December 23, 2015
Launched by PayPal at the beginning of 2015, One Touch has seen significant growth and adoption of the new checkout experience. According to PayPal, in just over six months, more than 10 million consumers have opted-in to use One Touch.
Enabled across 23 markets, One Touch is a tool that provides a smooth checkout experience across merchants online and on mobile without having to type in any payment information, usernames or passwords once customers opt in. Each month, PayPal processes millions of One Touch transactions.
As PayPal claims, more than 50% of the Internet Retailer 500 and more than 1 million merchants globally have One Touch enabled. One Touch gets automatically enabled for eligible merchants, and, as stated by the company, the service decreases shopping cart abandonment and increases conversion and engagement rates.
PayPal merchants in Australia, Austria, Belgium, Brazil, Canada, China, Denmark, France, Germany, Hong Kong, India, Italy, Netherlands, New Zealand, Norway, Poland, Russia, Spain, Sweden, Switzerland, Turkey, UK and US currently have access to One Touch.
What is the difference with other checkout tools?
Bill Ready, SVP, Global Head of Product & Engineering, PayPal, commented in the company's blog, One Touch is one of the biggest changes to online shopping since PayPal pioneered digital payments more than a decade ago.
Unlike most checkout tools that require a login and password, One Touch authenticates customer credentials for up to six months so that customers don’t need to log in to make a purchase. The idea behind the One Touch solution is to facilitate shopping by allowing customers to use their spare moments more effectively.
The idea for making shopping as frictionless as possible finds implementation in a variety of ways. One Touch utilizes the authentication part of the process to make it more efficient and smooth. Another type of solution for the same idea is deployed by Swedish payments company Klarna, that itself takes on the burden of payments to merchants by allowing customers to pay Klarna in two weeks after the purchase. Having different solutions and different business models, both Klarna and PayPal's One Touch are built on the same idea – facilitate shopping, increase conversions and boost sales.
PayPal has been actively evolving as a company as it follows the market trends to stay relevant. However, its dominant position in the online payments space is becoming harder and harder to maintain with new disruptors entering the industry at a speed of once every couple of months.
At the end of September PayPal launched its PayPal Here chip card reader in the US. PayPal Here accepts chip card, contactless NFC (near field communication) including Android Pay, Apple Pay and traditional magnetic swipe payment transactions. The pocket-size device may look like an elementary school calculator, but it’s packed with some pretty sophisticated technology.
Moreover, in the same month, PayPal announced a new deal with Macy’s Inc. and introduced its trifecta of payment options. As a result of the deal, PayPal is offered to Macy's customers online, in store and on mobile. While there will be an omni-channel shift in the customer’s shopping environment, there is an element of synergy when it comes to the payment experience at the transaction level: customers can use a Payment Code on the PayPal app, or on the Macy’s app at checkout.
With tightening competition in the payments sector, PayPal has come to the realization over time that streamlined frictionless experience is a major success factor in the market. The company has been holding a strong position in the market for a long time, but with the great momentum of FinTech growth, it may not be so easy in the future. The LTP team will be following the updates on PayPal and its innovative solutions.