As big companies lock horns to bring mobile wallets to the point of sale, smaller companies are focusing on a different opportunity — improving payments in mobile e-commerce.
Zappli Inc., a San Francisco-based company founded in 2010, says mobile shopping is still very cumbersome because many merchants force consumers to go through numerous steps and keystrokes to close a transaction.
"It is the worst thing you can do when trying to convert site visits to sales," says Philippe Suchet, Zappli's CEO. "Our company vision is to make the online shopping experience much easier from a mobile device."
By making payments less cumbersome for consumers, Zappli aims to boost mobile sales for merchants.
After completing tests in the coming weeks, Zappli intends to introduce its InstaBuy system to companies providing digital shopping carts and portals. Zappli will provide the software to allow consumers to make an online purchase from a mobile phone with two clicks.
Operating as a middleman, or shopping assistant, between the consumer and the shopping portal and retailers, Zappli's InstaBuy provides a registered consumer's shipping address and payment card information to retailers when the consumer decides to purchase a product, says Suchet. This removes the requirement for the consumers to type these details on a mobile device's small screen and keyboard.
Zappli is not the only startup promoting simpler mobile e-commerce payments. It's not even the only one that begins with the letter Z.
ZooZ, an Israeli company that was also founded in 2010, allows users to authorize mobile e-commerce payments by typing a PIN instead of a full account number. Its system relies on the mobile device as a factor of authentication.
ZooZ last month announced a deal with the mobile commerce platform provider MobiCard, which has 10,000 clients that will eventually be required to use ZooZ to handle payments from credit card or PayPal accounts.
"Mobile payments is a very hot space right now, and it seems like everyone is developing similar technologies, but when looking at them closely, they are not all the same," Suchet says.
Zappli promotes InstaBuy as a free service that consumers can sign up for on the Zappli website by providing e-mail address, shipping address and credit, debit or prepaid card details. After signing up for the service, a consumer needs to make only two clicks — one after inputting an e-mail address and a password, and a second when confirming a purchase — when buying something on a shopping portal powered by InstaBuy.
Shopping portals generally offer similar products from various stores, allowing consumers to comparison shop. Portals using InstaBuy will display the InstaBuy logo near each product description, Suchet says.
Zappli sells the service to the shopping portal operator and sets up a revenue sharing agreement with that provider, Suchet says. Zappli stores some of the consumer information on a cloud-based server, while the consumer keeps some encrypted data on his mobile device.
Zappli executives, who have about 18 years of experience in e-commerce and payments, hope consumers view InstaBuy, with its two-click feature, as a unique online shopping service, he adds.
However, Zappli may find limited scope for its product, considering that prominent companies like Amazon.com and eBay's PayPal provide similarly simplistic one- or two-click buying options, says Gil Luria, analyst with Los Angeles-based Wedbush Securities.
"Not everyone has an Amazon or PayPal account, of course, but the convenience of online and mobile shopping is a key reason PayPal is so successful," Luria says.
Zappli may fare well in its role of providing a service that essentially works for all retailers through an online shopping portal, says David Kaminsky, analyst for emerging payments with Mercator Advisory Group.
"The concept is a great idea and it is a much-needed service," Kaminsky says. "Too many consumers lose interest in making an online purchase with a mobile device because there is so much more information you have to add to complete mobile checkout with a phone," he adds.
In addition, Kaminsky notes Zappli appears to have a "very strong encryption method in place," improving InstaBuy's appeal.