Visa Checkout's Simplicity Pitch Pays Off: Report
Alternative payment systems like Visa Checkout promise to reduce cart abandonment compared to the more drawn-out process of typing in credit card and shipping information. According to recent figures from Visa Inc., Visa Checkout is delivering on that promise.
According to recent comScore figures cited by Visa, nearly 70% of Visa Checkout users convert to online buyers and they are 66% more likely to complete a transaction than customers who must enter billing and card information in a traditional online checkout process. They also are 17% more likely to complete a transaction than those using PayPal Express Checkout in e-commerce, said Sam Shrauger, senior vice president of digital solutions for Visa Inc.
"When designing Visa Checkout, a main goal was to minimize complexity of integration on the merchant side," Shrauger said. "We also have been very explicit with ourselves and our clients that we are there to solve one problem to offer simplicity in the payment and purchasing routine."
More than four million customers have signed up for Visa Checkout since its debut, and more than 125,000 large and small merchants, as well as 260 financial institution partners, now support Visa Checkout globally.
An average order placed with Visa Checkout was 7% higher than orders placed on other retail and travel sites with other payment options, Shrauger said. Visa introduced Visa Checkout last year, replacing and rebranding its V.me digital wallet.
New merchants to Visa Checkout include Dunkin' Donuts, Fandango, Sundance Catalog and Williams Sonoma in the U.S., while Pizza Hut, Ticketek and Bonds join in Australia. Indigo, Roots, Running Room and Simons will add Visa Checkout in Canada.
"The Visa Checkout product is performing as we expected it to and exceeding expectations in some regards," Shrauger said.
In a separate study, Millward Brown reported that 95% of Visa Checkout customers said signing up for the service was easy and 96% said they felt secure using it.
The number of customers feeling confident in the security of Visa's system will be a key selling point. Visa Checkout will deploy all of Visa's e-commerce security methods with tokenization and end-to-end encryption.
Ultimately, security is what will differentiate the various mobile and digital wallets under development, said Beth Robertson, managing director at Robertson Payments Services LLC.
"I think fraud concerns are still a key factor in online payments, and that's the one thing still evolving and will continue as a concern as EMV is implemented at the point of sale," Robertson added.
Because fraud attack vectors will always evolve, so too will fraud prevention mechanisms, Robertson said. "Will it impede the ease of checkout? In some cases it might," she added. "But many [security] measures can be transparent to customers and keep things easy for them."
Visa says the e-commerce checkout system will be available in 16 markets by the end of the year: The U.S., Australia, Argentina, Brazil, Canada, Chile, China, Colombia, Hong Kong, Malaysia, Mexico, New Zealand, Peru, Singapore, South Africa and United Arab Emirates.