Online payments have been growing steadily for over a decade and continue to evolve with a new payment method on the horizon: Click to pay.
Click to Pay is a prime example of innovation in this area, as its name suggests. This new payment method will eventually allow your consumers to make online payments with just one click, while ensuring the required security, without having to enter their card details (whether debit or credit).
If you want to understand how Click to Pay will work and what the implications are for all players in the payment value chain, you’re in the right place because this article is for you 😊.
Without further ado, let’s start with a bit of history about the foundations of the Click to Pay innovation!
What is Click to Pay?
At the origin of this innovation is a group of major card networks, including VISA and Mastercard, as well as other players like JCB, American Express, and UnionPay, which are less common in France. These organizations are part of a structure called EMVCo.
The objective of this structure ?
Is to manage all topics related to chip cards, integrating uniformity while developing innovation related to cards.
Specifically, with the Click to pay solution, the idea is to store all data related to the cardholder’s (or consumer’s) card using a token, which will serve as a unique payment identifier.
Thus, your consumers will no longer need to enter all security details related to their card, regardless of the type of card.
So, you might be wondering, what are the benefits for you and your consumers?
Click to pay: What are the benefits for merchants?
- Optimized payment transactions: Integrating Click to Pay is proposed as a simple implementation that eliminates various payment steps.
- Increased average basket size: You likely know that online payment is closely tied to conversion rates. With Click to Pay, it’s highly likely that consumers will complete their payment process more easily, which will naturally increase your sales and/or subscriptions.
- Increased payment acceptance: Cards can sometimes cause issues in the payment process, especially with sequential and dependent steps. By offering a one-time payment service, there’s no need for multiple transactions, and security will be enhanced.
Click to Pay: What are the benefits for your customers ?
- Smooth customer experience: With a single entry point for the customer, satisfaction will undoubtedly increase as the payment process becomes simpler.
- Simplified payment process: No need to search for card information or locate a credit card. Thanks to Click to Pay, information will already be stored, and payment will be completed with a single click.
- Reduced card fraud and increased security: Despite the decline in fraud rates due to strong authentication, card fraud remains a major issue. Storing information in a token reduces fraud and enhances security, as the token is secure and uniquely identified.
Click to pay vs. Other payment solutions
It’s important to note that, although this solution can be offered on e-commerce or merchant sites, Click to pay primarily relies on card support.
In the French ecosystem, cards are often dependent on the American giants VISA or Mastercard, regardless of the issuing bank.
It’s worth noting that even if some cards display the CB (Bank Cards) logo, they are necessarily co-branded with a “VISA” or “Mastercard” mention.
For merchants, using card networks will incur fees such as interchange fees, banking fees, and fees for using the VISA, Mastercard, or CB payment network.
For example, the processing cost of a debit card within the VISA network is 1.3640%, plus additional fees.
Also, Click to pay is preferable for one-time (non-recurring) payments due to its unique identifier.
Depending on your business type, if you offer subscriptions or recurring services, Click to Pay may not be the most suitable solution.
We recommend SEPA direct debit, which can eliminate card network fees.
Furthermore, Click to pay cannot address another drawback of cards: their limited lifespan of 3 to 6 years, depending on the bank, whereas recurring payments default to repeating at the initially defined frequency.
But, what about the future of click to pay in the french ecosystem?
In France, we are currently at the early stages of this payment solution: Financial institutions are considering how to implement and offer the solution to their clients.
It is highly likely that American giants (VISA and Mastercard) will do everything to ensure this solution is favored by both banks and merchants.
But what about the independence of customer data and the security of data stored by organizations like VISA?
Would you be willing to entrust your customers’ data to a private entity, especially one from abroad?
These are the questions that will arise once banks push the Click to Pay solution to their e-commerce clients…
