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Source: Internet Retailer Internet Retailer

The most important development in mobile commerce this year?

Published: 08 Dec 2014 19:18:19 PST

Lost in the Apple Pay in-store payments free-for-all is the fact that a handful of merchants are integrating one-touch mobile checkout via Apple Pay in their shopping apps. That’s a development that could have far-reaching effects on m-commerce and e-retail overall.

Lead Photo

How one-touch checkout via Apple Pay will look in the Groupon mobile app.

Yes, yes, you can use your iPhone 6 or iPhone 6 Plus to pay for merchandise in stores by merely touching the home button while you’re near a cash register. Huge ramifications for the slumbering mobile payments market. But there’s something else happening that could have a far greater impact on e-retail, for all merchants, not just those with physical stores.

Earlier this year, Apple Inc. reached out to companies with highly successful mobile apps and asked them if they would like to be the first to integrate into their apps one-touch checkout via Apple Pay and the iPhone 6 and 6 Plus biometric fingerprint scanner. Not surprisingly, 10 big mobile players said yes. The businesses include Groupon Inc., Target Corp., MLB.com, OpenTable, Instacart, Panera Bread, Sephora USA Inc., Starbucks, Tickets.com and Uber. Apple in the summer made available the Touch ID application programming interface, or API, for integration with Apple Pay to any developer, so any retailer can use one-touch; Apple Pay debuts next month.

The biggest hurdle to even greater sales via smartphones and tablets, especially smartphones, is cumbersome checkout on small screens, mobile commerce experts agree. Enabling consumers to check out on smartphones with just one touch of a finger could shift many sales that today occur on desktop PCs to smartphones, experts predict.

“We’ve already spent tons of time and energy making mobile checkout as seamless and easy as possible, which is why more than 50% of our transactions occur on mobile devices; however, with Apple Pay one-touch checkout for mobile apps, Apple has truly changed the game,” says Don Chennavasin, head of mobile at Groupon, whose app has been downloaded more than 92 million times, the company reports. “On a scale from difficult to easy, Apple one-touch is the easiest, not to mention very secure. We’re witnessing the evolution of mobile commerce.”

Chennavasin has no doubt that Apple Pay one-touch will significantly increase Groupon’s mobile conversion rate, cannibalizing sales from desktop PCs, where many mobile shoppers today complete purchases started on mobile devices. However, he adds, he prefers to think of this not as “cannibalization” but as a “natural transition” from desktop to mobile. Groupon Goods is No. 11 in the newly published 2015 Internet Retailer Mobile 500.

Another hugely successful mobile retailer that soon will debut a version of its mobile app with Apple Pay one-touch is Target, No. 37 in the 2015 Mobile 500. More than two-thirds of online traffic to Target is mobile, the retailer reports.

“Apple Pay one-touch clearly will make it easier than ever to shop the Target app, which is squarely what we’re focused on, making shopping on mobile and in digital overall as easy and seamless as possible,” a Target spokesman says. Apple stores payment information; no customer-identifiable information is stored on iPhones or transmitted to merchants. “For Target app users who have an iPhone 6 or 6 Plus and an Apple Pay wallet set up, they will see an express checkout button on product detail and shopping cart pages. They press that button, then touch the home button on their device, which recognizes their fingerprint. The purchase is complete.”

Groupon, Target and Apple declined to comment on whether Apple will receive a cut of sales or a fee per sale for mobile shoppers who check out with Apple Pay one-touch. One mobile commerce expert at a retail organization told Internet Retailer on condition of anonymity that he did not think Apple was banking on making money from one-touch checkout.

Amazon.com Inc. has enabled one-touch mobile checkout for registered customers since 2009, one big reason it’s the No. 1 retailer in mobile commerce, according to the 2015 Mobile 500. Amazon’s one-touch system does not use biometric security technology.

Follow Bill Siwicki, editor of the 2015 Internet Retailer Mobile 500 and managing editor, mobile commerce, at Internet Retailer, at @IRmcommerce.

September 18, 2014, 1:15 PM
By Bill Siwicki Managing Editor, Mobile Commerce

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