Consumer & Commercial Payments
August 30, 2024
Why it’s time for more issuers and merchants to embrace the future of eCommerce
eCommerce is still booming. Online and mobile shopping is predicted to account for over 38% of total retail sales in the UK in 2025, up from 32.5% in 2020.[i] But here’s the real story. Most merchants should generate much higher business levels from their eCommerce platforms. What’s more, the key issues are easy to identify. Even though eCommerce has been with us since the 1990s, many shoppers still find the checkout process slow and frustrating. On top of that, many people simply do not trust online merchants to store and manage their payment card details safely.
Consider a few statistics. Over 70% of online shopping carts will be abandoned worldwide in 2024. Of those, 26% of shoppers do not want to create a new account. A further 22% do not trust the site with their payment credentials, while 22% blame a checkout process that is simply too long.[ii]
In many cases, there is a straightforward answer to all these problems. In 2017, EMVCo, the global technical body for card-based payments, defined a framework for all payment networks (Visa, Mastercard, Amex and Discover) to create a universal and speedy checkout experience. Today, millions of shoppers worldwide know that the framework is called click-to-pay.
Keeping it simple
Like most good ideas, the principles on which click-to-pay is built could not be more straightforward. The aim was to create an online checkout process that is as simple as ‘tap and pay’ in-store. As the name suggests, Click-to-pay offers shoppers a one-click checkout journey.
With click-to-pay, consumers can store and use their payment credentials safely, simply, by registering their cards in a click-to-pay profile. Merchants that have integrated click-to-pay within their checkout process can automatically recognise these shoppers on their websites via the user’s trusted device. Furthermore, the merchants can offer these customers the benefits of a smooth, one-click checkout using nothing more than their click-to-pay profile. That means customers do not need to laboriously enter their payment details with every online merchant they visit – as long as those merchants have enabled click-to-pay.
Safety first through tokenisation
Click-to-pay is not just faster and more convenient; it is also much safer. Thanks to the process known as tokenization, payment card information is converted into a unique identifying number (or token) for each click-to-pay transaction. The original card details are not exposed during the transaction, making it virtually impossible for criminals to steal information that could be used fraudulently.
Everyone benefits from click-to-pay
Click-to-pay is already available in 27 countries and is expanding relentlessly as more issuers embrace the concept. That’s good news for everyone. Click-to-pay delivers compelling benefits throughout the eCommerce ecosystem:
Customers enjoy a faster and safer checkout experience—and it’s much easier on the fingers! There’s no need to continually enter payment card details across mobile and online channels alike.
Merchants suffer fewer abandoned carts and can integrate click-to-pay easily within their existing checkout process. Click-to-pay is also potentially cheaper than other proprietary one-click solutions.
Card issuers benefit from higher card authorisation rates and a reduction in fraud. With click-to-pay, they can also support the wider shift towards secure tokenised payments.
Mastercard’s recent announcement that it will phase out manual card entry for eCommerce transactions in favour of click-to-pay in Europe by 2030 shows exactly where the market is heading.[iii] This was closely followed by Visa’s announcement that biometrically-enabled passkeys will be employed to further enhance the click-to-pay experience.[iv] In addition, payment networks are working with issuers, merchants and payment service providers to achieve compliance with their mandates for the implementation of click-to-pay in a number of countries, including the UK, by October 2024. Further countries will follow in 2025.
Thales D1 accelerates the revolution
Thales is at the heart of the click-to-pay revolution. Card issuers that choose Thales as their modern card issuing partner and connect to the D1 cloud-native platform can meet all the requirements and mandated dates set by payment schemes via a ‘plug-and-play’ click-to-pay solution. Crucially, D1 will also ensure that these issuers automatically keep pace with new versions and variants of click-to-pay as they emerge. In the years ahead, click-to-pay will bring many new technical standards and obligations. Thanks to D1, card issuers can avoid any stress and complexity when implementing and maintaining compliance with payment networks’ requirements, both now and in the future. Development and investment demands are kept to an absolute minimum.
D1 simplifies onboarding with one single integration into your existing payment infrastructure as a modular platform. Once connected, a wide array of advanced tokenization, real-time card services, and management controls, including click-to-pay, that meet the desired physical and digital card user experiences demanded today are easily accessible while ensuring complete and rapid compliance with industry regulations.
Where next?
With the payment networks’ mandates now in place and more merchants offering a one-click checkout experience, click-to-pay will undoubtedly be a hot topic over the next 12 months. Adoption is on an upward curve and will continue to break down the barriers to sustained growth in eCommerce sales worldwide.
To find out more about Thales D1 and click-to-pay, click here
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