We are now in a new era of frictionless spending and when a consumer decides they want to pay for something online they want to be able to pay for it easily and quickly – in just one or two clicks. Paul Paterson, Commercial Director at ImpulsePay outlines how Charge to mobile can help this happen
With mobile payments coming of age, and with more time spent shopping on mobile devices, online retailers now need to have a solid mobile payments strategy in place. Last year, 66% of mobile users carried out a financial transaction via mobile, according the Global Money Report conducted by MEF.
However, despite mobile being the fastest growing retail segement, over two thirds of retailers admitted they did not currently offer any mobile payment options for consumers, according to a survey conducted by Conlumino on behalf of Barclay’s. Data from the indicates that businesses are experiencing a growth in mobile visitors, but not the results of that in revenue terms.
It is now time for retailers and online retailers to take steps to enhance their site so consumers can purchase on mobile. Otherwise they miss out on the mobile retail revolution.
Shop security and convenience
As consumers are moving to mobile there is also a major shift away from current favoured online payment methods such as credit cards and PayPal, to a broader set of online and mobile payment options. Some of the traditional options will remain as consumers view them as particularly suited to big ticket, high value items.
However, new technologies are far better suited to serving consumers on the move or those wishing to make small, infrequent transactions. As a result consumers now expect a range of payment options, so retailers ready to adopt a mobile payments strategy need to give the consumer choice.
When looking to adopt new payment technologies retailers need to consider if it will truly open up their audience. The best new technologies are those that can achieve widespread consumer engagement and adoption through having the support of existing mobile technology providers (mobile networks and handset manufacturers).
Consumer preference will gravitate towards the mobile payment option that best meets their specific needs, primarily one that is secure, easy to use and one that matches the ‘tap and pay’ mentality. But it also needs to be easy for the retailer. For a solution to add value to existing payment methods, it needs to be as integrated and seamless as possible.
A pre-installed mobile money ‘app’
Charge to Mobile is one of those technologies that is possibly in the “best things you’ve never heard of” category. That is despite it being backed by all the UK’s mobile network operators and being available to anyone in the UK with a mobile phone. Unlike most mobile payment methods, Charge to Mobile is essentially like an app already installed on a person’s phone. It doesn’t require the consumer to download a new app and there’s no requirement for pre-registration or a bank account, just a UK mobile number.
This payment method allows a customer to make a purchase via their mobile, in a quick transaction without entering their credit card data, and the costs of those goods are charged to the customers’ mobile phone account, or taken from the available credit if they are on a pay as you go tariff.
Charge to Mobile is 7.5 times quicker than using a credit card, and in some cases just a two-click payment. So for customers a Charge to Mobile option at check out is even simpler – meaning that even for people with access to other payment methods Charge to Mobile is often more convenient and less likely to result in basket abandonment.
The UK’s largest existing user base of shoppers
Right now any consumer in the UK with a mobile phone can use Charge to Mobile – that means 93% of the UK population are already ready to purchase. With over 85 million active mobile subscriptions Charge to Mobile already has the largest share of users than any other mobile payment option in the UK.
When compared to the 58 million credit cards in circulation in the UK in early 2014, of which only 66% were active, a Charge to Mobile option at check out has the potential to reach an additional 37% of UK adults.
By offering the Charge to Mobile option at check out alongside a credit card or PayPal button, suddenly many new potential purchasers are available for retailers, including those without a credit card, the under 18s or the hundreds of thousands of people that lack a bank account, who are otherwise excluded from the alternative services. In countries where mobile penetration is high, but hundreds of millions of people lack credit cards or bank accounts, a mobile payment option, such as Charge to Mobile, has enormous potential as a way to enable even more people than alternative options to make purchases on mobile devices.
What are people buying?
At present content bought through Charge to Mobile is ‘digital’ content – primarily micro transactions that might only be made on a mobile device.
However, as the technology is changing, so is the regulation. The limits of what can be bought using Charge to Mobile are expanding – an expected relaxing of the restrictions placed by the Payment Services Directive (PSD) will soon see it become possible to sell non-digital goods via Charge to Mobile.
In the short term, the types of physical goods that Charge to Mobile will be used for is likely to be those where the consumer is on the go e.g. buying a train ticket or magazine or purchasing something via a mobile application like entry to a gig. Using Charge to Mobile as a means to purchase big ticket items in store or at a physical point of sale is expected to be a bit further down the line.
Retailers are advised to still offer a full range of checkout options, but they have to realise that when it comes to the content or digital services, many consumers no longer want to use credit cards for such small, infrequent transactions.
A major mobile retail opportunity
For retailers, setting up a Charge to Mobile option at check out is a simple, uncomplicated and quick to integrate system. The expected regulatory changes, coupled with 90% payouts, a frictionless two-click payment process and support from all the major UK operator network makes it one of the most powerful mobile money solutions available and presents a major mobile retail opportunity.