Why One-Click Payments?
Faster checkouts are good for business. People hate waiting, as recent research clearly shows. Two out of ten consumers in Europe abandon a purchase if it takes longer than a minute to complete the checkout.
It can be frustrating for customers to fill up their payment details each time they shop online, particularly when they are repeat customers or are making recurring payments. Slower loading time on checkout further adds to the stress.
This is where a shorter checkout process could make a big difference. When customers get the option to pay with a single click in seconds, they are more likely to complete the purchase. Fewer clicks translate to more sales and happier customers.
One-click payments allow your customers to complete their checkout faster. When a customer shops from you for the first time, you verify and store their payment data and shipping/ billing info. Of course, this is with their full permission.
The next time they shop from you, they do not have to waste any time re-entering their details again. All they have to do is select an item, add it to their cart, and checkout. Since all the info is already shared with you, the single-payment feature auto-fills the details and completes the checkout. This makes the whole process frictionless and super-fast.
One-click payments increase your overall conversion rate and improve customer experience. Just ask Amazon; they made millions out of one-click checkouts.
What is Tokenization, and what are Tokens?
One-click payments are powered by tokens. A token is a unique string of numbers that are generated based on the cardholder’s primary account number. The token converts the sensitive card data into non-sensitive data. This process is called tokenization.
When a customer shops with a merchant for the first time, their card data is encrypted and converted into a token by the merchant’s payment service provider. This token represents their card payment data and can be used in the place of card data to make transactions. This token is then sent back to the merchant by the payment service provider in real-time.
The next time the customer buys something from the merchant, they do not have to enter their payment details again. The merchant can reference the token and process the payment immediately. To maximize security, merchants can ask the customer for their authentication code. Thus, the customer can complete the checkout quickly with one click.
In this entire process, the merchant does not have to store or process any sensitive payment data. The payment service provider does it entirely. This helps to keep both the merchant as well as their customers safe.
How Do Tokens Help in One-Click Shopping?
Tokens and tokenization play a critical role in one-click shopping and for recurring payments and billing. Thus, a merchant can make the checkout process much faster for their repeat customers. It allows for a hassle-free checkout process which works wonders for customer delight and convenience.
Tokens make the one-click shopping experience possible. Because customers do not have to re-enter their card details every time they shop, they are more likely to complete a purchase, especially with impulse buys. The use of tokens also removes errors, especially those related to feeding in incorrect card details. As a result, lesser transactions get declined. This helps to improve the overall conversion rate and boost sales.
Merchants can use tokens to process recurring payments, for instance, subscriptions. Every time a customer makes an initial subscription payment, a token is created based on their card details. Using this token, the merchant can easily process all payments in the future without having to ask the customer for additional info.
Tokens can also be used to make zero amount transactions. A zero-amount transaction is used when a merchant needs to verify a customer’s card details but does not charge them during the initial transaction. In such cases, the card details are verified and converted into a token. The merchant uses this token to charge the customer the due amount later.
How can a payments service provider help you to set up One-Click Payments?
You can work with a global payment service provider to better understand how you can use one-click payments for your business. They can help you set up one-click payments so that you can make your checkout process much faster and seamless for your customers.
Look for a payments partner who can help you to be flexible when designing your payments. This, in turn, helps you to offer the best to your customers. Ensure your payment service provider gives you robust security tools that keep transactions secure. They should offer proper documentation and step-by-step guides that help you to set up one-click payments for your online shop. Risk management capabilities that use AI and machine learning are also desirable.
Finally, the right payments partner will understand your business and provide the right counsel. They will offer you long-term support and help you win your customers’ loyalty.
Jose Augustine is the Chief Business Development Officer at Novalnet AG with extensive experience in European payment industry and a knowledge powerhouse.