Finance

Rivals Visa, Mastercard, Amex, and Discover are partnering up for one-click checkouts to compete with the likes of Apple Pay and PayPal as e-commerce booms

  • American Express, Discover, Mastercard, and Visa, have partnered to create a one-click checkout button, called Click to Pay
  • The product launched last October, but the networks are making a renewed push for adoption as e-commerce takes off amid the coronavirus pandemic.
  • It also comes as digital-first competitors such as PayPal and Apple Pay have seen their market share continue to grow. 
  • Since its launch, Click to Pay has been adopted by over 10,000 merchants, including Crate & Barrel, Expedia, and Fresh Direct.
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As e-commerce booms and consumers shift their spending online, rival credit card networks are making a renewed pushed for a one-click checkout product created to compete with digital-first competitors.

The Click to Pay product, created by American Express, Discover, Mastercard, and Visa, is meant to replace guest checkouts for online stores. Consumers can enroll in Click to Pay, then at participating merchants, buy with one click. Shoppers don’t need to enter billing or shipping information.

Click to Pay isn’t new — the networks announced its launch in October last year — but as the coronavirus pandemic has driven more attention to online shopping, the networks are making a new push to drive adoption.

“As the world becomes more digital, there is more need than ever for a simple, streamlined online checkout,” Matthew Robinson, EVP of network solutions and operations at Amex, told Business Insider.

Since its launch last year, over 10,000 merchants have integrated the Click to Pay button into their checkouts, including Crate & Barrel, Expedia, and Fresh Direct. And for issuers, Amex has already signed on, as well as Citi, meaning all of their customers can enable their cards on the Click to Pay platform.

And now, the networks are making a global push to roll out the checkout button in new markets, including Australia, Brazil, Canada, and the UK.

Read more: A Mastercard exec lays out how a surge in contactless payments is giving the company an unexpected boost as people rethink touching cash

Sometimes, the card networks partner to defend their turf

To launch Click to Pay, the networks are working together via an industry standards body called EMVCo, which has also worked to establish other market-wide changes like the switch to chip-enabled credit cards.

Card networks had developed their own versions of one-click checkout buttons, like Mastercard’s Masterpass and Visa Checkout. But for merchants, integrating a button for every network, in addition to other payments options like Apple Pay and PayPal, is cumbersome.

So as Click to Pay has been rolled out, networks have begun transitioning merchants to the industry-wide product in lieu of their own.

“[Merchants] were clamoring for a solution that is seamless, and that allows them one integration to take as many cards as possible,” said Jorn Lambert, EVP of digital solutions at Mastercard.

The concession is acknowledgement of the progress made by digital-first competitors such as Apple Pay and PayPal. And while Apple Pay and PayPal’s total transaction volumes pale in comparison to giants like Visa and Mastercard, they’re growing fast. PayPal, for one, saw record highs in daily transactions and new account sign ups from merchants and consumers alike amid the coronavirus pandemic. 

For the networks, having one standard processing hub online is similar to what already exists in-store, where multiple cards can be accepted on one physical point-of-sale.

“The idea behind Click to Pay is to bring the fast, easy, secure checkout experience that exists in the physical world today to the online stores with one single digital terminal,” said Ansar Ansari, SVP of digital solutions at Visa.

“Merchants want to keep it simple,” said Amex’s Robinson. “They don’t want to have their webpage cluttered with lots of different solutions. If we can have one industry-wide solution that provides clarity for the merchant, but also simplicity for the consumer, then that’s what EMVCo is striving to do.”

Read more: Contactless cards have arrived in the US, and networks are betting on transit to drive adoption. We asked execs at Mastercard, Amex, and Visa why it took so long.

In addition to the traditional guest check-out options for e-commerce purchases, PayPal and Apple Pay have integrated into merchant’s check-out windows. But there are limits. Apple Pay, for one, can only be used by iPhone users and, when shopping online, via Apple’s Safari browser.

“We are not tied to a specific ecosystem, to a specific operating system, or to a specific browser. This is designed to work in-app and on any type of browser,” said Lambert.

Click to Pay could help smaller merchants compete with giants like Amazon

With many large online retailers, like Amazon and Walmart, shoppers can create accounts and store their payment and shipping information, leading to a seamless checkout.

But for smaller merchants, shoppers could be less likely to create accounts and leave a card on file, instead opting for the manual guest checkout option. Click to Pay aims to solve that problem, and put smaller shops on level footing with established players.

And the credit card giants aren’t the only ones eyeing a more universal, password-less checkout option. Fast, the startup backed by Stripe, Index Ventures, and Kleiner Perkins, is also building a one-click checkout product. 

Fast sees Apple Pay as its biggest competitor, but thinks that the limitations of where it can be used have left white space for disruption, Business Insider has reported.

Andrew Hopkins, SVP of global products at Discover, highlighted the problems that come with a more manual checkout. 

“That creates abandonment, because consumers are leery of going in and putting in credit card information for very small merchants,” he said. 

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