Online Payments and Their Effect on Mobile

The pressure has been building on online retailers to streamline their checkout processes in response to a seismic shift in the frequency with which consumers shop via their mobile devices. Mobile commerce hit a new high water mark this past holiday season, with fully 46 percent of all e-commerce traffic generated by smartphones and tablets.

Many merchants have greatly improved the experiences they offer mobile shoppers by adopting responsive design principles and providing the simplest possible payment options from providers like PayPal, Visa One and AmazonPay. For those retailers which have yet to make easy payments a priority, 2015 may offer some of the clearest reasons to do so yet.

This year, consumers’ expectations for simple online shopping experiences will be bolstered by the highly publicized battle over how people pay for just about anything offline. Technology allowing consumers to use their smartphones to pay for goods where credit cards are accepted has been around for several years. It's called Near Field Communication (NFC), but it's yet to gain anything approaching wide acceptance. That may begin to change in 2015, with modern card terminals on the way and the launch of Apple Pay in late 2014. The tech titan managed to pack into the iPhone 6 a unique system that synthesizes NFC technology, biometrics (i.e., fingerprint authentication) and encrypted tokens to keep users’ financial data secure.

This has set the stage for a showdown with a competing platform called CurrentC that's based on NFC technology and backed by such retail giants as Wal-Mart, Target, Best Buy and Sears. Much has been made in the media about mobile payments, with some predicting that Apple Pay is a game changer while others suggesting maturation of such mobile payment methods is a ways off. Whatever the case, shoppers everywhere will get the message that they can now pay for their latte at Starbucks or prescriptions at CVS with their smartphones. All they need to do is place their device next to a retailer's credit card reader, confirm their identity through an instant fingerpint scan, and a simpler, more secure transaction is complete.

It's far too soon to predict which platform, if either, will ultimately prevail. However, the fallout for retailers will be that an ever-increasing percentage of shoppers will demand easier and easier online transactions. As the mobile payment battles continue, online retailers don't need to try to predict a winner just yet. That said, knowing such speed and convenience will soon be commonplace for transactions in physical stores, they need to seize the opportunity to do everything in their power to ensure that their transactions are as fast and seamless as possible.

If consumers get used to buying music on iTunes or apps on Google Play with one click, they'll expect the same experience in other mobile transactions. If their phones allow them with a single touch to buy a sandwich at Subway, how much patience will they have for m-commerce sites that take too long to load or don't correctly adjust to the smaller mobile screen size? If they can buy a washing machine at Sears by scanning a barcode with their phone, how will they react in the frenzy of the holiday rush when an online retailer requires them to fill out multiple screens of personal, shipping and payment information on the fly?

How creative retailers need to get in expanding their online payments options depends on their customers’ needs and interests. For example, a recent survey of 7,200 online shoppers reported that 25 percent plan to try Bitcoin some day. Retailers need to spend wisely when it comes to their online operations. This year they also need to be aware that the era of experimentation in online and mobile payments is upon them.

Ken Burke is the founder and executive chairman of MarketLive, an on-demand e-commerce platform and solutions provider. Ken can be reached at ken@marketlive.com.