American Express and ShopRunner are promoting a system designed to mitigate online 'cart abandonment' as more e-commerce moves to mobile devices.
"Once you get to mobile, it's annoying and painful to type in all of the payments data," says Fiona Dias, ShopRunner's chief strategy officer.
ShopRunner, a membership-based electronic commerce service, is giving Amex cardholders free memberships if they enroll with their Amex cards. ShopRunner's CEO, Scott Thompson, is the former CEO of PayPal and Yahoo.
ShopRunner's low-navigation online payment technology, PayRunner, allows shoppers to buy items directly from a product's detail page, rather than adding a product to an online shopping cart. This should reduce abandonment, which is still as high as 90% in electronic commerce, according to Janney Capital Markets.
"You basically skip checkout experience. You don't have to put in shopping information or your buyer information or credit card number, because we already know that about you," Dias says.
ShopRunner charges consumers $79 a year to get two-day shipping at a network of retailers including Brooks Brothers, Toys R Us, Sports Authority, Domino's Pizza, PetSmart and Drugstore.com. ShopRunner also stores consumer payment information, removing a number of steps from online checkout
Through the Amex promotion, ShopRunner waives the $79 fee for Amex customers for one year. ShopRunner also supports Visa, MasterCard, Discover and PayPal.
The partnership with Amex adds nearly 50 million potential card accounts to ShopRunner's roster, while Amex can promote faster checkout with free shipping.
"If you are a [card network], there are other payment alternatives out there that are a risk to your market share," Dias says. "American Express saw shipping as a way to introduce their customers to a service that also provides an easy way to pay online." American Express did not make an executive available for an interview by deadline.
The new Amex partnership expands on the short-term special offers the companies have jointly offered in the past during the holidays.
Amex's support "helps validate the [ShopRunner] network and could be worth watching as the payment space rapidly evolves," Janney said in a research note on the companies.
Amex and ShopRunner face competition from Amazon, which offers Amazon Prime, a $79-a-year service that provides two-day shipping to participants. Amazon also has a one-click checkout process for customers who have enrolled their payment credentials.
Google Wallet, MasterCard, Visa's V.me and MCXa consortium of retailersare also targeting online shopping. PayPal's Merchant Express Checkout requires consumers to enter their PayPal account log into to avoid other checkout navigation steps for online purchases.
MasterCard's MasterPass allows consumers to pay with a single click, and is available at more than 170 merchants in the U.S., says MasterCard spokesman Brian Gendron in an e-mail. Consumers can also access account balances, rewards and real-time alerts via MasterPass, Gendron said.
MasterPass is available in the U.S., Canada and Australia, and will be introduced in other markets in the coming year, Gendron said.
Digital payments company Braintree has also built one-click shopping via its acquisition of Venmo. A consumer enters payment data on a Braintree app, and then is prompted to save the card with Venmo. After that, the user enters a credit card security code to make a payment.
"There are a lot of vendors moving into the e-commerce space to solve the [cart] abandonment problem," says Denee Carrington, a senior analyst at Forrester Research. "Whether abandonment is getting better or not, there is a perception that there's a need to meet the problem."