In recent years, digital payments have expanded their reach from physical point-of-sale, card-in-slot transactions to contactless payments made with mobile devices using secure digital mobile wallets. This works well for making physical in-store purchases easier, but for online purchasing using a mobile device, filling out tiny input forms with payment and address information seems unnecessarily painful. Integrated in-app payments have emerged as a better solution for mobile commerce, and innovations on the basic model are already showing up. Some of the more notable include:
- Authenticated payment: A traveller using Uber’s ride-hailing app connects a payment method to the app after downloading it and before requesting a ride. At the end of an Uber trip, the fare is automatically calculated and charged to the customer’s payment method after they have authenticated. Uber also offers the option to split a fare with other passengers before the ride ends, using another option within the app.
- Increased conversion rates: On-demand restaurant delivery service DoorDash changed its in-app payment function to default to Apple Pay – even for existing customers who had already stored their card details on the company’s system. DoorDash reasons that since Apple Pay is so fast and easy to use, defaulting to that payment option removes friction from the checkout process – an important factor since customers are ordering food on the spur of the moment.
- Consumer convenience: Restaurant reservation platform OpenTable has added a “Tab” function to allow diners to pay their bills instantly inside the OpenTable app, rather than using a traditional card and POS system. It will even allow a user to set a standard amount for gratuities, which can be adjusted through the app before the final bill is paid.
While most of the examples above are based on Apple Pay, a comparable amount of innovation is happening with Android Pay and other mobile payment apps, and we’re looking forward to seeing how app-based services and platforms figure out new ways to help their users make payments more flexible and more easier than ever.