The fight to get aw­ful mo­bile ecom­merce up to scratch

Irish Independent - Business Week - - TECHNOLOGY -

WHY is it still so hard to buy things on a mo­bile phone? Why are check­out pro­cesses so lengthy and glitchy? We’ve all had the awk­ward, ugly ex­pe­ri­ence of try­ing to process a ba­sic web- pur­chas­ing trans­ac­tion on a smart­phone. What should be a 30-sec­ond process of­ten turns into five min­utes and sev­eral reloads.

The blame can be shared be­tween re­tail­ers’ un­friendly mo­bile web­sites, ar­chaic pay­ments in­fras­truc­ture and a lack of innovation by banks and pay­ments com­pa­nies.

The re­sult is a slew of in­dus­try fig­ures show­ing sky-high aban­don­ment rates among those try­ing to buy some­thing on­line. ‘ Mo­bile con­ver­sion’, in in­dus­try jar­gon, on mo­bile phones is less than half that on PCs.

It’s a par­tic­u­lar prob­lem for Ir­ish busi­nesses. This week’s Euro­pean Com­mis­sion Dig­i­tal Score­card re­port shows that Ir­ish small firms are the most ac­tive in Europe in sell­ing on­line and across bor­ders.

But with 50pc of con­sumers now de­fault­ing to their phones in­stead of PCs for on­line brows­ing, and bil­lions around the world ex­pe­ri­enc­ing their first in­ter­net ses­sion on a phone, what can Ir­ish firms now expect?

“This is the most press­ing prob­lem the in­dus­try faces,” says Juan Ben­itez, chief tech­nol­ogy of­fi­cer of Brain­tree, a sub­sidiary of PayPal.

“Mo­bile is by far the pri­mary plat­form for con­sumers, but only 10pc of com­merce is done on mo­bile. And there’s a con­ver­sion rate that’s three to four times more dif­fi­cult.”

Ben­itez was in Dublin re­cently to talk to Ir­ish com­pa­nies about the is­sue. Brain­tree is the main com­peti­tor to Stripe, the pay­ments com­pany founded by Lim­er­ick broth­ers Pa­trick and John Col­li­son. The PayPal sub­sidiary has huge global cus­tomers that in­clude Uber, Airbnb and Pin­ter­est.

It should be easy to buy via a mo­bile phone, but it’s not. Adrian Weck­ler meets a man with a plan, Stripe ri­val Juan Ben­itez of Brain­tree

Brain­tree is tack­ling the mo­bile conundrum in two ways. It is de­vel­op­ing so­cial me­dia pur­chas­ing but­tons as well as its own ‘ buy now’ but­tons that any­one with an app or a mo­bile web­site can in­te­grate.

“Our first foray into this was last year with buyable Pins,” says Ben­itez. “We went fur­ther last au­tumn when we ac­quire Mod­est. This aims to solve the ex­pe­ri­ence of re­tailer. So we can let a re­tailer put a buy but­ton onto a na­tive app or a web­site and now in emails too. We think that email is un­der­used. We all get emails, but you have to click the link in the email, get redi­rected and some­times you don’t get deep-linked prop­erly. Check­out some­times drops off along the way.”

Ben­itez says that all of this will be avail­able to Ir­ish and Euro­pean busi­nesses “later this year”.

“You’ll be able to click on the link and be taken to a check­out ex­pe­ri­ence,” he says.

Brain­tree isn’t the only one rac­ing to pro­vide bet­ter mo­bile pay­ments sys­tems.

Stripe re­cently in­tro­duced its Re­lay ser­vice, which lets peo­ple buy things in apps and so­cial me­dia ser­vices such as Twit­ter and Face­book. The Stripe ser­vice is be­ing used by giants such as Adi­das and Best Buy, while Twit­ter is pitch­ing it as one of the fea­tures that could help lift it out of its malaise.

Ben­itez says that com­pe­ti­tion is healthy. But he has his own slant on who’s ahead. “One of the things that we’re able to do is to har­ness the ca­pa­bil­ity of Paypal’s 184 mil­lion con­sumers,” he says. “And 14 mil­lion mer­chants. No one on any of the other mod­ern plat­forms has that breadth. We re­cently an­nounced over $ 50bn of pay­ments made in 2015, up from $13bn a cou­ple of years back. By that met­ric alone, we’ve grown the busi­ness by more than four times. The power of Brain­tree and PayPal is what dif­fer­en­ti­ates us.”

