It can be too bothersome for consumers to store and regularly update their payment credentials on myriad sites and apps.
Reducing friction in shoppers’ online experiences may be the most important goal for eCommerce retailers and marketplaces. This aim is especially critical when it comes to the all-important checkout phase. Previous PYMNTS’ research has found that 55% of consumers are willing to quit a purchase mid-checkout if the process is painful enough. Friction during an eCommerce shopping experience can include a lack of payment choice, incorrect or unavailable inventory status and free shipping minimums. Further findings suggest that friction-free checkout can increase the likelihood of customer loyalty.
Currently, multiple solutions are available to tackle this issue. One promising tool to solve the pain point of consumers manually entering their payment details across multiple merchants instead of storing this sensitive information due to fraud or other concerns is the credentials vault.
A credentials vault, simply put, is a secure platform hosted by a financial institution or another trusted provider that both aggregates payments and stores credentials. To provide a more seamless online consumer experience, a vault also automatically updates payment information shared with merchants when consumers change or update their payment methods. Practically speaking, this means that when a consumer receives a new credit or debit card, they only need to update a single platform instead of every merchant they choose to store their information with. Credentials vaults have the added value of encrypting payment information, furnishing an extra layer of security protecting both consumer and merchant.
Fortunately for eCommerce retailers and marketplaces, the PYMNTS/FIS collaboration, “Payments and Credentials Vault: The Trust Factor,” finds that a sizable portion of surveyed consumers are very or extremely likely to allow select merchants to access their payment information through a credentials vault.
Across merchant categories, there is broad consumer interest in sharing their payment and other sensitive information through a securely hosted credentials vault. Digging into this willingness by age demographic, 62% of bridge millennials and 59% of millennials are very likely to let marketplaces access their information through vaults compared to 35% of baby boomers and seniors.
While no one credentials vault yet enjoys widespread consumer adoption, PayPal has been testing similar solutions, and because the company tends to be a leader in consumer goodwill, this innovation may be just around the corner. Online merchants may consider implementing the payment optimization tool when it becomes widely available.
A credentials vault has the potential to save consumers wasted time and possible declined payments through manual error, leading to increased loyalty. With the added bonus of increased fraud protection, implementing this solution seems like a winner for consumer-facing businesses in the eCommerce sector.