special report: trends in mobile payment april 2015 · 10 confidential & proprietary blue moon...

Special Report: Trends in Mobile PaymentApril 2015

Contents

• Executive Summary

• Consumers Adopting Mobile

• Mobile Payment Methods

• Leveraging Mobile Payments

• Enabling Your Business

2 Confidential & Proprietary Blue Moon Digital, Inc. 2015

EXECUTIVE SUMMARY

Executive Summary

• Growth in Mobile Adoption

– In 2015, smartphone users will account for 3 out of every 4 mobile phone users

– Mobile traffic will surpass desktop traffic in 2015 for most retailers and brands

• Growth in Mobile Payment Adoption

– Mobile payment options will quicken and simplify the checkout process, essentially making a consumer’s life easier

– Mobile payment options provide a safer and securer means of purchasing on a mobile device

• Expected Outcome

– In-store mobile payments will top $800 billion in 2019

– Retailers can no longer afford to exist outside of the mobile payment world, or they will be edged out of business

– Adding mobile payment options to mobile sites and mobile apps will improve the mobile conversion rate

• Key Takeaways

– Brands and retailers must have mobile friendly websites (Mobile responsive or M-dot mobile site)

– Blue Moon Digital recommends that brands and retailers offer two types of mobile payments


Source: eMarketer: US Digital Users: Q1 2015 Complete Forecast; BI Intelligence

CONSUMERS ADOPTING MOBILE

Mobile Payments

• Mobile (Smartphone and Tablet) payments are not new to the Ecommerce industry, but they have become more relevant in recent years as the consumer continues to migrate from desktop to mobile devices for online shopping.

• Smartphone usage continues to grow daily, making it easier for consumers to shop on the go.

• Now that Apple Pay has entered the market, other mobile payment options have become more relevant.

• Consumers are embracing a mobile lifestyle and the shopping and payment experiences are rapidly evolving.

• Retailers must provide a secure, simple and optimized way to speed up the checkout process without requiring consumers to enter their financial and billing information every time they make a purchase.

• This document is intended to provide the following:

– Information on smartphone usage

– Secure mobile payment options to facilitate faster checkout in-store and online

– Tactics to message consumers and inform them of their payment options on mobile


Mobile Behavior in the U.S.

In 2014, time spent with digital media among U.S. adults surpassed time spent with TV, with mobile driving the shift.


Source: adroitDIGITAL Mobile Insights (1-eMarketer: Mobile: Time Spent Per Day; US 2010-2014; 2 & 3-eMarketer: US Digital Users: Q1 2015 Complete Forecast; 4-Adroit Digital Millennial – The New Age of Brand Loyalty; 5-eMarketer: Mobile Display Ad Spending-March 2015)

Desktop vs. Mobile


• In June of 2013, mobile devices users, including tablets and smartphones, exceeded users of desktops/laptops.

• Consumers are changing their mobile behavior and retailers must adapt to that behavior.

• Mobile payment options continue to grow in-store as well as online.

Source: comScore: State of US Internet

Consumer Search Behavior is Changing

• Consumers research products using search engines, branded websites and branded apps.

– 38% of searches for apparel and beauty begin on a search engine

– 31% of searches for apparel and beauty go direct to the brand website

– 21% of searches for apparel and beauty begin their search via a brand’s app


Source: comScore: Google Mobile Path to Purchase custom study

Consumers Using Mobile Devices

• 80% of U.S. internet users currently own a smartphone.

• While desktop and laptops are currently the top devices utilized for searching the internet, smartphones are not far behind with 80% of consumers utilizing their smartphones to search the internet.

• Mobile now generates over 20% of transactions in all retail verticals except “home”.

• Fashion and luxury retailers have the highest share of mobile transactions, with mass merchants following closely behind.


Source: Criteo, State of Mobile Commerce Report Q1 2015

Conversion Rate Challenges


• The significant growth in smartphones is having a major impact in overall retail conversion rates.

• Desktop average conversion rates for all retailers, across all online categories, is an average of 2.78% in the U.S.

• iPhone, Android Phone, and Windows Phone all average conversion rates below 1.0%.

Conversion Rate Challenges


• As more consumers use their smartphones to read their emails and access the internet, conversion rates have declined due to the difficulty of the mobile checkout process.

• Smartphone conversion funnels are weaker at each step in the funnel.• Desktop purchases typically result in higher average order values.• Consumers are having difficulty completing their transactions.

Source: Criteo, State of Mobile Commerce Report Q1 2015

Mobile Payment Options Will Help the Mobile Shopping Experience

• Problematic checkout forms are exacerbated on mobile devices due to the smaller screen size and how the consumer interacts with it.

