The new “Click to Pay” wallet from the leading card providers offers the consumer little more than what they could already get from longstanding alternatives in the market and is ultimately out of step with the way e-commerce is changing.
Mastercard, Discover, Visa, and American Express are rolling out an online “Click to Pay” standard worldwide after signing up 10,000 merchants in the US since last year. This move brings all of the major international card schemes (or at least all the major Western schemes) under one e-commerce banner, creating a huge network of prospective customers that can be served by a single e-commerce acceptance brand. The problem is that this network already existed and could be tapped into by any merchant that accepts PayPal, Amazon Pay, or any of a wide variety of card-based digital wallets. Click to Pay, thus, offers little that was not already available to either consumers or merchants.
The overall share of card payments in the e-commerce mix is trending downwards in favour of a wide range of wallets and other alternative payment tools (including the potentially transformative instant payment-based services), and as this diversification progresses, the e-commerce market has increasingly required consolidation of payment tool acceptance for merchants to do business, particularly across borders.
Click to Pay does offer a “one-stop shop” for card-based online payments – but it doesn’t touch the burgeoning alternative payment tool market. Compounding this issue is the fact that the consolidation of payment acceptance is already happening online – and it is the processors and payment gateways that are offering it, not the consumer-facing payment tools like Click to Pay.
As online shopping is accelerating and becoming a daily habit more than an occasional activity, major payments services providers are moving to make the experience as seamless as possible. Consumers demand convenience from their online payment tools: according to GlobalData’s 2020 Financial Services Consumer Insight Survey, “simplicity and speed” was the most common reason for online payment tool usage (48% of e-commerce users). To this end, many companies are implementing various one-touch or one-click processes for speedy checkouts; Click to Pay is no different and is merely one such offering among many established brands.
Click to Pay’s marketing claims that its launch is a big step forward. However, the only real thing it has going for it is the scale of its backers. The industry is now well past the point where Click to Pay would have been innovative.