We’ve been reading some fascinating numbers released by Jumio Inc and reported in Mobile Payments Today. Some of my own highlights (or perhaps lowlights) are:

  • More than two-thirds (68%) of smartphone/tablet owners have attempted to make a purchase on their device, but two-thirds (66%) have also failed to complete a transaction due to “obstacles during checkout”
  • Nearly half (47%) of respondents said they abandoned a purchase because checking out took too long
  • 41% said checking out on their mobile device proved too difficult
  • More than half (51%) of survey respondents said they abandoned a purchase over concerns about entering credit card information

In short then, we are trying to buy things on our mobile devices, but the majority of us (at least once) have found the experience so difficult that we’ve given up.

The research is a nice validation of our own data around consumer purchasing behavior on mobile, particularly using credit cards. Our analysis shows that credit card only payment options for mobile apps will often see single-digit conversion rates, which we attribute to a mixture of payment friction (fiddly entering of long numbers) and the fact that credit cards are far from universal. In countries where credit card penetration is low, such as in India, we’ve seen conversion rates as low as 2%. In this case consumers are probably abandoning a purchase because they don’t have the means to pay, rather than because they’re put off by friction in the payment flow.

We at Bango power mobile payments for many of the world’s largest app stores, including BlackBerry, Facebook, Google Play, Firefox Marketplace and others. Those app stores would consider such failure rates to be completely unacceptable. The app stores plug into Bango because we place frictionless, one-click billing at the heart of what we do. Today that means leading with operator billing: Allowing consumers to charge a purchase to their phone bill, often with one-click, without the need to register personal details, send premium text messages or enter long credit card numbers. Operator billing may not be as exciting as the latest new wireless technology or point of sale gizmo, but it’s the state of the art: the most effective way of selling digital goods on mobile today.

Conventional operator billing tends to achieve a 40% conversion rate. That’s an order of magnitude better than alternative approaches, but let’s not get ahead of ourselves – at a 40% conversion rate, most mobile commerce customers who click ‘buy’, still do not successfully buy.

Billing with the Bango Payment Platform delivers an average conversion rate of 77%. Most users who click ‘buy’, do buy – We’re finally in the realm of effective selling on mobile. The reason for this difference, our competitive advantage, is our payment platform approach. Bango applies a persistent user ID to all the mobile users who we see across our payment and analytics products. We augment this ID over time, until we arrive a ‘billing grade’ ID – That is, we’re able to authenticate the user and their operator account, so that we can place a charge on their bill. Our massive reach around the mobile web means we now have more than 200 million billing grade IDs and in excess of one billion user IDs. The result is that when a user comes to buy, there’s a good chance that we’ve seen them before, and can authenticate them for a streamlined, one-click payment.

The Jumio survey and others like it reveal the extent to which payment on mobile is broken. Bango, in partnership with more than 100 mobile operators and powering payment for most of the world’s biggest app stores, is working to fix it.