• Mobile payment options provide consumers with another option to pay and streamline the checkout process.

• Mobile payments will simplify mobile checkout and continue to increase conversion rates.

• Mobile payments provide a safe and secure payment option.

– Allow consumers to upload their credit card information once for use at multiple retailers.

– When shopping on a mobile device, consumers may not have time to upload their credit card or shipping information, thus resulting in an abandoned shopping cart.

– It is important to understand the security features of each mobile payment option.

• Mobile payment options provide a one step checkout process.

– Providing a shortcut through the checkout process reduces frustration and abandonment with online shopping.


Source: Formisinmo, Shopping Cart Abandonment Rate Statistics; Monetate: Ecommerce Quarterly

Mobile Payment Adoption Has Begun


• 2014 saw a significant increase in mobile payment adoption thanks to the introduction of services like Apple Pay, which launched in October.

• Bloomingdale’s was ahead of the curve with this promotional campaign leveraging both email and mobile channels.

• Adapting to the consumer’s behavior based on devices used, Bloomingdale’s was able to deliver a coupon right into the consumer’s mobile wallet, regardless of whether they were on an iPhone or Android.

Source: Experian Marketing Services, Spring 2014 Simmons Connect Study, 2014

MOBILE PAYMENT METHODS

Cross Platform Payment Options


Blue Moon Digital recommends that all clients offer PayPal, as well as Amazon Checkout and Google Wallet on their classic and mobile websites. These payment options currently have the largest group of participating consumers. • PayPal is one of the world’s most

widely used payment acquirers, processing approximately 8 million payments every day.

• Amazon currently has over 244 million active account holders who have access to Amazon Payments.

• Google has never disclosed how many people use Google Wallet, but one estimate by The Guardian noted that the total number of people who have downloaded the app is just over 20 million.

PayPal (Online)


• PayPal allows consumers to checkout with a single sign-in anytime PayPal is present on a brand’s classic or mobile website.

– Email and password gets a consumer through to checkout quickly. – PayPal can be used on smartphone, tablet or desktop.

• PayPal provides secure transactions by only requiring a log in and no visible payment data.

PayPal (In-Store)


• PayPal recently released an App that allows a consumer to pay in-store, similar to Apple Pay, utilizing Near Field Communication (“NFC”).

• NFC enables smartphones and other devices to establish radio communication with each other by touching them together or bringing them into proximity of 3.9 inches or less.

Amazon Payments


• Amazon Payments allows consumers to checkout with a single sign-in anytime Amazon is present on a brand’s classic or mobile website.

• Amazon Payments can be utilized via a mobile device on the brand’s site.

– Email and password gets a consumer through to checkout quickly.

– Amazon Payments can be used on smartphone, tablet or desktop.

• Consumers select the Login with an Amazon Account button.• Consumers enter their Amazon username and password.• Consumers select a shipping address and payment method

from data already saved within Amazon.• Amazon Payments accounts are subjected to several

verification procedures to maintain the highest levels of security, trust and protection from Amazon.

• Amazon currently has over 244 million active account holders who have access to Amazon Payments.

Amazon Payments Process


Google Wallet (Online)


• Google Wallet Instant Buy enables users to checkout in as few as 2 clicks.• Google Wallet allows consumers to purchase in stores via built-in NFC technology on a

classic or mobile website, or send money to anyone in the U.S. with a Gmail address. • To purchase with Google Wallet, a consumer must have a Gmail account. They can then

set up an account utilizing their debit or credit card and Gmail address. They can also enter payment and shipping information at this time.

• When the Google Wallet checkout button is present online, a consumer can click on the button, login to their account and pay, similar to PayPal.

Google Wallet (In-Store)


• When purchasing in stores, consumers can tap and pay when the Google Wallet symbol is present.

• Google Wallet stores credit and debit card information on secure servers and encrypts payment information with industry-standard secure socket layer (“SSL”) technology.

• Google Wallet provides consumers with 24/7 fraud monitoring.• The Google Wallet program can also provide consumers with a Google Wallet Card.

• The card can be used at Debit MasterCard® locations and can be used to withdraw cash at any ATM.

• You can use the Google Wallet Card everywhere Debit MasterCard is accepted.