But it’s not just Stripe that Brain­tree is in com­pe­ti­tion with.

“There are also a lot of legacy com­pli­cated, un­re­li­able sys­tems out there,” says Ben­itez.

“The re­al­ity is that lots of ecom­merce is still pow­ered by legacy sys­tems that aren’t great. They can’t help you con­nect to that many con­sumers and they can’t fu­ture­proof you.

“They just don’t solve any of the prob­lems, reg­u­la­tory is­sues or con­tex­tual com­merce is­sues that we think are go­ing to change the in­dus­try as much in the next three to five years as much as mo­bile has in the last three to five years.”

What about al­ter­na­tive pay­ment sys­tems such as Ap­ple Pay or Sam­sung Pay? In­dus­try fig­ures show that these have been slow to gain adop­tion among ev­ery­day shop­pers.

Ap­ple is cur­rently ramp­ing up in markets where peo­ple are more com­fort­able with so- called con­tact­less pay­ments. In Ire­land, such pay­ments are es­ti­mated to be a small per­cent­age of the mar­ket ac­cord­ing to the last pub­lished fig­ures from Visa.

But suc­cess is mixed. In the US, 17pc of peo­ple who own newer iPhones have tried Ap­ple Pay, an in­crease from 9pc in 2014, ac­cord­ing to a re­cent sur­vey by Pym­nts and In­foS­cout, a con­sumer re­searcher. The sys­tem can now be used in over 2m lo­ca­tions, in­clud­ing re­tail chains such as Crate & Bar­rel, Chick-fil-A and Au Bon Pain. Adop­tion of Ap­ple Pay has been faster in Britain and North­ern Ire­land than in some other Ap­ple Pay coun­tries due to a 40pc iOS phone mar­ket share and agree­ments with mer­chants such as sand­wich chain Pret A Manger and Twick­en­ham Sta­dium.

Glob­ally, mo­bile pay­ments are pre­dicted to in­crease to €550bn this year, up from €400bn in 2015, ac­cord­ing to a re­port from TrendForce. Mean­while, eMar­keter es­ti­mates that the to­tal value of trans­ac­tions made by tap­ping a phone on an in-store ter­mi­nal will reach €190bn this year, up from €8bn in 2015.

Sam­sung Pay is ex­pected to ex­pand its ser­vices in more coun­tries this year, with Britain and China topping its list. The pay­ment ser­vice is not ex­pected to de­but in Ire­land this year.

Here in Ire­land, bus and rail trav­ellers might soon be able to pay for their fares by swip­ing their smart­watch or mo­bile phone, ac­cord­ing to plans pub­lished by CIE.

The semi-state trans­port com­pany is to up­grade its IT sys­tems with a view to ac­cept­ing new forms of pay­ments, in­clud­ing Ap­ple Pay, Sam­sung Pay and Stripe. Ap­ple Pay and Sam­sung Pay are used by swip­ing Ap­ple and Sam­sung smart­watches and phones.

While nei­ther dig­i­tal pay­ment sys­tem is yet avail­able in the Ir­ish mar­ket, CIE wants to make its new sys­tems com­pat­i­ble with the pay­ment meth­ods. It is also eyeing al­ter­na­tive pay­ment sys­tems such as An­droid Pay, Masterpass and Visa Check­out.

CIE is one of the com­pa­nies that has to find some al­ter­na­tive to ex­ist­ing sys­tems.

“Tra­di­tion­ally the con­sumer has to en­ter in a 16 digit num­ber and ex­pi­ra­tion date, which is almost im­pos­si­ble to do on a mo­bile de­vice,” says Brain­tree’s Ben­itez.

His com­pany’s pur­ported an­swer is Paypal’s One Touch.

“One Touch makes it so that you only have to log into one time and then you have a per­sis­tent ses­sion,” he says.

“I can walk be­tween f lights or to the train and we’re all buy­ing things with a thumb.

“This is live across all plat­forms and de­vices and 200 markets – 21 mil­lion con­sumers that have opted into that ex­pe­ri­ence.”

‘Mo­bile is by far the pri­mary plat­form for con­sumers, but only 10pc of com­merce is done on mo­bile,’ says Juan Ben­itez, pic­tured right, with fel­low Brain­tree ex­ec­u­tive Klas Back

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