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Google Wallet makes gains against PayPal in mcommerce checkoutBy Rebecca Borison
The mobile checkout solution’s success points to Google Wallet’s increased competition with players such as PayPal, but also underscores a shift in Google Wallet’s strategy from in-store to online. Rue La La’s conversion rates have increased four-fold compare to other Android app shoppers, Newegg has been seeing mobile Web shoppers convert 100 percent more often and Fancy has seen its conversions increase by 20 percent.
“Google Wallet Instant Buy is certainly beginning to nip at PayPal’s heels in the online space, but has nowhere near the market share,” said Jordan McKee, analyst for Yankee Group, Boston. “Many merchants still remain wary of Google’s intentions and fear that they may leverage their data for competitive offers.
“Google has a strong omnichannel vision, as evidenced by its focus on the virtual and physical worlds,” he said. “Both will be important to Google’s success in payments. One major problem to date is that Google Wallet’s consumer-facing value proposition continues to struggle, meaning adoption remains minimal.
“Many companies are looking to insert themselves into the payments value chain. In the mobile online checkout space, companies see value in becoming the lubricant that makes commerce easier. Facebook and Amazon, for instance, are perfect examples. PayPal will continue to see more competition as a result of this.”
Google Wallet introduced its Instant Buy API earlier this year to speed up and enhance the mobile checkout, and retailers are already seeing positive results.
The goal of Google Wallet Instant Buy is to streamline the online checkout process to help mobile shoppers convert on the device.
According to Google, 93 percent of consumers who used mobile to research go on to make a purchase, but only 17 percent of consumers actually purchase directly on their mobile phone.
Common obstacles include a small screen size and unwillingness to type in all of the billing and shipping information.
With Google Wallet Instant Buy, consumers can use their Google Wallet login to checkout in a few taps. They simply click on “Buy with Google” to bypass all of the irritating typing.
“Often mobile shoppers are ready to buy, but because the process to sign in and purchase requires filling out dozens of billing and shipping fields on a small screen, many times they wait until they’re on a larger device or give up altogether,” said Ariel Bardin, vice president of payments at Google, Mountain View, CA. “With Google Wallet Instant Buy, brands can win the home stretch of the mobile experience by making it as easy as two taps for customers to purchase.
“Google Wallet Instant Buy helps increase conversions by streamlining the purchase flow and reducing the amount of information customers need to enter,” he said.
“We’ve gotten great feedback from brands and users about Google Wallet Instant Buy, and many merchants are seeing a very encouraging rise in mobile sales, conversions and loyalty.”
After integrating Google Wallet Instant Buy into their Android app in May, online flash-sales retailer Rue La La saw traffic spike almost 50 percent in the following weeks. Additionally, thousands of new users downloaded the app from Google Play.
Transactions from the app quadrupled in the same time frame. More than half of Google Wallet users made a repeat purchase within weeks.
“Since the foundation of our business is limited-time, limited-inventory, getting our members in the door and through the checkout process quickly is beneficial to both parties,” said Gerry McGoldrick, vice president of marketing at Rue La La, Boston.
“We saw a substantial increase in conversion rates for our Android app using members that integrated their account with Google Wallet because they did not have to re-enter their shipping, billing and payment information, as Google Wallet securely stores and protects this information for them,” he said.
“The integration with Google Wallet ensures that no one misses out on their desired items because of time spent checking out.”
Newegg, a computer hardware and software online retailer also saw similar success after integrating Google Wallet Instant Buy into their Web site. Almost one out of 10 mobile shoppers checkout via Google Wallet.
Consumers who checkout with Google Wallet convert 100 percent more often than other mobile shoppers on Newegg. Additionally, traffic to Newegg’s site has grown by 39 percent for new visitors and 35 percent overall.
Fancy inserted the Google Wallet Instant Buy API into both its Android app and its Web site. The addition increased purchase conversion by 20 percent.
Seven out of 10 Android users checked out with Google Wallet in the app, and almost two thirds did so on the Web site. Android users were five times more likely to buy with Google Wallet than alternative payments.
Users who were signed in through Google had an average order value that was 14 percent higher than the average value of all orders made.
While Google Wallet Instant Buy has clearly seen some initial success, there are still many competitors in the space.
“Any credible and secure payment method that allows for a faster check-out is something that is beneficial to consumers and merchants alike,” said Drew Sievers, founder and CEO of mFoundry at FIS, Larkspur, CA. “It’s a crowded market, however, with PayPal the clear leader followed by people like Amazon, MasterCard’s MasterPass, and Visa’s V.me.
“It’s well known that Google’s in-store attempts via NFC have, thus far, not been successful,” he said. “However, the latest operating system’s enhancements through KitKat are a promising way for Google to rekindle consumer and merchant interest in POS-based mobile payments.
“All those carrier-controlled NFC phones will now be usable by pretty much anyone willing to work within the KitKat method. That’s good for Google and not good for Isis.”
Google Wallet also recently launched a physical card, suggesting that the NFC-enabled in-store wallet has not been cutting it for consumers (see story).
Perhaps Google is pivoting towards online commerce where its speedy checkout solution is universal and faces much fewer obstacles than its in-store product.
According to Yankee Group’s September 2013 US Consumer Survey, only four percent of device owners have used Google Wallet to make a payment in a store.
“Google is taking a holistic approach to helping consumers make transactions. While their P2P product is in the same space as PayPal, there is plenty of room for both products to grow for some time,” said Peter Olynick, card and payments practice lead at Carlisle & Gallagher, Charlotte, NC.
“Google will experience growth in the online offering, but don’t expect them to abandon the in-store market,” he said. ”With some of the changes to the NFC requirements, Google will be able to provide a compelling product in that space as well.”
Rebecca Borison is editorial assistant on Mobile Commerce Daily, New York
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Tags: Ariel Bardin, Carlisle & Gallagher, Drew Sievers, Fancy, Gerry McGoldrick, Google, Google Wallet Instant Buy, Jordan McKee, mFoundry, mobile, mobile commerce, mobile marketing, NewEgg, Peter Olynick, Rue La La, Yankee GroupYou can leave a response, or trackback from your own site.