MasterPass


• MasterPass enables users to checkout in as few as 2 clicks.• MasterPass allows consumers to purchase on a classic or mobile website, and within a

mobile app.• MasterPass cannot currently be utilized in-store. • To purchase with MasterPass, a consumer must create a MasterPass account. They can

then set up an account using any debit or credit card. • When the MasterPass checkout button is present online, a consumer can click on the

button, login to their account and pay, similar to PayPal.• Consumers are protected with the MasterCard global payment network protection

program, which includes consumer data protection and multiple-step authentication processes.

Visa Checkout


• Visa Checkout enables users to checkout in as few as 2 clicks.• Visa Checkout allows consumers to purchase on a classic or mobile website, as well as

via app purchases. • Visa Checkout cannot currently be utilized in-store. • To purchase with Visa Checkout, a consumer must create a Visa Checkout account. They

can then set up an account utilizing any debit or credit card along with their payment and shipping information.

• When the Visa Checkout button is present online, a consumer can click on the button, login to their account and pay, similar to PayPal.

• Consumers are protected using industry standard encryption and multilayer authentication to protect the information stored in an account.

Apple Pay

• The new iPhone 6 models have NFC technology built in; any store that has a functioning contactless reader will accept Apple Pay, just like they will Google Wallet, PayPal and NFC chipped cards.

• Via Apps

– On iPhone 6 devices, you can use Apple Pay to pay with a single touch within apps. Checking out is as easy as selecting Apple Pay as your form of payment and placing your finger on Touch ID.

– Brands and retailers already accepting Apple Pay in their apps include Groupon, Target, Houzz, and Fancy, with many more on the horizon, including Amazon.

• In-Store

– To pay in-store, consumers simply hold their iPhone 6 near the contactless reader with their finger on Touch ID. A subtle vibration and beep confirm that payment information was successfully sent.

• Apple Pay is not available for mobile sites.


In StoreIn App

Apple Pay Privacy


• A device-specific number is tied to the actual credit card number, as well as the consumer’s device.

• The credit card number scanned or entered by the Apple Pay user is not used to complete transactions.

– The credit card issuer generates a different device-specific number that is stored in the iPhone's hardware (the secure element, known as a “token”).

– The credit card issuer receives that number for transactions and connects it to the card number on file.

• Even if someone hacked Target’s system again and collected all of these numbers, they would be of little use since the numbers are tied to specific iPhones and iPads.

Groupon App Purchase with Apple Pay


Purchased on iPhone 6, via the Groupon App with Apple Pay.

Confirmation of purchase was immediate and only required 1 step.

PowaTag App


• Shop and pay via the PowaTag app, in stores and online.– Adding PowaTags to online product catalogs allows

consumers to use their phone to shortcut the checkout process.

– Consumer purchase data can be captured to build personalized promotions.

• PowaTag uses a combination of technologies including Bluetooth, QR codes, JavaScript, audio sensors and instant payment authentication to enable consumers to scan and buy almost immediately.

• PowaTag allows consumers to buy things any time without entering in their address and credit card details every time.

– Billing and shipping information is stored in the PowaTagapp, which speeds up the transaction.

• Tagged items can be seen on display ads, billboards and magazines, in shop windows, on apparel and accessories in stores, and also online. This allows the PowaTag to be used from advertisements to the website.

What about Current C?

• A significant number of merchants including Walmart, Kmart, 7-Eleven, and Best Buy, are currently in competition with Apple Pay. These retailers, through a joint venture formed in 2012, are building their own mobile payment app called Current C. It's expected to launch in 2015 and is currently being BETA tested.

• Current C is a payment system app controlled by retailers and free of credit card processing fees, which is very appealing to these merchants.

– CVS and Rite Aid have stopped accepting Apple Pay in support of Current C.

• Currently, not a single bank is supporting Current C.

– A consumer can use their checking account, store gift cards and select store debit and credit cards. The system is designed to cut out the middleman and credit card processing fees by functioning as a debit card.

• The app does not plan to replace plastic credit cards. Instead, it will withdraw directly from your checking account when you pay at the cash register, with a QR code displayed on your Android or iOS device.


LEVERAGING MOBILE PAYMENTS

Where to Begin

• Confirm that the mobile site is optimized

• Determine which payment option is optimal for your business and consumers.

– PayPal allows a consumer to tie their online purchases to the credit card of their choice or their bank account.

– Amazon Payments can be offered as a checkout or payment option on retail websites enabling Amazon consumers to use information stored in their Amazon.com accounts.

– Google Wallet is a digital wallet that securely stores credit cards, debit cards, gift cards, and loyalty cards. With Google Wallet, a consumer can shop in stores, buy online, and send money.

– MasterPass is a digital service that allows consumers to use any payment card for an enhanced shopping experience that is as simple as a click, tap or touch – online or in-store.

