Completing online payments via manual card entry can be time-consuming and off-putting for customers.
Research shows that 55% of customers will abandon their cart if they have to re-enter checkout information like credit card details, negatively affecting your business’ conversion rate.
Click to Pay completely removes the need to enter credit card information during online purchases, making it more convenient and faster than manual card entry.
This article will cover everything you need to know about Click to Pay, including its history, how it works, and how you can implement the payment method in your business.
TL;DR
- Click to Pay is an online payment method that allows customers to purchase items online with one click using stored payment details.
- The payment system unified all the distinct online checkouts offered by Visa, American Express, Mastercard, and Discover, and once customers register their cards with any of the major card networks, they only need to tap the Click to Pay button on the websites of online retailers and service providers to make payments.
- Your provider will offer a set of APIs (Application Programming Interfaces) your developers can use to integrate the Click to Pay systems with your website CMS, eCommerce platform, or SaaS platform.
What is Click to Pay?
Click to Pay is an online payment method that allows customers to purchase items online with one click using stored payment details.
Once customers sign up with any of the major card networks, they only need to tap the Click to Pay button on the websites of online retailers and service providers to make payments.
The payment system was introduced in 2019 by the major card schemes, including Visa, American Express, Mastercard, and Discover in response to the demand for a more standardized, frictionless, and secure online payments regime.
Prior to the introduction of Click to Pay, all the major card networks had their own distinct online payment systems like Visa Checkout, Amex Express, and Masterpass, and this forced customers with multiple cards to register separately with each card scheme.
Click to Pay unified all these online checkouts, saving customers much time.
So, by creating a unified system and eliminating the need to manually enter credit card information, the main feature of Click to Pay is speed.
It is also built to be super secure.
Click to Pay is based upon global EMV® Secure Remote Commerce (SRC) standards, which include security measures like tokenization, multi-factor authentication, and 3D Secure protocols.
Adoption of the payment system is growing globally, and it’s available in the United States, the United Kingdom, Canada, and many other countries across the world.
Benefits of Click to Pay
We will look at the benefits of the payment system from the point of view of the merchant and the point of view of your customers.
Click to pay benefits for businesses:
Increased conversions—simplified payments process equals satisfied customers
Click to Pay’s usage of previously stored card information boosts transaction speeds and provides for a smoother checkout experience.
Research shows that customers will abandon their cart if online checkout time isn’t limited to four minutes or less.
So, making your checkout process faster can boost customer satisfaction, and more satisfied customers mean lower cart abandonment rates and increased conversion.
Enhanced security—tokenization and two-factor authentication reduces the risk of data breaches
As we mentioned earlier, Click to Pay uses a data security approach called tokenization to protect sensitive financial data from malevolent actors.
Tokenization is a process whereby sensitive data is converted to placeholder data strings which are stored as a token on the merchant’s system, while the original data is moved to a secure, third-party vault.
The idea is that if the merchant’s systems are ever breached by hackers, all they will get are data strings, which are meaningless without access to the original data stored elsewhere.
Access to that external data is also strictly controlled, and even people with authorized access must verify their identity via two-factor authentication and other means.
Click to pay benefits for consumers:
Convenience—reduced checkout time
For consumers, Click to Pay’s main attraction is that it speeds up online shopping and online booking of services.
In the past, customers had to manually enter card details every single time they purchased goods and services online.
With Click to Pay, all they have to do is tap a button and choose whichever linked credit card they want to use to complete the transaction.
Simplicity—hassle-free one-time passcode
Another major advantage for customers is that they no longer need to remember account numbers or passwords to make online payments.
Once they tap the button to initiate a payment, the one-click checkout system will send a one-time passcode to a pre-registered device and complete the transaction once the code is inputted.
The checkout system may even be designed to recognize trusted devices used by return customers, which can help the user skip part of the authentication process for an even faster checkout.
How Click to Pay Works
Provided the customer has already registered with a credit card network—and some online merchants let customers enroll right on their platform—here are the four steps required for the transfer of funds from the customer to your account under this system.
Step 1: Customer initiates purchase
The customer kickstarts the process by tapping the Click to Pay button on the checkout page of your eCommerce website, service business website, or SaaS platform.
Once the customer does this, a one-time password (OTP) will be sent to the customer’s registered phone number or email address to verify their identity.
The customer will then input the passcode to complete the authentication process.
