Shopping on the small screen is about to get bigger.
This week, Apple said it would bring Apple Pay to the web this fall, helping users make purchases on mobile and desktop sites with the touch of a finger.
On-the-go browsing has skyrocketed in recent years, but completed purchases on mobile sites haven’t kept up, leaving retailers with abandoned carts and customers exasperated, unwilling in most cases to download a separate app for each brand.
By bringing Apple Pay out of apps and into any Safari e-commerce site on iPhones, iPads and Macs, Apple will expand the potential reach of a smooth and secure mobile checkout.
“This is a game-changer,” said Dileepan Siva, chief revenue officer of Moovweb, a mobile web and checkout specialist.
Retailers are eager for solutions that make sense to customers. Coach was quick to say it would bring Apple Pay to its web site. Chief executive officer Victor Luis said Apple was at the “forefront of innovation” and that, “at Coach, innovation is key and we are always making sure we are ahead of what’s next to provide a more seamless and secure shopping experience for our customer.”
The service on the web works like any other Apple Pay transaction. Purchases both on the desktop and mobile require an iPhone 6 or an Apple Watch, since transactions are authenticated using Touch ID on an iPhone 6 or the watch. Rather than store card numbers, a user’s device is assigned a device account number and each transaction is authorized with a one-time dynamic security code. Apple Pay defaults to the address saved in a user’s account info.
Siva said that was key since the Apple Pay flow is closer to 10 seconds, compared to the 90 seconds or so it takes to check out on most big retailers’ sites.
“The checkout process is the most painful thing, but Apple has all that data already stored,” he said. “That is a massive shift for commerce, and mobile commerce in particular.”
PayPal ceo Dan Schulman told WWD recently that mobile devices had begun to overtake personal computers in commerce. “This offers tremendous opportunity for merchants to connect with consumers,” he said. “But the real problem is that actual conversion is much lower than on a desktop; there is this huge drop-off. It’s a scary thing.”
Streamlined checkout products that automatically input payment information already exists from major players, including Google, Visa, Amazon, MasterCard and PayPal.
Two years ago, PayPal introduced One Touch, which automatically authenticates a customer and imports purchase details, on a chosen device for up to six months. Schulman said it is the fastest-growing product that PayPal has launched and that is has more than 22 million people using it.
It’s also probably the most direct competitor Apple Pay will face on the web. In a statement responding to the Apple news, PayPal said it welcomed developments that help move people away from “the awkwardness of cash,” and emphasized that it works with Apple to help people make purchases on apple.com and iTunes, in addition to providing credit services and allowing merchants to accept Apple Pay transactions on Braintree.
“PayPal is much more than a way to checkout online or digitally pay back your friends,” the statement said. “PayPal is committed to our vision of reimagining money and we have deep and long-running partnerships with many players in the ecosystem, including Apple.”
Experts said the scale and ubiquity of Apple and iPhones would help it build market share quickly. “The biggest difference between these [other payment systems] and Apple is that they don’t have 600-plus million user accounts already,” Siva said.
An Apple spokesperson did not share specific numbers, but did offer that momentum for Apple Pay is growing at “a tremendous pace” in the U.S. and globally, and with transaction volume increasing fivefold over a year ago and one million users joining each week.
There’s also the value of using biometric data — a fingerprint — to authenticate a payment. “Banks, retailers and consumers desperately want a way to make online shopping safer, and integrating Apple Pay’s fingerprint sensor technology is an important step toward doing just that,” said Creditcards.com analyst Matt Schulz. “Adding EMV chips to credit cards made it safer to use your card in person at the checkout counter but didn’t help at all with online purchases. Biometrics are the future of credit card security.”
Already, mobile is the talk of commerce, said Rick Kenney, head of consumer insights at Demandware. “Everything is growing because of mobile,” he said, attributing the boost to larger phones and faster networks. He predicted phones would overtake computers as the shopping device of choice by 2017.
According to Demandware research, mobile phones account for 45 percent of digital commerce traffic and have become the top traffic driver. That’s a big change from 2013, when mobile accounted for 18 percent of traffic.
Despite that growth, mobile orders account for only 25 percent of web transactions.
As Apple Pay helps to improve the mobile browser checkout process — essentially making it more reflective of the smooth experience in a retailer’s app — retailers might be tempted to abandon app investment in favor of their mobile site.
Siva said retailers should primarily invest in the web instead of apps, pointing to shopper frequency. “If you’re a brand and a shopper buys from you once or twice a year, the likelihood of app download is lower,” he said. “But larger retailers — the big guys we hear about all the time — they see higher shopper frequency, so they invest in those apps.”
For brands, he said, apps can provide marketing-minded benefits beyond purchasing.
Forrester analyst Julie Ask said apps are still important, but that consumers spend 84 percent of their time on only five apps, with retailers tending to claim only 4 or 5 percent of mobile moments.
Still, the best experience for loyal customers will likely come through an app. “The mobile web accommodates the longer tail of your customers — those who shop less frequently — so [Apple Pay] makes the mobile web more viable as an alternative.”
And that ability to mimic the efficiency of apps, agreed Forrester analyst Sucharita Mulpuru-Kodali, is why enabling Apple Pay on the mobile web is “a huge deal.”
Apple is already working with e-commerce platforms including Demandware, Shopify and IBM, whose clients have more than 250,000 web sites. Demandware and Shopify will make it available to all clients.
In addition to Coach, merchants including Warby Parker, Condé Nast, Etsy, Expedia, Fandango, JetBlue, Lululemon, Nike, StubHub, Target, Under Armour, United and The Wall Street Journal have already signed on.
For a retailer to use Apple Pay on their web site, they must have an Apple developer account and comply with Apple Pay guidelines, and any pages that incorporate Apple Pay must be served over HTTPS.
“Our role at Demandware is to extend commerce to wherever the shopper is,” said Elana Anderson, the firm’s senior vice president of marketing. Demandware works with a number of major brands, including Tory Burch, Nine West, L’Oréal and Adidas. “In the last year, mobile has become the consumer’s number-one choice for shopping.” By enabling Apple Pay on their Demandware storefronts, she said, merchants will be able to offer a frictionless checkout experience that easily converts traffic into sales.
Lon Binder, chief technology officer of Warby Parker, which offers Apple Pay on its app, said, “We consider Apple a like-minded company, from their best-in-class customer service to the fact that innovation is at the core of everything they do.”
Although a seamless checkout is arguably the key differentiator in a successful mobile shopping journey, experts see a few more areas of improvement for retailers.
Kenney commended Urban Decay for its mobile web site tactics and rich imagery, and Cole Haan for its app experience. He also recommended that retailers connect shoppers across visits and devices.
A Forrester report found that 52 percent of a shopping audience found it annoying to “pinch and zoom” a web site. To that end, Siva said, retailers should not just shrink their web site to fit on a phone.
But ultimately, slow checkout times are what cost retailers money.
By way of example, Kenney pointed to the shopper browsing a phone while waiting for the train. “The challenge is the train shows up pretty quickly, so if you put a bunch of steps in the way, there is no way they can complete that purchase,” he said.