The fight to get awful mobile e-commerce up to scratch
Why is it still so hard to buy things on a mobile phone? Why are checkout processes so lengthy and glitchy? We've all had the awkward, ugly experience of trying to process a basic web- purchasing transaction on a smartphone. What should be a 30-second process often turns into five minutes and several reloads.
The blame can be shared between retailers' unfriendly mobile websites, archaic payments infrastructure and a lack of innovation by banks and payments companies.
The result is a slew of industry figures showing sky-high abandonment rates among those trying to buy something online. 'Mobile conversion', in industry jargon, on mobile phones is less than half that on PCs.
It's a particular problem for Irish businesses. This week's European Commission Digital Scorecard report shows that Irish small firms are the most active in Europe in selling online and across borders.
But with 50pc of consumers now defaulting to their phones instead of PCs for online browsing, and billions around the world experiencing their first internet session on a phone, what can Irish firms now expect?
"This is the most pressing problem the industry faces," says Juan Benitez, chief technology officer of Braintree, a subsidiary of PayPal.
"Mobile is by far the primary platform for consumers, but only 10pc of commerce is done on mobile. And there's a conversion rate that's three to four times more difficult."
Benitez was in Dublin recently to talk to Irish companies about the issue. Braintree is the main competitor to Stripe, the payments company founded by Limerick brothers Patrick and John Collison. The PayPal subsidiary has huge global customers that include Uber, Airbnb and Pinterest.
Braintree is tackling the mobile conundrum in two ways. It is developing social media purchasing buttons as well as its own 'buy now' buttons that anyone with an app or a mobile website can integrate.
"Our first foray into this was last year with buyable Pins," says Benitez. "We went further last autumn when we acquire Modest. This aims to solve the experience of retailer. So we can let a retailer put a buy button onto a native app or a website and now in emails too. We think that email is underused. We all get emails, but you have to click the link in the email, get redirected and sometimes you don't get deep-linked properly. Checkout sometimes drops off along the way."
Benitez says that all of this will be available to Irish and European businesses "later this year".
"You'll be able to click on the link and be taken to a checkout experience," he says.
Braintree isn't the only one racing to provide better mobile payments systems.
Stripe recently introduced its Relay service, which lets people buy things in apps and social media services such as Twitter and Facebook. The Stripe service is being used by giants such as Adidas and Best Buy, while Twitter is pitching it as one of the features that could help lift it out of its malaise.
Benitez says that competition is healthy. But he has his own slant on who's ahead. "One of the things that we're able to do is to harness the capability of Paypal's 184 million consumers," he says. "And 14 million merchants. No one on any of the other modern platforms has that breadth. We recently announced over $50bn of payments made in 2015, up from $13bn a couple of years back. By that metric alone, we've grown the business by more than four times. The power of Braintree and PayPal is what differentiates us."
But it's not just Stripe that Braintree is in competition with.
"There are also a lot of legacy complicated, unreliable systems out there," says Benitez.
"The reality is that lots of ecommerce is still powered by legacy systems that aren't great. They can't help you connect to that many consumers and they can't future-proof you.
"They just don't solve any of the problems, regulatory issues or contextual commerce issues that we think are going to change the industry as much in the next three to five years as much as mobile has in the last three to five years."
What about alternative payment systems such as Apple Pay or Samsung Pay? Industry figures show that these have been slow to gain adoption among everyday shoppers.
Apple is currently ramping up in markets where people are more comfortable with so-called contactless payments. In Ireland, such payments are estimated to be a small percentage of the market according to the last published figures from Visa.
But success is mixed. In the US, 17pc of people who own newer iPhones have tried Apple Pay, an increase from 9pc in 2014, according to a recent survey by Pymnts and InfoScout, a consumer researcher. The system can now be used in over 2m locations, including retail chains such as Crate & Barrel, Chick-fil-A and Au Bon Pain. Adoption of Apple Pay has been faster in Britain and Northern Ireland than in some other Apple Pay countries due to a 40pc iOS phone market share and agreements with merchants such as sandwich chain Pret A Manger and Twickenham Stadium.
Globally, mobile payments are predicted to increase to €550bn this year, up from €400bn in 2015, according to a report from TrendForce. Meanwhile, eMarketer estimates that the total value of transactions made by tapping a phone on an in-store terminal will reach €190bn this year, up from €8bn in 2015.
Samsung Pay is expected to expand its services in more countries this year, with Britain and China topping its list. The payment service is not expected to debut in Ireland this year.
Here in Ireland, bus and rail travellers might soon be able to pay for their fares by swiping their smartwatch or mobile phone, according to plans published by CIE.
The semi-state transport company is to upgrade its IT systems with a view to accepting new forms of payments, including Apple Pay, Samsung Pay and Stripe. Apple Pay and Samsung Pay are used by swiping Apple and Samsung smartwatches and phones.
While neither digital payment system is yet available in the Irish market, CIE wants to make its new systems compatible with the payment methods. It is also eyeing alternative payment systems such as Android Pay, Masterpass and Visa Checkout.
CIE is one of the companies that has to find some alternative to existing systems.
"Traditionally the consumer has to enter in a 16 digit number and expiration date, which is almost impossible to do on a mobile device," says Braintree's Benitez.
His company's purported answer is Paypal's One Touch.
"One Touch makes it so that you only have to log into one time and then you have a persistent session," he says.
"I can walk between flights or to the train and we're all buying things with a thumb.
"This is live across all platforms and devices and 200 markets - 21 million consumers that have opted into that experience."