In Europe, more than 60 percent of e-commerce checkouts are made with payment cards. This, in the process, regularly leads to purchase cancellations and not infrequently to card misuse. If, for example, an online merchant requires customers to register in his store before checkout, he can expect up to 30 percent of purchases to be abandoned. If the checkout process takes too long or seems too complicated to customers, around 25 percent of purchases are abandoned. In addition, the abuse rate in e-commerce is four to ten times higher than at the physical point of sale. Remedial action seems urgently needed here.
Implementation of Secure Remote Commerce (SRC)
With Click to Pay, customers only have to enter their card and address data once when registering. This data is then available for all checkout processes at those retailers who offer the procedure. This eliminates the need to set up separate customer accounts at individual merchants. Another advantage of Click to Pay: the system automatically recognizes customers based on the device (PC, laptop, tablet, smartphone) that the customer is currently using for online shopping – an additional gain in security.
Click to Pay is the implementation of the SRC (Secure Remote Commerce) standard, which was developed by EMVCo as a neutral solution and will replace MasterPass and Visa Checkout. The process works on the basis of tokenization, where the card number is replaced by a token.
Opportunities for merchants and card issuers
For online merchants, Click to Pay offers a whole range of opportunities: by simplifying and speeding up the payment process, the number of successful transactions can be increased and the rate of abandoned purchases reduced. Through tokenization, sensitive personal and card-related data does not end up with the merchant in the first place. This means that the high data security requirements of PCI DSS (Payment Card Industry Data Security Standard) are automatically met for the merchant.
To take advantage of these opportunities, there are a few challenges to overcome: Merchants must first create the technical prerequisites. In addition, they should not only inform their customers that they offer Click to Pay, but also convince them to use the procedure.
For the technical requirements, merchants and payment service providers can use solutions from Netcetera. A Click to Pay SDK (Software Development Kit) is available for the frontend and a Click to Pay Server for the backend. The solutions can be seamlessly integrated into digital shopping applications (DAS) and ensure smooth communication with the card organizations' SRC systems.
For card issuers, the benefits are that registration for Click to Pay can be done through their e- or m-banking. This allows them to enable their customers to pay easily and conveniently by card in all online stores that offer Click to Pay. This is leading to increasing card usage in e-commerce.
Here, too, the challenges lie in creating the technical requirements and informing cardholders and convincing them of the benefits of the new procedure.
For card issuers, Netcetera offers a solution for Click to Pay Card Push Provisioning. The integration can be done in wallet apps or via App SDK or Web SDK. This allows for easy and convenient enrolment for customers.
In the U.S., 13 payment service providers currently support Click to Pay. More than 10,000 online merchants there already offer their customers this procedure. Various pilot projects are planned or have already started in Germany, Austria, and Switzerland this year. The market launch in several European countries is planned for 2022.
Roger Burkhardt: "Click to Pay reduces the complexity of the checkout process for consumers and thus the number of abandoned purchases. This creates interesting new revenue opportunities."