2024 Global Digital Shopping index

Guest Checkout Gets One-Click Boost

The last mile of commerce — specifically, what might be thought of as the last few feet of digital commerce — remains the checkout.

For guest checkout, among the most popular options, one click functionality may give rise to repeat business, and over time, even stronger customer loyalty.

Recent announcements from the likes of PayPal underscore both the appeal of guest checkout and some of the frictions that have been inherent in the process itself.

As noted here last week, PayPal’s “reimagined checkout experience” enables one-click guest checkouts through its new Fastlane offering. The company has noted that because it can recognize 70% of guests who are PayPal users or shop at the platform’s merchants, reducing guest checkout times by 40%.

PYMNTS Intelligence found last year that 55% of customers who stored payment credentials experienced friction that stopped their payments, such as expired or stolen cards. That implies a significant percentage of consumers opt not to store their credentials, and by extension embrace guest options. That information builds on our research at the height of the pandemic, when we found that guest checkouts were the most common way consumers paid online.

Nearly three quarters of eCommerce shoppers opted to pay by manually entering their credit or debit card information via guest checkout. More than a third of consumers surveyed said it was the “most used” option, far outpacing the roughly 13% who had said that leaving a card on file was their “most used” option. Roughly half of those who said they’d opted for guest checkout said they’d done so because they viewed the “guest” function as both “easy” and “convenient” to use, with 36% stating that there was less risk of fraud.

Checkouts Determine Sales

More recently we found that a full two-thirds of consumers surveyed said that the checkout experience can be “very or extremely” influential when it comes to deciding on whether to shop with a merchant again. As many as 70% of shopping carts are abandoned online due to less-than-optimal checkout processes, so the impact to merchants’ conversions and thus sales can be significant.

Small wonder, then, that PayPal and others have sought to streamline, and indeed, bring one-click functionality to the forefront.

Late last year, Paytm said it had launched its alternative ID-based checkout solution. The solution enables customers to check out without saving card details on a site, bypassing account creation and substituting alternative identifiers for card-related data.

We’ll may get more details on how Mastercard’s own efforts at guest checkout, through Click to Pay, are faring when the company reports earnings this week. But as noted during the company’s second quarter earnings call, Click to Pay transactions were up 70% year over year.