CNP Expo: In-App Payments All About Customer Experience

May 22, 2013

Merchants these days are working to make mobile payment options available to their customers, outside of simply mobile wallets. One already existing option is in-app mobile payment—that is, a payment that takes place within the merchant’s own app, rather than happening outside of that environment on a Website or via an app store.

Jumio’s Michael Orlando gave the example of the Lowe’s app, which allows customers to shop both in the company’s online store and in the physical store by scanning items as they walk through the store, and then a sales associate will collect your items while you pay through the app.

This can be an amazing experience for the customer, but in-app payments are not without their challenges. Those challenges include the “form factor” and security. The form factor refers to the experience of filling out a form and going through multiple screens to make their payment. In a typical online transaction, abandonment increases exponentially with every screen a customer has to click through. This holds true for in-app purchases, with the added aggravation of filling out these forms on a tiny screen. Rey Pasinli of Total Apps Inc. points out that in-app purchases without a one-click purchase process have only a 10 percent conversion rate.

Security is the other significant obstacle for merchants looking to adopt an in-app purchase model. On the one hand, Pasinli noted that fraud prevention can be enhanced because you can pinpoint a phone’s location, and if that doesn’t match the shipping or billing address, you can call the customer to confirm that their phone has not been stolen. On the other hand, mobile devices are easy to lose and easy to hack, and as e-commerce on mobile devices grows, fraudsters are finding new ways to take advantage, and merchants will need to explore ways to enhance mobile security.