Amazon has changed shopping expectations. Look no further than its patented one-click button for checking out.
Now, PayPal wants to even the playing field with its own one-stop checkout button. While PayPal has been available as a checkout option for merchants for years, and PayPal’s One Touch lets customers stay logged in so they don’t have to enter payment information again, PayPal’s “smart buttons” put the customer’s most relevant payment vehicles to the front of the merchant checkout platform.
A clunky online checkout process is the reason for a high rate of cart abandonment. In other words, Amazon closes sales better because it’s just easier.
Brendan Miller, principal analyst at Forrester Research, said cart abandonment rates are as high as 60 percent. PayPal’s “smart buttons” attempt to make that easier.
“[Consumers] are abandoning transactions a lot of times, especially on mobile checkout when it’s complicated and there are too many fields, options and details,” he said. “This is about helping retailers that are competing with Amazon to make their checkout faster and more convenient.”
A key part of PayPal’s pitch to merchants is the ability to add Venmo as payment option. While Venmo is already accepted by 2 million online retailers, including Grubhub, Seamless and Williams Sonoma, adding Venmo as default payment option makes that integration easier for smaller merchants and Venmo only appears when it’s relevant to users’ behavior.
Venmo offers merchants a unique opportunity to reach younger customers through their enthusiastic use of the platform, and possibilities to amplify brands through its social feed, said Bill Friend, vp of Fluent Commerce, a company that develops e-commerce platforms for merchants.
“Venmo is important for millennials and Generation Z — if you don’t support it, it could be a reason for them not to shop on the site,” he said.
For smaller online merchants, PayPal’s seamless checkout theoretically lets them avoid Amazon dependence by offering an on-site checkout experience on par with Amazon’s.
“It’s a path to the market that doesn’t go through Amazon,” he said. So while Amazon may make it easier for merchants, there’s also the looming threat of Amazon cannibalizing retailers’ business.
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