Mobile Payments: Five Critical Factors for Small/Medium Online Merchants
By Chris Generalis
One out of every three shoppers use a mobile device as part of their purchasing process. And, mobile payments have grown at an incredible 118 percent per year for the last five years! According to Kissmetrics, the most important success factor for mobile commerce is ease of check-out. A fully mobile optimized checkout process will boost your sales significantly.
Millenials and younger generations are more likely than anyone to use mobile checkout options. Yet, a surprising , 88.8 percent of retailers do not offer mobile payment options. The result? A whopping 75 percent of smartphone users abandon sites that are not mobile optimized.
IBM Digital Analytics showed that on Black Friday 2014, mobile traffic accounted for half of online traffic while mobile sales accounted for only 28 percent of total online sales. The study showed that this was, at least in part, due to friction encountered in completing the purchases on mobile devices themselves. Merchants who offer a mobile payment solution that reduces friction will be able to improve conversions and increase revenue.
So, why wouldn’t you add a mobile payment solution to your Magento store?
A few payment solutions out there offer mobile payment options. But how do you select the mobile payment option that is right for you. After extensive research, Minkasu has put together a list of five must-haves for you to consider.
1) Revenue is king.
You want more revenue. That’s obvious. Improving conversions, increasing revenue, and gaining new customers to solicit for repeat purchases will be at the core of your decision making process. Why have a payment option or get a new one if it wouldn’t improve your top line and bottom line?
Despite over a decade of checkout flow optimization, the average rate of online shopping cart abandonment is 68.53 percent. Why? Forgotten passwords, convoluted checkout processes and new user account creation are some of the top reasons.
Eliminating redundant steps and reducing friction in the checkout flow is a critical and proven way of reducing abandonment and increasing conversions. Payment solutions that don’t need users to enter their usernames, passwords or payment information tend to score better over other l means of making payments.
2) Your solution should work across all channels and operating systems
It shouldn’t matter if your customer is on a tablet, phablet, desktop or smartphone. It also shouldn’t matter if he is paying for something in a physical store. It should offer a consistent and streamlined checkout for online, mobile web, mobile apps and physical stores.
The operating system of your device should be irrelevant. To use Apple Pay, you need an iPhone. To use Android Pay, you must have an Android Phone. A great multi-channel payment solution should work across all channels, OSs and devices.
The Pymnts blog aptly summarizes this point: The “winner” of mobile wallet wars has to work across operating systems, shopping channels, browsers and technology platforms.
3) Millennial adoption is key.
Mobile checkout has a huge appeal with the millennial shoppers. Millennials, who’ve grown up (or are still growing up) with mobile devices, tend to research before making a purchase. Most part of research takes place online and on mobile devices.
Interestingly, 80MM millennials in America have an annual buying power of $200 billion. According to the Bureau of Labor Statistics, by 2020, millennials will comprise 46% of United States workforce. Why miss out on this key demographic group?
4) Security challenges are mounting.
Even the largest and best retailers have fallen victim to data breaches. Target, Home Depot, Neiman Marcus, Michaels are just some of them. And, according to credit card industry experts, thanks to more secure payment options in store, fraudsters are focusing their attention on online retail, especially smaller merchants.
Every payment solution out there claims to be secure, but they are not all created equal. Ask yourself:
- Does your payment solution store the credit card numbers?
- Does your payment solution still rely on outdated authentication methods such as usernames and passwords, prone to phishing?
- Or, does it make use of advanced verification technologies like biometrics that are both convenient and secure?
Your payment solution should take the merchants out of the payment path. The card details should not be shared with the merchants. In fact, the most secure solution is the one that does not store your customers’ credit card numbers anywhere or share it with merchants.
Many smartphones now have additional capabilities that add new security layers. Sophisticated technologies like biometrics, tokenization and multi-factor authentication drastically reduce the potential threat of identity theft and fraud.
**5) Better doesn’t have to be harder. **
Implementing your payment solution should be quick and easy. It should be a pure software solution and not require a change to your existing payment infrastructure.
So, considering these five factors, how do your existing payment solutions (or for that matter, any new ones, that you might be considering) stack up? Make sure the mobile payment solution you choose eases the checkout process for your customers instead of complicating it.
Minkasu offers a simple, smart and secure way of accepting mobile payments. The company feels strongly about building merchants’ revenue, taking a multi-channel approach, appealing to millennials, offering superior security and quick implementation. It believes smartphone checkout is not only the future, but also the present. After all, Minkasu keeps the merchant at the heart of all their development efforts.
Chris Generalis is the Vice President of Business Development at Minkasu. Chris has over 15 years of experience in business development, marketing, and product management. He has worked in leadership positions at Magento (eBay), PayPal, Sony Pictures, and Cambridge Technology Partners.*
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