PayPal Rolls Out One-Touch Mobile Checkout For Apps
Mobile commerce today is still challenging with complicated checkout flows that see users bouncing between screens, and having to tap out their personal information on tiny screens and keyboards. PayPal today is hoping to change …
Context & Ripple Effects
This launch closes a loop PayPal has been building since 2011, when its early mobile-wallet acquisitions telegraphed where the company thought payments were headed. The consumer-facing redesign refreshed the brand in 2012, but the digital wallet app reviewers called powerful yet baffling made clear that friction — not features — was still the unsolved problem in PayPal's mobile story.
The plumbing matters as much as the feature: PayPal closed its acquisition of payments gateway Braintree the year before this SDK-driven rollout, giving one-touch checkout a distribution channel straight into third-party apps. The breadth of pickup — VentureBeat, Re/code, Gigaom, The Next Web, ReadWrite, PandoDaily and others all carrying the same-day story — signals how hotly contested in-app checkout had become by mid-2014.
First-order effects
- Merchants whose apps are wired into Braintree's SDK can now let returning PayPal users complete purchases in a single tap instead of tapping out personal details across bouncing screens — attacking checkout abandonment at its most expensive point.
- The rollout folds into a busy 2014 form-factor campaign for PayPal — fingerprint payments on the Galaxy S5, apps for Samsung wearables, loyalty cards in the iOS wallet, and Pay at Table expanded to the UK and Australia — and moves that push into the highest-volume channel, in-app commerce.
Second-order effects
- Rival wallets and card issuers face pressure to match one-tap convenience or cede the stored-credential relationship with shoppers, while the early-August disclosure that a researcher could circumvent PayPal's two-factor authentication sharpens the security-versus-friction trade-off critics will press.
- App developers get a stronger reason to standardize on Braintree rather than stitch together multiple processors, concentrating mobile payments integration around PayPal-owned rails.
Third-order effects
- Authentication is migrating from typed passwords toward persistent device sessions and biometrics — the direction the Galaxy S5 fingerprint app pointed — which concentrates control over payment identity in a handful of platforms.
- If one-tap becomes table stakes, checkout stops being something merchants build themselves and becomes a capability rented from whoever holds the customer's credentials, restructuring how processors compete for the merchant relationship.
The trend: Mobile payments are consolidating around stored credentials and one-tap flows, with platform owners like PayPal capturing the checkout relationship that merchants and processors used to split.