A Guide to Mobile Payments in Ecommerce

According to research by Salesforce, the total number of worldwide mobile purchases was equal to the number of desktop purchases in the first quarter of 2019.

Desktop and mobile accounted for 46% each of total online orders. Similar stats apply to the US market.

What’s more, mobile commerce traffic now exceeds desktop traffic, with 53% of visits to online stores occurring on a mobile device.

And while mobile revenue still lags behind desktop, the gap is narrowing year on year.

Mobile accounts for 53% of retail traffic but only 32% of revenue. (Source)
More than ever, retailers need to create immersive, engaging mobile experiences without any obstacles to purchase. And payments are a big part of the mobile puzzle.

In this post, we’re going to dig into the topic of mobile payments in ecommerce. We’ll define key terms, explore the main benefits of various payment methods, and look at how you can optimize your store for success.

What will you find in this article?

What Are Mobile Payments?
Why Are Mobile Payments Important in Ecommerce?
Are Mobile Payments Secure?
How to Prepare Your Store for Mobile Payments
Conclusion

Sounds good? Let’s dig in.

What Are Mobile Payments?

So just what are mobile payments? The simple answer to this question is that mobile payment is any form of payment made through a mobile device.

Typically, customers entered their credit or debit card details into an online form during checkout. This was the most common form of mobile payment, but other methods are growing in popularity.

In 2018, credit cards were the most popular mobile payment method. (Source)
Here are the main types to be aware of from an ecommerce perspective:

• “Traditional” form payments – This is when a customer enters debit or credit card details into a form through a browser. Usually, stores allow customers to save their information to check out more quickly in the future. Form payments are made possible through gateways like Stripe and Authorize.net.
• Mobile wallets – Mobile apps like Google Pay and Apple Pay enable users to save their card details on their phones. Some stores allow customers to pay using mobile wallets, removing the need to re-enter their details. Mobile wallets can now also be used in many brick-and-mortar stores instead of cards. NPC (near field communication) technology, which is built into most modern smartphones, allows customers to pay at terminals.
• Popular online “wallets”– Payment services like PayPal allow users to save their details with a third party. They simply have to log in to their account process payment. Many users prefer this method because of increased security.

The world of mobile payments is continuously changing, but the options described above paint a fairly comprehensive picture.

Why Are Mobile Payments Important in Ecommerce?

Many retailers wonder if it’s necessary to offer different types of mobile payment options, over and above “traditional” debit or credit card forms.

So why are mobile payments important in ecommerce?

Here’s a roundup of the main reasons for both retailers and customers:

• Mobile sales are growing every year. It’s essential for retailers to offer a variety of payment options if they want to cater to the broadest possible audience and set of buyer preferences. What’s more, mobile payments are particularly popular among Millennials and Generation Xers, key target demographics for retailers.
• Offering mobile payment options removes security issues for many customers. Concerns about debit/credit card security are among the biggest contributors to cart abandonment. Offering customers the opportunity to check out without handing over any details, via a trusted brand like Google or Apple, immediately solves this issue.
• Streamlined mobile payment options remove friction during checkout, thus boosting conversions. Customers can check out without the need to spend extra minutes inputting details.

The volume of mobile payments is increasing every year. (Source)

• Some mobile payment methods reduce the chance of fraud for retailers. Because all buyers are vetted before they can use e-wallets or third-party gateways like PayPal, there is less chance of false payments.
• Better customer experience increases overall customer satisfaction and directly customer retention as a result. After all, happy customers are much more likely to return to your store. Give customers multiple options to ensure satisfaction.

Offering a variety of mobile ecommerce payments has virtually no risks and many benefits. What’s more, the technical dimension of offering multiple payment options is relatively straightforward.

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Are Mobile Payments Secure?

So are mobile payments secure? In a word, yes.

There are multiple technologies, like encryption, SSL, and PCI DDS, that make mobile payments secure, often more secure than traditional card payments.

Here’s a rundown of the main reasons mobile wallets are secure:

• It’s harder for hackers to steal data because no data is transferred to the merchant.
• Customers can monitor their account via the mobile wallet app.
• Third-party gateways, like Paypal, require customers to log in before authorizing payment.
• Most online payment methods follow strict security standards and authentication processes.

Popular mobile payment methods, particularly e-wallets and third-party gateways, are fully secure and adhere to strict regulations.

