How Apple Pay Will Impact Ecommerce

Last weekend, I blew a tire on a long bike ride. Thankfully, I had a spare tube in the satchel on my bike, but I noticed it was my last one (bad news if you do any long distance biking). So, before I got back on the bike, I pulled out my phone, opened up Safari, and typed in my favorite bike shop’s website.

I found the tubes I needed quickly enough, but the checkout process was beyond painful. I couldn’t remember my log-in and I didn’t have my credit card with me. I took a stab at guessing, but as soon as I got to the shipping and billing steps, I quit. At that point, I’d spent five minutes trying to solve a problem that could also be addressed by simply riding to a different bike shop down the street.

So, that’s exactly what I did. If you’ve ever purchased something through a website that’s not Amazon, you can probably relate.

According to one recent study, lengthy or complicated checkout processes account for 39% of U.S. cart abandonments. And in Adobe’s 2015 Mobile Consumer Report, the company revealed that mobile conversion rates are directly tied to streamlined paths to purchase. Per Adobe: “Conversion should occur within three touch events. Two will be table stakes in the near future.” An Opportunity to Transform the Ecommerce Checkout ExperienceWhile services like PayPal and Google Wallet have removed many barriers in the checkout experience, those services aren’t completely frictionless. You still need accounts to use them. And, to complete a purchase, you’re often redirected to those services to authenticate — adding another step to an already long checkout

Thankfully for ecommerce businesses, help is on the way.

At Apple’s annual developer conference in June, the company announced that Apple Pay would soon be available as a payment method on the web — opening the door for thousands of merchants to offer a more streamlined checkout process and stronger security. Here’s a screenshot from Shopify of what this integration will look like:

inline_ipad_iphoneGiven the ubiquity of the iPhone and the behavioral patterns of Apple users (according to one report, iOS users accounted for 78.3% of all mobile purchases over Thanksgiving in 2015), the announcement alone was newsworthy. But Apple also shared results from several ecommerce businesses whose apps have been thriving on direct integrations with Apple Pay.

Here are two that caught my eye:

  • StubHub customers who use Apple Pay transact 20% more frequently than other users
  • Staples saw an increase in mobile conversion of 109% after implementing Apple Pay

Of course, those are just two examples. And they’re examples of companies that integrated Apple Pay into their apps, not their web experience. Furthermore, Apple Pay on the web will be limited to Apple users with an iPhone 6 who are shopping via Safari, which rules out a significant chunk of the population.

That said, it’s rather safe to assume that conversion metrics via mobile apps will translate to the mobile web experience. And, at a time when mobile ecommerce conversion rates are hovering around a paltry 1.5%, anything that creates experiential lift in the mobile checkout process is good news for ecommerce retailers. What Exactly Will Apple Pay Help Ecommerce Companies Solve?Like PayPal, Apple Pay will feature a “Pay with Apple Pay” button that gives iPhone 6 users on Safari browsers one-click payment capability. Unlike PayPal, however, customers won’t be redirected to an external site for authentication. Instead, their fingerprint will authenticate the purchase and pre-populate shipping and billing fields with information.

Naturally, this creates two key benefits for ecommerce businesses:

  • A faster, cleaner checkout experience. Customers using Apple Pay will no longer need to enter their credit card information or shipping and billing addresses. The tools will provide a true one-click purchasing option.
  • Stronger security throughout the checkout process. Because customers no longer have to enter their credit card information, Apple Pay removes a significant security loophole. It’s no shock that Target — which experienced one of the worst security breaches in history in 2014 — was one of the first brands to sign up for the new functionality.

The argument for integrating Apple Pay really is that simple.

At a time when more and more customers are comfortable buying on the web (and more than 30% of those purchases are happening on mobile devices), it’s critical for ecommerce businesses to optimize every aspect of the shopping experience. Amazon is investing heavily in this and its efforts are very quickly reshaping consumer expectations for every other site.

So, the question is: Will Apple Pay level the playing field?

At the very least, it’ll give ecommerce companies a quick and easy means to fill a very important hole for a very important subset of customers. As Ajay Kapur, CEO of Moovweb, said in an interview with Bloomberg: “Apple Pay for the web is probably the biggest thing in ecommerce technology that I can remember, since ecommerce itself. With a thumbprint, it will be as seamless as buying on Amazon.”


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