Step 2: Card recognition
If there is a successful authentication, the checkout system will retrieve the customer’s stored card information and present the customer with a list of available card network options.
The customer will then select their preferred means of payment.
It should be noted that the information being used at this stage of the process is the tokenized data stored in the merchant’s payment gateway.
The original sensitive data is still secured and hidden in an external data bank.
Step 3: The payment services provider authenticates the transaction
Once the customer selects a preferred card network, the merchant’s payment gateway will send the transaction details to the merchant’s payment services provider who will then contact the customer’s issuing bank for payment verification.
Payment verification by the issuing bank means the customer’s bank will check whether the customer has sufficient funds to complete the transaction.
Once the issuing bank gives the go-ahead, the payment services provider will facilitate the transfer of funds from the customer’s account to a merchant account.
The funds will be held in the merchant account for a period to ensure there are no issues with the transaction before the funds are finally sent to the business owner’s business account.
Step 4: Payment completion
Once the transaction is authenticated by the issuing bank, and the funds are sent to a merchant account, the payment services provider will send a notification to the business signaling a successful transaction.
The business owner should receive the funds in 24-48 hours or even more, depending on the set time frame specified in the initial contract with the provider.
The customer will also receive a confirmation message that funds have been debited from the customer’s account and sent to the business.
How to Enable Click to Pay for Your Business
If you own an eCommerce store, service business, or SaaS platform, here is a six-step process to help you implement Click to Pay in your business.
Step 1: Evaluate the need for a Click to Pay system and its cost implications
Changing an existing payment system can be tricky.
If you maintain the status quo and fail to adopt new payment methods increasingly demanded by customers, then you may risk losing business to your competitors.
And if you eagerly adopt a new payment solution that your business doesn’t need, then you may be stuck with a clunky checkout process and wasted investment funds.
So, you have no choice but to carefully weigh your options and make a final decision that will keep your business relevant without wasting precious resources.
A good approach is to check whether your current payment systems need an update.
One way to do that is to analyze your checkout abandonment rates over a period, let’s say one to three years, to see if the rates are high and going up, steady, or low and going down.
If cart abandonment rates are high, then you definitely need to switch to a more convenient payment system like Click to Pay.
If they are steady, then compare your rates to the industry average to see whether you are worse off than your competitors. If you are, then make the switch.
If the rates are low and going down, you can opt to stick to your current system, but we will still advise making the switch because more customers are demanding faster and frictionless checkout experiences.
You also need to weigh the cost implications of implementing a new payment system.
Luckily, you may not need to spend much on new hardware, software, and other setup expenses if you already own the required infrastructure in your existing business.
Step 2: Choose a payment processor or gateway that supports Click to Pay
Most modern payment gateways are already equipped with Click to Pay functionality. This means all you need to do is select a payment services provider that lets you offer Click to Pay payments.
Of course, selecting a payment processor will involve other criteria other than offering Click to Pay functionality, you must also consider the following factors:
- Reliable payment gateways: the provider’s payment gateway must be reliable and secure because any downtime can severely affect your business
- Transaction fees: all the usual card transaction fees are still applicable to Click to Pay payments, so you must ensure the provider is offering a pricing model that is a perfect fit for the peculiar financial realities and customer needs of your business.
- Seamless integration with your existing tech stack: you must ensure that the provider’s payment gateway will easily integrate with your existing eCommerce CMS (Content Management System), website CMS, or SaaS platform.
- Interoperability with your existing software tools and apps: the payment processing platform must be interoperable with your existing software tools, like CRM (Customer Relationship Management), inventory management, POS (Point of Sale), and accounting software.
- Fraud and chargeback management: Click to Pay has built-in fraud prevention mechanisms like tokenization, cryptograms, and multi-factor authentication, but you still need a provider that offers additional security features like tools for analyzing transaction patterns to be able to detect and block suspicious activity in real time.
- Support for cross-border transactions: your business may currently process international transactions or you may be planning to expand internationally in the future, so the provider must support multiple currencies and relevant local payment systems.
- Data analytics: the provider must offer extensive data analysis tools and features to help you track transaction data in real-time, and gain valuable insights that can help you improve customer experience, marketing strategies, and other business offerings.
- Scalable technology: the provider must be able to support high-volume transactions so you won’t need to go through the pains and costs of migrating to another provider as your business expands in the future.
