“Frictionless” may turn out to be 2015’s payments and commerce word of the year.
It’s the word that merchants use to describe the user experience they seek for their customers online. And, not surprisingly, it’s how innovators describe what their mobile payments and commerce solutions will deliver.
But where the rubber meets the road is understanding where the sources of friction are for those online consumers, and how much it really costs merchants when they fail to deliver a “frictionless” experience.
And, when they fail to do that in the digital domain that most users describe as their “essential” commerce tool: the mobile device.
That’s both the inspiration and the mission for BlueSnap’s Powered Buy platform, something that it describes as the next-generation global payment gateway that makes mobile checkout frictionless for consumers and integration to its platform simple for online merchants.
BlueSnap CEO Ralph Dangelmaier tells MPD CEO Karen Webster that BlueSnap’s work with merchants over the years has uncovered what he calls a “payments conversion” problem that can cost an online merchant as much as 40 percent of their sales when customers encounter friction at checkout and abandon their virtual carts.
BlueSnap has the data to back this up.
When shoppers can’t use their preferred checkout method, whether that’s PayPal, MasterPass or Visa Checkout or local payment schemes such as China’s Alipay or Brazil’s Boleto, they abandon those virtual carts 30 percent of the time. Sometimes abandonment isn’t even the consumer’s doing: Payments are declined if a merchant isn’t connected to multiple acquiring banks, something that’s increasingly important as more buyers engage in cross-border eCommerce but not limited to just cross-border transactions.
But the biggest issue, Dangelmaier says, is that most merchants don’t even know that they have a payments conversion problem — yet they suffer from its symptoms daily.
“Most merchants don’t recognize that they have a problem, because they don’t have the data to help them fully grasp just how serious it is,” Dangelmaier explains. “They see unexplained and above average decline rates for website visitors, abandoned shopping carts, and/or high bounce rates when shoppers land on their sites and immediately leave. But most of the time, they assume that the problem is related to how their product is priced, or what merchandise they carry. That’s wrong most of the time. Most of the time, what they really have is a payments conversion problem. ”
A payments conversion problem that Dangelmaier says unfortunately prevents these online merchants from turning their global, mobile shoppers into buyers and customers for life.
BlueSnap’s Powered Buy Platform provides flexible integration to a checkout experience that helps merchants get those customers checking out. Powered Buy offers merchants access to APIs or a turnkey embedded checkout page. It has something it calls a “smart payments gateway” that has acquiring connections to multiple local banks around the world through a single integration that also includes failover to maximize payment authorizations. The Powered Buy Platform also offers value-added features that merchants find critical for engaged and secure eCommerce such as offers and coupons, subscription billing, fraud prevention, and chargeback management.
The Powered Buy Platform has garnered support from the world’s two largest payments networks, MasterCard and Visa, who share BlueSnap’s commitment to a frictionless digital shopping and buying experience for merchants and consumers. Dangelmaier tells Webster that they are each funding the integration of their digital “buy buttons” into the Powered Buy Platform.
BlueSnap made the decision to launch its Powered Buy Platform on Cyber Monday, one of the busiest online shopping days all year, in order to draw attention to the “payments conversion problem” that is the Powered Buy platform’s raison d’etre. Dangelmaier says that merchants stand to lose as much as 40 percent of their sales today if their online experience isn’t smooth — a reality underscored by NRF’s projections that of the 60 percent of the $93 billion of online sales that will happen this holiday season will originate via the mobile device. That could mean as much as $22 billion in payments conversion leakage.
BlueSnap’s commitment to reducing this conversion problem for merchants is also at the core of the newly launched Checkout Conversion Index (CCI), which will benchmark quarterly how well merchants are optimizing their mobile checkout experience. Done in collaboration with PYMNTS.com, the first CCI report analyzes more than 650 online sites across 14 physical and digital merchant categories representing 70 percent of the eCommerce market. The initial Index reports that, overall, merchants are performing only marginally better than average, with an Index score this quarter of 62.
“Payments is about the last thing that online merchants want to think about – their first, second and third priorities are to get customers to visit their virtual storefronts and buy from them,” says Dangelmaier. “But mobile-toting consumers are now forcing merchants to focus on the role that payments, and payments conversions, now play in delivering those priorities.”
Dangelmaier and BlueSnap, with Powered Buy, hope that they can not only help retailers understand that they have a payments conversion problem, but also make it one that they won’t have to suffer from much longer.