– Visa Checkout allows consumers to simply enter their username and password and speed through the checkout process with a single account.

– Apple Pay can only be used via a mobile app or in-store currently, so this offering is limited to those brands and retailers that provide either of these offerings.

– The PowaTag App allows consumers to shop and pay in stores and online. PowaTags need to be added to online product catalogs to allow consumers the opportunity to use their phone to shortcut the checkout process.


Next Steps


• Confirm that all payment options are available on desktop and on the mobile site

• If you only accept one mobile payment option, consider adding a second

• Determine your payment options for in-store, if applicable and online

• Confirm that your emails are responsive for mobile users

• Mobile users are more likely to abandon their shopping cart than desktop users, and they should be reminded of their forgotten items with shopping cart abandonment emails.

• Consider sending site abandonment emails to help drive mobile users back to your site to continue shopping.

• Retarget those that have browsed your site on mobile and desktop

• Determine what mobile payment option is right for your existing app

• Set up analytics tracking and reporting

Make Payment Options Easily Accessible

• Include all available payment options at checkout on your mobile site.

• Buttons should be easily accessible and apparent at checkout.


Tracking Mobile Payments


Google Analytics, Adobe Analytics and IBM Digital Analytics can all easily identify and isolate purchases from mobile devices.• Note that PayPal users technically do

leave your site for one page while checking out.

• If you have the Universal Google Analytics tracking code on your site, simply add paypal.com to the referral exclusion list in your property settings.

• If you are still utilizing the old asynchronous version of tracking codes (ga.js), contact your Blue Moon Digital team to discuss upgrading to the Universal tracking code.

• In order to isolate the actual payment method used by mobile users, you will need to:– GA: Utilize a custom dimension to pass the method into GA or upgrade to enhanced

ecommerce tracking where the payment method becomes a standard value available for use.

– Adobe Analytics: Utilize one of your eVars to collect the payment method.– IBM Digital Analytics: Utilize an “orderExtraparms‘’ to pass through the payment method

for the order.

Informing the Consumer

Including information that speaks to checkout options on site, as well as in email and display ads will help guide consumers to easily checkout on their mobile phone or tablet.



• Speak to mobile checkout options in emails so that consumers are informed about what is available on the site.

• Include mobile checkout information on automated campaigns such as Shopping Cart Abandonment emails, to make checkout easier and encourage purchases.



• Include all available payment options at checkout.

• Remind the consumer throughout the shopping experience of the payment options available.

• Encourage the use of these payment options at final checkout.


ENABLING YOUR BUSINESS

Summary of Recommendations

• As smartphones become the largest productivity connection tool, brands and retailers must adjust to provide consumers with access to easily shop from any mobile device.

• Provide mobile consumers at least one mobile friendly payment option.

• Remind consumers of items left behind with shopping cart abandonment emails, site abandonment emails and remarketing messages.

– Some consumers will prefer to complete the transaction via desktop or tablet, so continue to offer reminders and send remarketing messages to those who have browsed key content on a smartphone without converting.

• Blue Moon Digital recommends that all clients offer PayPal, as well as Amazon Payments and Google Wallet on their classic and mobile websites.

– PayPal, Amazon Payments and Google Wallet are widely accepted and have the largest group of participating consumers.

• Blue Moon Digital recommends that no more than three additional mobile payment options are offered beyond Mastercard, Visa, American Express and Discover.

– Too many options may push the payment options to the second page, especially on mobile devices, and may become confusing to shoppers.


How We Can Help

Engage Blue Moon Digital to address the state of your mobile strategy and evaluate your mobile readiness in the following areas:

• Usability Testing – Determine if your website, mobile site or mobile app is consumer friendly, SEO optimized and if the analytics tagging will provide useful data.

• Analytics – Evaluate if your analytics tagging is sufficient or in need of fine tuning to capture all data specific to mobile.

• SEO – Evaluate your SEO strategy for mobile and provide recommendations to maximize visibility in mobile search engines and local searches.

• SEM – Evaluate your SEM strategy in paid search and display advertising for optimal targeting and impressions on mobile devices.

• Email – Determine if your email templates are optimized for mobile devices and if your ESP is capturing specific mobile metrics.


Stay Tuned…


Options for Mobile Payments continue to grow daily. Stay tuned for industry updates as these options evolve.

CONTACT US

Blue Moon Digital, Inc.1512 Larimer Street, Suite 800Denver, Colorado 80202p: 1.800.455.4499e: [email protected]

special report: trends in mobile payment april 2015 · 10 confidential & proprietary blue moon...

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