- Robust technical support: something will inevitably go wrong one day, so you want to be sure that your payment services provider is available to resolve any issues as quickly and as effectively as possible.
Step 3: Integrate Click to Pay into your website or SaaS platform
The first thing to do is to set up a merchant account with your payment service provider to facilitate the receipt and processing of credit card and debit card payments.
Then, you can now integrate the new payment system into your existing digital infrastructure.
Your payment services provider will offer a set of APIs (Application Programming Interfaces) your developers can use to integrate the Click to Pay systems with your website CMS, eCommerce platform, or SaaS platform.
You may also have to redesign your checkout page so the Click to Pay button can be placed in a prominent position on the page.
This is to ensure customers can easily find the button when evaluating payment options on your site.
For businesses using a subscription-based sales model, Click to Pay supports recurring payments and your customers will be able to easily authorize recurring charges using their stored card information.
We should add that Click to Pay systems are designed for online payments, so if you operate brick-and-mortar stores, the solution is to use contactless payments options to achieve the same level of speed and convenience offered by Click to Pay technology.
You will need NFC-enabled card readers that are compatible with tap-to-pay payment methods like biometric payment cards, digital wallets, and wearable technology.
Step 4: Test and optimize the checkout flow
Testing your payment gateway and Click to Pay systems is crucial because any glitches with the system can lead to cart abandonment and reduced revenue.
We recommend running a hypothetical Click to Pay payments transaction in a sandbox environment to see if there are any issues from the point where the user clicks the “Pay” button to when the user receives a confirmation message that the transaction was successful.
Your testing should check for security compliance, technical performance, and mobile responsiveness.
- Security compliance: ensure that all financial information is securely transmitted using tokenization and strong encryption across the transaction, and that the provider is in full compliance with security standards like PCI DSS.
- Technical performance: test to see that the payment gateway is processing transactions correctly, that all payment options are fully functioning, and that transaction messages are always triggered for relevant events.
- Mobile responsiveness: ensure that the Click to Pay button and other essential UX features display well across all types of screen sizes and devices.
Step 5: Promote Click to Pay to customers
Even though Click to Pay is faster and more convenient, you still need to familiarize your customers with its advantages to promote its adoption.
Users tend to be hesitant about trying new platform features unless they have been educated about how it works and its benefits.
You will need to come up with a comprehensive marketing strategy that should be focused on highlighting the speed and security of Click to Pay.
Your campaign may include targeted email newsletters, thought leadership content (blogs, videos, and whitepapers), social media posts, and in-store marketing if you operate online and offline.
You can also offer discounts or bonus points to incentivize your customers to try out the new feature.
Step 6: Stay updated and maintain the system
After integrating Click to Pay, you must regularly update the system to ensure compliance with the latest security standards and regulations.
If security breaches or technical glitches occur because you failed to ensure proper maintenance of the system, you may face loss of customers and real reputational damage.
You should also monitor transaction data to evaluate the success of your investment in a new payment system.
Your provider should help with this.
For example, Stax Pay, a leading payment service provider, offers analytics tools that let you track metrics like feature adoption rates, Click to Pay transaction volumes, customer card network preferences, and much more.
You should also actively seek customer feedback, so you can consistently identify their user experience pain points and take steps to improve your Click to Pay offerings.
Security and Fraud Prevention
This section will explore in more detail than we have done earlier in the article, the three main security measures incorporated into Click to Pay technology.
Tokenization and encryption
Tokenization is the bedrock of the security architecture of Click to Pay systems because by storing sensitive information like credit card numbers and CVVs externally, it eliminates the risk of exposing sensitive card data to hackers.
In addition, all the data stored away from merchant servers are encrypted to AES-256 encryption standards to keep the financial information safe while its been transferred between financial institutions processing payments at the backend.
Multi-factor authentication
Click to Pay is designed with 2FA (Two-factor authentication) from the ground up. This is why customers are always sent a verification code to authenticate their identity anytime they tap the Click to Pay button.
Ensuring users can’t effect transactions without entering a code sent to their registered number or email address provides a security layer that helps to prevent unauthorized access via identity theft.
Regulatory compliance
All businesses that handle sensitive customer financial data are required to follow PCI DSS regulations, and Click to Pay is designed to be fully compliant.
The payment system is also compliant with customer data privacy regulations like GDPR, which is focused on ensuring transparency in the way customer data is used and stored.
