Finding a way to reduce both fraud risk and friction in digital commerce is one of the biggest challenges in payments. The card brands have tried this before, and that experience is vital to informing their newest effort.
Following months of preparation, Visa, Mastercard, American Express and Discover announced the launch of "click to pay," a new streamlined checkout process that functions similarly at all participating e-commerce sites, large or small.
Consumers are only required to enroll once, anchoring their preferred payment credentials to an email address that works across any merchant using the interoperable checkout service to simplify checkouts.
The card networks also are hoping that the ease of integration and improved security click to pay provides makes it appealing for payment services providers to promote to merchants. Payment processors and platforms including Adyen, Authoize.Net and Stripe are supporting click to pay, and the initial focus will be on converting existing Masterpass and Visa Checkout merchants to click to pay, according to a Tuesday press release.
How consumers respond will make or break the concept’s success with merchants.
The card networks don’t have a strong track record in getting consumers to register for e-commerce checkout systems or digital wallets — if that were not the case, a new service would not be necessary.
But the networks have been working since the early 2000s to streamline online card payments, starting with the launch of 3-D Secure, which was presented to consumers under brands such as Verified by Visa and Mastercard SecureCode. Though these systems evolved over time, they are remembered largely for the friction they introduced into the checkout process.
The second wave of attempts came a decade later in the smartphone era. Mastercard was the first to try it with the 2013 launch of Masterpass, followed a year later by Visa’s Visa Checkout and Amex’s Express Checkout in 2015. Each required consumers to register payment credentials through a unique online sign-in process that would work at participating merchants, but none caught on broadly.
This time around, the networks have let go of their unique brands and agreed on a single look and feel for a system based on EMVCo’s Secure Remote Commerce (SRC) specification announced this year. SRC limits the exposure of payment credentials for one-off purchases.
The concept could also simplify operations for merchants who can participate through a single integration point, versus connecting separately to each network’s digital wallet.
SRC was designed to operate like a guest checkout online, handling the enrollment one time through a card issuer’s website or app. Thereafter, if a consumer wants to use SRC to pay on a new device, they go through an email authentication process and can choose to trust that device for future payments. After clicking the SRC button at a merchant, the consumer can optionally choose to create an account with that merchant.
SRC’s enrollment process, which takes place in a bank-controlled environment, combines with other security methods like 3-D Secure 2.0 to provide a richer set of data for combating fraud.
Thus, there is value to SRC even for companies like
"Click to pay will be transformational for online checkout, providing a standard way for shoppers to check out online just like they do in stores, which will be great for merchants and customers,” said Pablo Cohan, Mastercard’s senior vice president of digital payments in North America, in an interview.
Cinemark, November and Rakuten are the first merchants to add click to pay to their websites, with Saks Fifth Avenue, Papa John's, Tickets.com, BassPro, JoAnn Fabric and Crafts and SHOP.com adding the service by the end of the year, the release said.
In June, Mastercard launched a version of SRC under the
Click to pay may not appeal to merchants like Amazon that already have their own streamlined checkout processes, and others with their own customized payment approaches, but the new approach is designed to work across all merchants in all locations, Cohan said. It’s rolling out first in the U.S., with the goal of expanding internationally next year.
The top use case for SRC may be improving the checkout experience for consumers discovering new e-commerce sites or shopping at sites they visit less frequently, Cohan said.
“Along with merchants adding click to pay this holiday season, we expect most merchants will be ready to adopt it next year,” Cohan said.
Each network has some latitude in how it’s participating in click to pay, according to Cohan.
Mastercard, for example, will run all SRC transactions through NuData, an AI-powered fraud-filtering service the network purchased in 2017. To prepare smaller merchants for this change, Mastercard earlier this year launched Mastercard Digital Wellness.
“The goal of Mastercard Digital Wellness is to get all types of merchants and small business operators educated and ready for digital payments so they can capitalize on the cybersecurity and fraud tools that large merchants have access to,” Cohan said.
Consumer adoption will be critical to the concept's success, he acknowledges.
"We think growth will come as people see it in action and consumers see the benefit in how it solves several problems," Cohan said.
