Pain points and friction associated with making mobile payments remain some of the largest barriers to growth in mobile commerce (m-commerce), according to a new Forrester study reported on by Mobile Marketer last week.
Challenges in payments could be poised to become a long-term issue for merchants. Mobile shopping is on the rise, but payments aren’t becoming easier. Business Insider Intelligence expects US m-commerce payments volume to grow from $105 billion last year to an estimated $387 billion in 2023.
But a number of customers are still finding that mobile sites don’t offer the same functionality as desktops, or that they aren’t optimized for shopping.
That’s creating friction, as over half of consumers don’t make purchases on their phones because it’s less “cumbersome” to enter payment information on computers, while nearly one-third find that mobile device screens are still too small to navigate the checkout process. This, in turn, is leading to consistently low mobile conversion rates.
If these hurdles persist, they could ultimately impede m-commerce growth. Though volume increased from 2016 to 2017, Forrester found that the percentage of US online sales made via mobile fell from 43% to 36%, largely because of these hurdles.
This dip could signal that friction in the process is prominent enough that it’s discouraging customers from forming habits around mobile shopping, instead pushing them toward using it for specific purchases on specific sites or for emergencies only. If that persists and share continues to diminish, we could see a slowdown or reversal in expected m-commerce growth, according to Mobile Marketer.
This should be a big red flag for payment providers counting on m-commerce for growth, but it also represents a big opportunity. These friction points aren’t new — they’ve been the major issues with m-commerce for years — but their impact is magnifying as they continue to persist despite evolution in m-commerce. With payments providers counting on rising m-commerce as both a major volume source and a way to onboard and engage customers, the issue they represent is becoming more severe.
But it’s also an opportunity, because the firms that can most effectively build or alter their solutions to resolve these pain points could rapidly rise to the top, whether they choose to further streamline checkout, reduce clutter on the page, better mimic the desktop shopping experience, or something else entirely.
PayPal is already beginning to do this — its offering boasts a conversion rate almost double the average — and the forthcoming unified buy button from major card networks could as well. But other firms should follow their leads, or they could risk losing out due to diminishing m-commerce growth.
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