Far from decided, the wallet wars continue to redefine the ways consumers pay. The first wallets were developed by technology companies – Android Pay, Apple Pay, Samsung Pay, Softcard, and CurrentC. More recently, banks and merchants have entered the fray with their own branded wallet applications (WalMart, Chase, and Capital One to name a few examples).
Many of these providers have clearly set their sights on payments made at brick and mortar retailers, a market which totals hundreds of billions of dollars. Some have included or have plans to include eCommerce functionality, but collectively have prioritized the larger brick and mortar retail market over the much faster growing eCommerce market.
But What About the Wallet Wars for eCommerce?
Relatively little attention has been given to the applications that streamline the eCommerce checkout process. Let’s Talk Payments recently published a thoughtful comparison of the wallet wars by featuring three such wallets – PayPal, MasterCard MasterPass, and Visa Checkout. The LTP article had a global angle, but for the U.S. market, Amex Express Checkout is another noteworthy solution.
At a high level, all of these applications have a similar design that allows shoppers to complete a purchase without ever entering their billing or shipping information. Shoppers only need to know the password for their wallet account. And for Amex Express Checkout, this is the same password the cardholder uses to access their online account. For fairly simple concept, these applications can produce dramatic improvements in payment conversion rates. The Amex Express Checkout website claims a 20% lift and PYMNTS.com has reported a 51% lift attributable to Visa Checkout. Moreover, you can bet that the conversion lift is even greater for merchants that sell on mobile where checkout abandonment is notoriously high. With such impressive results, it’s not surprising to see several national merchants including WalMart, Walgreens, and Starbucks adding support for these wallets.
On the surface, these eCommerce wallets appear to be very similar products. Shoppers authenticate directly with the wallet provider and the merchant uses the information from the wallet to auto-fill the forms on their checkout pages – a fairly straightforward concept. However, merchants that choose to integrate with these solutions will find (perhaps unsurprisingly) that these are different products designed by different companies. Distinctions will become clear when merchants ask questions such as:
What countries are supported?
What card types are supported?
How does the solution use tokenization?
What cardholder info is provided to the merchant?
What information is visible to the shopper within the wallet?
How can the merchant use the cardholder information they receive?
What updates does the provider expect to receive from the merchant after the transaction is completed?
Is the transaction initiated from within the wallet or on the merchant’s checkout page?
Just as support for multiple card brands and payment types has proven critical for maximizing conversion in the desktop era, support for a variety of wallets is necessary for maximizing payment conversions in the mobile era. Merchants should carefully consider the nuances of each product to determine the best path for integration. And as more products come to market, it will become increasingly important and challenging for merchants to organize their checkout options in a way that is easy for shoppers to understand.
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