Adding a payment mechanism to online advertising is becoming a popular way to close the conversion gap between mobile shopping and purchasing.

“Today if you look at consumer screen time, more than 50% is on a mobile device,” said Murali Subbarao, CEO of XpressBuy, an advertising commerce platform that allows buy buttons to be inserted directly into online ads. XpressBuy on Wednesday announced a partnership with self-service mobile advertising company PocketMath, which will offer the XpressBuy API to its retail clients.

The companies hope to address the lack of conversion between mobile shopping and payment by locating the payment experience closer to the shopping. On retailer sites, 60% of traffic comes from smartphones and tablets, according to comScore, Inc. But only 15% of orders are initiated from these devices.

“While [consumers are] in the mobile device … they look at products from a variety of different places. If you wanted to buy you’d have to leave the site you were on to go to the retailer’s site,” said Subbarao.

This adds substantial friction to the experience, especially when consumers are perusing their social media feeds or consuming content on a publisher’s site.

That's where XpressBuy and other payment companies that move payments near advertising and other shopping content—such such as Zooz, Koupah and Banno—see opportunity.

To make payments with XpressBuy, customers tap the buy button and enter their zip code. Because XpressBuy has partnered with mobile network operators, personal information such as name and address can be obtained from those providers. XpressBuy works with AT&T, T-Mobile and Sprint. If the information is correct, consumers then input their payment card details and verify the transaction. After the transaction is initiated, the consumer can use the mobile device’s “back button” to return to the initial site.  

“On the merchant side, they see a higher return on investment,” said Subbarao, contending XpressBuy delivers six times the conversion rate of traditional click-through advertisements.

More than 450 retailers, over a wide range of verticals including electronics, clothing and pet supplies are already using XpressBuy. The company is aggressively going after new merchants, hoping to have more than 10,000 retailers enabled by the end of the year.

“During the shopping journey a consumer may be looking at a product outside the retailer’s site, such as a promotion or a recommendation by a friend on social media or within a review,” Subbarao said. Because the buy button can be placed anywhere, from Twitter to emails to SMS text messages, XpressBuy allows consumers to act on impulse.

The average purchase price when XpressBuy is enabled on performance advertising platforms is $187; on Facebook, which also has a buy button, the average purchase price is around $50, said Subbarao. Facebook would not comment on Subbarao's assertion.

XpressBuy is currently talking with several mobile wallet providers in an effort to enable more payment methods at checkout.

XpressBuy takes a percentage fee of each transaction and charges for the data it provides to the merchant. Retailers either pay XpressBuy directly or the fee is bundled into the cost of the advertising platform they use.

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