How to Prepare Your Store for Mobile Payments

Now that you have an overview of the basics, how can you go about optimizing your store for mobile payments?

First of all, you’ll need to cover the basics: you’ll need to sign up for a merchant account and payment gateway. Most ecommerce platforms come with built-in payment gateways.

A merchant account is an intermediary account used to hold funds from ecommerce sales before they’re transferred to your regular account. Generally speaking, most payment gateways will provide a merchant account, allowing you to accept payments through a variety of methods.

A payment gateway is a digital “gateway” that sends customer details to a payment processor, which in turn contacts the bank to authorize the payment and deposit it in your account. When selecting a payment gateway, ensure access to an API is provided so you can make custom changes to your storefront.

Adding extra payment options to your checkout process is usually a straightforward process.

Here are five important tips to keep in mind:

1. Accept Popular Mobile Wallets

When you offer customers the option to pay using mobile wallets, they can use details already saved on their phones.

This removes the need to enter credit/debit card information during checkout, thus streamlining the whole process while providing customers with peace of mind around security.

Mobile wallets are becoming very popular with mobile shoppers. (Source)

Here are some of the most popular mobile wallets:

• Apple Pay
• Google Pay
• Amazon pay
• Venmo
• Zelle
• Alipay
• Square Cash
• Samsung Pay
• eWallet

Adding mobile wallet options is relatively straightforward with the use of an API. It’s also often possible to integrate mobile wallets into your existing payment gateway. It might be worth considering using a gateway that comes with mobile wallet options out-of-the-box.

2. Simplify Checkout Forms

Long-winded and complex mobile checkout forms are one of the biggest contributors to checkout abandonment.

It’s particularly important to simplify mobile checkout forms because users are often short on time and doing something else like watching TV.

Here are some quick tips to keep in mind:

• Don’t make customers sign up for an account to checkout.
• Only include necessary form fields.
• Use real-time validation for form entries (with either a small green tick or red cross).
• Show advice about how to correct mistakes under the form field.
• Only display one field per line (don’t include two fields next to each other).
• Clearly mark optional and mandatory fields.

Check out this article for more tips about how to optimize your mobile user experience: 23 Proven Ways to Reduce Cart Abandonment: Checkout Optimization Guide.

3. Reduce the Number of Steps in Payment

One of the big problems with mobile shopping is that customers tend to be much less engaged than when they’re using a desktop computer. People shop on their mobiles while commuting, watching TV, waiting in line, and so on.

Because of this, it’s easy for mobile shoppers to “drop off” during checkout. One way of radically simplifying the checkout process, especially on mobile, is by reducing the steps required to complete a purchase for customers that are logged into their account. Is it possible, for example, to finish checkout in two or three steps?

Amazon 1-Click has been a significant success
Amazon’s one-click purchase option has been a huge success. The patent is reportedly worth billions.

4. Offer Multiple Third-Party and “Traditional” Payment Options

Along with mobile wallets, customers may wish to pay with third-party “online accounts” like PayPal, Skrill, or Neteller. Offer these options to customers on the order confirmation page.

Alternatively, customers may want to pay directly via bank transfer or check. In some countries, large groups of people still prefer to pay with these “older” methods. Also, display a phone number for users that would like to contact you directly to organize a bank transfer.

While these methods will account for a relatively small proportion of customers, there’s nothing to lose by including them on your site.

5. Account for Differences Between Countries

If you sell on, or are looking to enter, international markets, it’s essential to account for different buyer preferences and habits. ELV (a method which utilizes an intermediary service between the store and the customer bank account) is very popular in Germany, for example.

Different countries have unique payment preferences. (Source)
Research which payment methods are most popular in the countries that you are targeting and make sure that you offer them to customers. Some places, like China, have a completely unique set of payment apps and gateways compared to European and Western countries.

Cards are the most popular online payment method in the US and Canada. (Source)

Conclusion

Offering multiple mobile payment options has tangible benefits: lower checkout abandonment, happier customers, and higher levels of security.

And while navigating the fast-changing world of mobile payments can seem difficult, the reality is that adding new options to your checkout process is a relatively straightforward task. Don’t be put off by the technological hurdle.

As mobile sales continue to grow and outrank desktop sales, it’s essential for retailers to take a mobile-centric approach to ecommerce, optimizing the whole customer journey, including checkout.

By offering a range of mobile payments, you’ll cater to the broadest possible set of customer preferences. And that means more conversions, sales, and revenue.

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