Phil McGriskin, chief product officer with WorldPay, looks at how retailers can best approach implementing a mobile payments channel
m-commerce has been hotly tipped as the next major advance in retail and payments for about the last six years, but only recently have we seen merchants finding ways to make it into a stable revenue stream. The ubiquity of mobile devices in our day-to-day lives has essentially changed consumers’ shopping behaviour so that they can browse and buy through their devices anytime, anywhere. Coupled with technological advances, never has the opportunity for mobile been so great.The UK mobile payments market is expected to be worth £2.5 billion by 2016 and worth up to £19 billion to the UK economy in 2021 [according to eBay commissioned research.]
IMRG statistics show that in Q2 2011, visits to e-commerce sites from mobile devices accounted for 7 per cent of overall traffic, up from an average of 1.4 per cent in Q1 2010.
According to WorldPay’s Global Online Shopper report, almost half of online shoppers in the UK own a smartphone (48 per cent) and 13 per cent own a tablet, demonstrating a propensity to buy via these devices.
Promisingly, too, 29 per cent of UK consumers say they are likely to use those devices to purchase online in the next year.
Perhaps the most dramatic change aligned to recent mobile successes is that consumers are able to browse using their personal technology any time they want – on the commute home, at the pub (bar), and even while visiting a shop itself.
Yet, before merchants rush to implement a mobile channel, they need to be aware of what makes this a profitable option.
WorldPay research has found that convenience is the top of consumers’ wish lists when shopping on a mobile device.
39 per cent of those surveyed were frustrated by the length of the transaction process when buying via their mobile, and 38 per cent were irritated by the amount of information they were required to provide the retailer.
A QuBit report in December 2011 also found that UK retailers are estimated to lose £4 billion because they provided users with basic e-Commerce sites which were not optimised for mobiles.
As such, the challenge merchants need to address is usability. For m-commerce to truly take off, the benefits of purchasing on a mobile device have to outweigh the associated challenges and risks.
Consumer expectations of an m-commerce purchase are high because they are already used to an advanced level of experience in the e-commerce space.
Mobile commerce for consumers is all about convenience. As with any retail strategy, consumers lie at the heart of it being a success.
Retailers need to provide the simplest possible route from purchase decision to completed transaction.
Whilst ease of use and user experience will drive m-commerce, security remains an important factor.
Merchants need to thoroughly consider the security of their m-commerce solution against overall usability.
Merchants are aware that different channels carry different fraud challenges but need to understand how to apply the right strategy to the right channel.
Traditional industry security methods such as the 3D Secure authentication tools such as VerifiedByVisa and MasterCard SecureCode are very difficult to render on most mobile devices.
Risk screening tools can help bridge the gap, by using environmental factors to screen transactions. Additionally companies such as CellPoint and Mobank can offer solutions to enable authentication tools for m-commerce.
We are now at the optimal point at which consumer appetite for m-commerce exists, and the technology exists to make it useable.
If merchants can understand their customer demand, they will reap the rewards from the mobile channel.
Biog: Phillip McGriskin, chief product officer, WorldPay
Phillip has over 13 years’ experience in the online payments sector. He has held positions including director of sales at Neteller and commercial director of Earthport. Most recently Phillip is a founder and CEO of Envoy Services, which has recently been acquired by Worldpay. Phillip has now taken up a position of chief product officer on the ecommerce board of Worldpay.