In a sign that alternative payment options play an important role in mobile commerce, new data from ShopVisible reveals that PayPal was used by consumers in 67 percent of mobile transactions.

ShopVisible reviewed 23,000 Web and mobile transactions over a 60 day span and found that only 33 percent of consumers chose to pay by credit card in thousands of mobile transactions. The numbers point to the fact that mobile commerce is different from traditional ecommerce and that merchants need to include alternative payment methods in their mobile offerings if they want to capture mobile commerce sales.

“Ready or not, online retailers are now routinely seeing upwards of 20 percent of their overall site traffic coming from mobile devices,” said Sean Cook, CEO of ShopVisible, Atlanta. “It is imperative to create experiences that are usable and efficient for consumers or risk shutting out one-fifth of your customers.

“The broad availability of mobile devices opens up opportunities to target markets that may not have had traditional Internet access in the past,” he said. “With this, merchants have to adapt to the changing access points and preferences of their buyers.

“In this case the mobile shopper, through their actions, demonstrated that they prefer as seamless a transaction as possible.”

Facilitating mobile transactions
With mobile commerce sales growing, merchants will be well served to consider alternative payments in mobile even if they do not constitute a large percentage of a merchant’s existing Web business.

The report shows that while alternative payment methods are dominating in mobile, the results are reversed for Web-only transactions, with 62 percent of buyers choosing to pay by credit card, 16.8 percent by PayPal, 12.9 percent by Amazon Payments and 8.1 percent by Google Checkout.

“While it is not necessarily surprising that alternative payments would be more attractive because of the relative ease of transaction, it is surprising to see the dramatic swing of percentage of that shift,” Mr. Cook said.

PayPal plows ahead
The fact that PayPal is dominating as an alternative mobile payment method is not surprising. The company has been aggressively chasing mobile payments transactions through a variety of strategies and has reported that it expects to process $7 billion in mobile total payment volume this year.

PayPal recently began piloting a new application in Britain that enables users to make purchases via a unique bar code linked to their account (see story).

Additionally, it rolled out its cloud-based point-of-sale system to retailers such as JCPenny and Toys ‘R’ Us, enabling customers to pay by keying in their mobile phone number and a PIN at checkout (see story).

PayPal is also increasingly being used in mobile applications, with convenience store chain Cumberland Farms recently introducing an app called SmartPay that lets users pay for their gas with PayPal (see story).

Another recent report suggests that PayPal is also well positioned to take advantage of growing interest in mobile wallets, with eight in 10 consumers saying they would use PayPal as their mobile wallet provider while only six in 10 would use Google or Apple, according to Carlisle & Gallagher (see story).

“The challenge should continue to be – how can we as retailers and merchants continue to make the best mobile experiences and the most frictionless commerce that we can,” Mr. Cook said.

“By their very definition, mobile users are on the go,” he said. “Asking them to adapt their fast pace to take the time to fill out a checkout form is counter-intuitive and the results of our study spoke strongly to this point.

“The evolution of commerce is all about knowing your customer, their preferences and their drivers. The successful mobile initiative needs to understand and integrate this point into their overall strategy.”