December 3, 2012
If the start of the holiday-shopping season this year has demonstrated anything, it is the new prominence of mobile in the mix of payments. But for all the talk among online merchants about mobile payments, not all will benefit equally from the trend, according to Bill Ready, chief executive of Chicago-based online processor Braintree.
Ready tells Digital Transactions News that on Cyber Monday, the first Monday after Thanksgiving when consumers are said to be shopping heavily online, Braintree saw 29% of its transactions originate from a mobile device. “We’ve trending in that direction for a long time,” Ready says, but the number still surprised him. “I would have predicted 25%,” he says.
Indeed, overall mobile volume for Braintree over the Thanksgiving holiday and Cyber Monday tripled compared to the same period in 2011, Ready says. “It’s interesting how fast that’s happening,” he notes. “For those [merchants] that are mobilizing,[mobile volume] is tripling or better.” Braintree serves more than 3,000 merchants, including 50 of the 500 largest e-commerce sellers. Of the $5 billion in volume it will process this year, about $1.5 billion will have originated from a mobile device, Ready says.
He credits the rapid rise in mobile volume to the ability of client merchants to cater to mobile shoppers. Mobile sessions, he argues, should convert to mobile sales with the right preparation. “We see that the conversion rate on mobile can be better than from PCs or desktops,” he says.
Merchants can maximize mobile conversion in three ways, Ready argues. The first is to “mobilize” the site so it renders quickly and is convenient to use, much like an app. “You don’t want [customers] to be pinching and dragging and waiting for big images to render,” he says.
Second, merchants should provide a so-called one-click checkout to make the transaction easy. Consumers aren’t willing to fill out forms on handsets the way they might on a PC. “Data entry is difficult on a mobile device,” he says. “On a touchscreen, that’s really painful.” Third, merchants should minimize merchandise clutter, keeping the selection to a short range of products likely to appeal to the particular customer. “People are willing to go through hundreds of items on a desktop,” Ready says. “It’s a Costco. But on a mobile device you’re running a 7-Eleven. Know who the consumer is, and give upfront the four or five things that person is likely to be interested in.” Evcn the psychology of search is different, Ready argues. “Don’t assume [customers] will be willing to search through your site to find items the way they will on a desktop,” he says.
So far, more mobile volume isn’t yielding higher fraud losses, according to Ready. In fact, the 30% of Braintree’s volume that is mobile in origin may be helping to hold down fraud, he argues. “We see a fraud-loss rate across our base that is 75% to 80% less than the e-commerce average,” he notes. In other words, he says, “We see enough mobile to see less fraud losses than the e-commerce average.”
The lower fraud rate on mobile stems from the unique properties of mobile devices, Ready says, without going into detail. In this way, the device tells much more about its user than does a plastic card. “With a phone, I know you’re in possession of the phone, as with a card, but I have reason to believe you are you,” he says. “The phone give so many attributes, who you are, where you are, what you’re doing.”
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