”
Fees. By adding a touch payment option to their sites, retailers will be bypassing their existing payment gateways and will be subject to the touch payment provider’s fees. Luckily for now, “Pay with Amazon” and “Paypal Touch” are in line with the industry norm of 30 cents plus 2.9% of each transaction. New players entering the game could eventually work to the retailer’s advantage. It will be interesting to see how standard payment gateways try to compete.
Finally, by not requiring registration for purchases, retailers have a limited view of shopper data and their behavior. It’s a serious consideration. Especially when you think about how you market to loyal, paying customers. But as touch payments continue to take off, technology will innovate around the lack of necessity for shoppers to log in.
Touch payments may very well be the future. But retailers shouldn’t be worried about sacrificing too much in exchange.