Digital Transactions Authoritative, insightful and timely information for payments professionals
It's too early to make a final judgment, but a Web-site design and hosting company serving 25 online fashion retailers says acceptance of Amazon.com Inc.'s new PayPhrase is doing one of the key things online retailers want a payment service to do?reduce shopping-cart abandonment. Secaucus, N.J.-based eFashionSolutions LLC is one of a handful of launch partners working with Amazon on the initial rollout of PayPhrase, the newest product on the Amazon Payments shelf. Announced publicly on Oct. 29, PayPhrase allows an online shopper registered with an Amazon Payments-accepting merchant to select and store a word or short phrase, and a PIN, as checkout credentials. Those credentials are linked to the customer's funding source, such as a credit card. After registering, all the customer needs to do to buy from a PayPhrase merchant is enter that phrase and a PIN. EFashion Solutions provides e-commerce platforms, including payment services through Litle & Co., for DKNY, Baby Phat, Deron, Lily of France, Playboy, and other fashion retailers. Chief executive Ed Foy Jr. says he got to know Amazon executives at trade shows and through other contacts. “Everybody's interested in the fashion industry,” he says. Those contacts led to Amazon picking eFashion Solutions as one of PayPhrase's launch partners. Asked about incentives from Amazon, Foy says “they motivated us,” but he would not provide specifics. The firm, which also offers the Checkout by Amazon payments service as well as the major card brands, began enabling its merchants to take PayPhrase in the fourth quarter. Back-office implementation proved to be fairly easy. “We were able to pull it off without a hitch,” Foy says. Foy can't give transaction numbers or related details because of a confidentiality agreement with Amazon, but he tells Digital Transactions News that the initial customer acceptance of PayPhrase is strong. The percentage of sales being charged on PayPhrase “has exceeded our expectations,” he says. PayPhrase also appears to be an antidote to an ailment affecting all online retailers?shopping-cart abandonment, or failure to complete an initiated purchase. Many factors can affect abandonment rates, but e-commerce merchants perceive a multistep payment process, especially one that takes the shopper away from the retailer's Web site, as a major contributor. At eFashion Solutions' PayPhrase-accepting merchants, abandonment rates are down in the “low to mid double-digits,” according to Foy. He adds that, “We've seen an increase in average transaction size.” Seattle-based Amazon did not respond to a Digital Transactions News request for comment. Foy says the older Checkout by Amazon service garners “definitely more” transactions, but he expects PayPhrase to gain share as consumer awareness of it increases.
