The Battle for Frictionless Checkout
It’s one of the most dreaded paradoxes of running an online business. Customers want to get from the buy button to the “track shipment” page with as few steps as possible. But they also want businesses to keep their data secure. They’ll abandon their cart if the checkout page requires repeated identity verification…but they also won’t shop at a business that has suffered data breaches or other attacks.
The fight to retain users has returned to a familiar battlefield: the Buy button. As more people rely on their computers (and phones!) to get their shopping done, the Buy button has taken on an almost mythic significance. When it comes to Buy buttons, the common wisdom among e-commerce sites is that simpler is better. Shoppers universally cite a cumbersome checkout experience as a key reason they’ll leave a site, so simple Buy buttons decrease shopping cart abandonment.
To many, One-click ordering is the pinnacle of the hassle-free shopping experience. Amazon pioneered One-Click ordering: you enter your credit card information and shipping address just once, after which you can order that impulse buy at the touch of a button. The One-click patent expired earlier this year. Since then Facebook, Twitter, Google, Pinterest, and others have jumped on the bandwagon. Pinterest, for example, has implemented “buyable pins.” To start, users enter their credit card number and shipping address into the app. Pinterest relies on user-generated content drawn from thousands of retailers worldwide, so, when a user spots something they want to buy, they simply click “Buy it” – and the site sends their shipping and payment information to the relevant retailer.
Now Visa and MasterCard are getting in on the One-click action. They’re planning to combine their Visa Checkout and Masterpass options into a single button: the “universal Buy button.”  American Express and Discover will also join in.
But is the One-click experience too good to be true? According to Karisse Hendrick, fraud consultant and market evangelist at CardNotPresent.com, frictionless checkout may not be risk-free. Customers do find it annoying to create an account and enter their information on your site…but in doing so, you’re gathering data that helps you identify fraudsters.
If you’ve blacklisted a fraudster on your site, Karisse points out that there’s nothing to stop them from using an external app to commit fraud. The universal Buy button might make it easier for fraudsters to pose as honest users. Fraudsters typically add stolen credit cards to their e-commerce account to test the cards or make large purchases, which raises red flags in most fraud prevention solutions. But fraudsters can leverage external payment apps to add stolen credit cards without setting off any red flags.
The problem starts from square one. As Karisse explains, the fraud department doesn’t usually make decisions about payment methods. Companies like Visa and MasterCard provide incentives for a company to use their payment method to streamline their checkout experience. Adopting a new payment method is typically a marketing decision, then, not a trust & safety decision. The fraud department doesn’t hear about it until they have to deal with the fraud.
If you’re an e-commerce retailer, the universal Buy button is one to watch. Customers expect an easy and pleasant checkout experience, and the universal Buy button promises exactly that. But balancing frictionless user experience against user safety isn’t getting any easier. In fact, it’s only going to get trickier.