Click to Pay vs Other Payment Methods
| Feature | Click to Pay | Traditional Card Entry | Digital Wallets | Guest Checkout |
| Ease of Use | Removes repetitive data entries for faster checkout. | Requires multiple login steps and manual entry of card details. | Relies on stored customer data for faster payments. | Allows purchases without creating an account but requires manual entry of details like shipping and credit card information. |
| Security | Provides enhanced security through tokenization. | Security risks due to sensitive card details stored on merchant servers. | Provides security similar to Click to Pay but is proprietary to individual companies. | Minimal security; customer data is not retained for future use. |
| Data Storage & Integration | Unified system encompassing major card networks; data is tokenized. | Sensitive data may be stored on servers, increasing the risk of breaches. | Proprietary systems issued by companies like Apple Pay, Google Wallet, Samsung Wallet, and PayPal. | Does not retain customer data, leading to potential loss of follow-up marketing opportunities. |
| Speed | Quick and seamless checkout process. | Slower due to manual data entry. | Speeds up checkout with saved customer data but requires compatibility with the wallet. | Speeds up the process by skipping account creation but not as seamless as Click to Pay. |
| Marketing Opportunities | Retains customer data for follow-up marketing and improved user experience. | Minimal or no integration with marketing systems. | Varies depending on the wallet provider’s system capabilities. | No retention of customer data for marketing or user experience optimization. |
| System Coverage | Unified system for all major card networks. | Restricted to individual merchants. | Proprietary and company-specific systems, requiring separate integrations for each wallet provider. | Limited to the individual merchant’s system, with no broader applicability. |
Click to pay vs traditional card entry
The main difference between the two is that traditional card entry imposes multiple login steps on users and comes with the security risk that sensitive card details stored on a merchant’s servers can be stolen by cyber hackers.
In contrast, Click to Pay removes the need for repetitive data entries and provides greater security for sensitive information via tokenization.
Click to Pay vs digital wallets
Click to Pay and digital wallets are similar in the sense that both payment systems rely on stored customer data to facilitate faster payments.
The difference is that while Click to Pay is a unified electronic payments system that encompasses all the major card networks, digital wallets are proprietary payment systems issued by individual companies like Apple Pay, Google Wallet, Samsung Wallet, and PayPal.
Click to Pay vs Guest checkout
Guest checkout is a feature that allows new shoppers to complete purchases on an eCommerce site without having to create a customer account.
This speeds up the checkout process since the customer won’t have to go through the long process of logging in and uploading personal information. All that’s needed are shipping details and credit card information to finalize the customer’s order.
This Guest Checkout approach is similar to the overarching philosophy of Click to Pay systems, which is speed.
However, it comes with drawbacks like no retention of customer data and no follow-up marketing, issues absent in a Click to Pay system.
Use Cases and Industries Benefiting from Click to Pay
Click to Pay is used globally by several businesses in an ever-expanding range of industries, and we just want to highlight these three industries to let you understand the scale of its transformative impact.
eCommerce: faster checkouts driving higher sales
Online retail businesses are leveraging Click to Pay systems as a key driver of growth. When you make it way easier for customers to pay for your goods and services, you will make more money.
So, if most of your customers buy goods or services from you online, you are better off switching to Click to Pay.
Travel and hospitality: reduced friction during booking
Restaurants, airlines, hotels, and transportation companies are rapidly adopting Click to Pay to avoid being left in the dust by competitors.
It’s infinitely easier to book a service at the click of a button than to have to manually enter card details after spending minutes researching and weighing multiple competing service providers on the internet eager for the customer’s cash.
Subscription services: simplified recurring payments
We mentioned earlier in the article that Click to Pay supports recurring payments, and you can easily see that from the many SaaS companies increasingly integrating the payment method into their platforms.
Other non-software companies using a subscription-based model like gym memberships, food delivery companies, and streaming companies are also leveraging the payment method to improve their checkout experiences.
It’s Time to Implement Click to Pay in Your Business
You have learned how Click to Pay will simplify your checkout experience, boosting customer retention and sales revenue in the process.
We have also explored how to set up the payment system for your business and the fact that it is fully supported by the major card networks; Visa, Mastercard, American Express, and Discover.
Now, it’s time for you to sign up with a reliable payment services provider like Stax Pay so your customers can start enjoying this transformative payments system as soon as possible.
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