Will Visa Checkout Plug The Digital Checkout Sales Leak?

Picture a brick-and-mortar store where three out of every four customers that gets in line to checkout soon after changes their mind, drops their products and walks out of the store.

The scenario may be alarming for a merchant to comprehend, but Visa’s SVP of Digital Solutions Sam Shrauger said it’s a conversion reality many merchants face everyday for mobile checkout.

“I think a lot of them have optimized for merchandising but haven’t necessarily optimized to the point that they want to for checkout conversion and there’s a huge amount of leakage in that funnel,” Shrauger explained.

According to Shrauger, many merchants report a 20 to 25 percent conversion rate on mobile, which is considered high for that channel, but noted that if three out of four customers were abandoning the checkout in the physical store, merchants would surely be taking notice.

“That would be an emergency and it ought to be considered an emergency in mobile as well,” he added.

Checkout conversion is such an important benchmark because, as Shrauger explained, not only does it represent a better consumer experience, but if the same conversion rates on mobile and online were seen in-store it would be starting – painting a very clear picture for merchants.

Merchants seem to know they have a lot of work to do in boosting the payment experience on their digital channels, but the real question is how do they get there?

Shrauger says it starts with payment simplification, which was one of the driving forces behind the recently announced enhancements coming to Visa Checkout this spring.

With a focus on revamping the consumer experience by increasingly simplicity and reducing friction in the payment process, the latest updates to Visa Checkout are aimed at ensure that experience is consistent whether a user is shopping in a browser online or making in-app purchases on their mobile device.

Both merchants and consumers can expect to see some big changes coming to Visa Checkout, which were previewed earlier this month including: customized messages and offers, Visa Checkout Lightbox improvements and a simplified sign-up process.

In an effort to keep the user experience both simple and frictionless, Shrauger says Visa Checkout will be able to help streamline checkout based on “remembering” the preferences that consumers have saved.

The new updates will also feature enhancements for the enrollment and sign-up process, such as allowing users to take a photo of a payment card in order to enroll and using Google address APIs to pre-populate information for consumers as they go through the form.

“All these things are things that intended to, whether its a first time experience or a subsequent experience just make it as easy and simple as possible,” Shrauger noted.

Changes are also coming to the Visa Checkout Lightbox that will aim to increase the integration between the Visa Checkout experience and a merchant-owned experience, which will involve bringing more of a merchant’s brand and eCommerce experience into the checkout itself.

But MPD CEO Karen Webster asked whether the introduction of customizable messages and offers will provide merchants with another opportunity to have a touch point or dialogue with their consumers – and quite possibly integrate into the newly launched Visa Commerce Network?

Shrauger explained that while Visa has introduced offer and loyalty capabilities via the Vise Commerce Network, exploring how those two platforms may be able to come together to support a payment experience that benefits both merchants and consumers is something that could come later down the road.

For now, the focus remains on helping merchants sell more effectively in both online and mobile environments, while also ensuring that nothing is done to compromise a merchant’s competitiveness in the market or its ability to serve the customer the way that they want, Shrauger added.

“We’ve said it from day one, the consumer is the merchant’s customer. They’re not our customer. We’re just there to facilitate the commerce transaction,” he said.

With a comScore study showing that Visa Checkout customers are converting at 86 percent rate during online checkouts and Visa’s own data showing mobile checkout conversion numbers are ranging between 75 and 80 percent, it no surprise that the user base of Visa’s platform has reached nearly 11 million customers since its July 2014 launch.

Shrauger attributed the growth in Visa Checkout’s consumer network to a lot of varying factors coming together, including growth in the acceptance side of the network by adding more merchants, marketing, organic adoption and some promotional activities.

The growth of transactions taking place on mobile devices, which is increasing at a rapid rate, has also helped to fuel the number of consumers looking for payment solutions that will help to facilitate these purchases, without bringing friction into the process.

With many merchants struggling to deliver on the mobile payment experience consumers are looking for, there is a huge opportunity to change the checkout experience for both merchants and consumers, particular within the mobile channel.

“Hopefully, if we do our job right, the dialogue that exists now in the industry that says that people shop on mobile but they don’t buy on mobile will be a thing of the past,” Shrauger.