Payments Optimisation

Dawn of the super-app: Optimise your e-commerce business for in-app purchases


Apps are set to become the primary consumer channel for online shopping in many countries. This trend is especially pronounced in Asia, which has some of the highest rates of mobile commerce growth in the world. Discover the potential regional opportunities for your e-commerce business.

Mobile app e-commerce growth in Asia has been driven in part by a historical lack of domestic desktops to access the internet, paired with increasingly cheaper smartphone devices and data plans. In Indonesia, mobile commerce is growing at a compound annual growth rate of 45.2 percent,1 with apps accounting for 75% of purchases. India is another notable example, with app store downloads growing by 165 percent between 2016 and 2018.2 In-app transactions now account for 82.4 percent of all completed mobile commerce transactions.3

 

Great app experiences are becoming essential to reach UK shoppers

The UK mobile commerce market is worth €91 billion,4 accounting for 51 percent of the total business-to-consumer e-commerce market.5 In terms of scale, the UK mobile commerce market dwarfs all others in Europe. The pace of mobile commerce growth also makes this segment impossible to ignore and it is expected to outstrip overall UK e-commerce growth and expand at a compound annual growth rate of 20 percent over the next three years, to become a €188.8 billion market by 2021.6

Making in-app shopping experiences enjoyable, secure and simple will be critical for any brand looking to gain traction in this market as 43.5 percent7  of mobile commerce users shop via this method. Merchants who use these channels should look at solutions such as easy-to-use payment platforms that integrate seamlessly with apps and social media channels and offer strong security measures.

Explore card-on-file and tokenisation as key enablers for this market

Payment methods such as cards and digital wallets (e.g. Apple Pay and Google Pay) are well suited for in-app transactions. In particular, card-on-file arrangements, where a company stores a customer’s card details are likely to become more popular, as they allow greater convenience and one-touch payments.

A key enabler for card-on-file is tokenisation, or replacing your customer's payment account data with a token (a value that cannot be converted back to card or account information within your network). The token functions within your internal systems just as the actual card number would and allows you to avoid storing sensitive data.

Integration with super-apps should be a part of your platform strategy

Merchants should monitor the rise of ‘super-apps’ in Asia. Chinese social network WeChat, which spans a large range of e-commerce and lifestyle services, also has its own payments system. International merchants targeting China should consider integrating their shopping functions with WeChat Pay, a form of digital wallet that allows both peer-to-peer transactions as well as direct payments with vendors.

Tokopedia, which is Indonesia’s largest e-commerce platform, has recently agreed a partnership with local mobile payment platform OVO. If merchants are not set up for these all-encompassing platforms, and their preferred payment systems, then they could get locked out of growing Asian markets.

Three takeaways for e-commerce merchants offering mobile app experiences

1. App usage is increasing in both growth markets in Asia and e-commerce front-runners such as the UK

2. Merchants that can offer strong end-to-end security while maintaining a frictionless payment experience will be well-positioned to win customers

3. Developments in digital wallets, tokenisation and super-apps should be a part of your customer experience strategy

 
 

To learn more about digital wallets such as Apple Pay and Google Pay, mobile commerce developments, reducing fraud rates and expanding your e-commerce business internationally, contact your J.P. Morgan representative or call our merchant support team on:

Europe: +353 1 726 2909

UK: +44 845 399 1130

Complement your app commerce strategy with proactive acquiring. Your acquirer can help you:

1. Manage wallets and use tokenisation

2. Optimise your transaction messages

3. Develop a balanced re-try strategy

4. Build advocacy and outreach with issuers

Lee Clifton

Lee Clifton is head of strategic clients at J.P. Morgan Merchant Services Europe, the merchant acquiring and payment processing arm of J.P. Morgan Chase & Co. Lee is a global payments strategist and thought leader with experience in delivering transformational change in payments optimisation strategy, international expansion expertise and business model development to some of the world's leading e-commerce merchants.

1.J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via EDC Analysis.
2.AppAnnie.com, 2019. ‘The State of Mobile 2019.’ Accessed February 2019.
3.J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via Grant Thornton.
4.J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.
5.Criteo, Global Commerce Review, United Kingdom, Q1, 2018.
6.J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.
7.J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

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Existing Merchant Service Customers

If you have a technical issue or a question about your merchant account, please call your Relationship Manager directly.
Alternatively, call our merchant support team on:

For Europe: +353 1 726 2909     UK: 0845 399 1130

Further information is available at any time through your Paymentech Online account.

 

Out of Courts Complaints and Redress Procedures

  1. Paymentech has in place complaint resolution procedures to settle complaints of Merchants arising from their rights and obligations under Parts 3 and 4 of the Payment Services Regulations 2018.
  2. If you have a complaint, please contact your Relationship Manager. Your complaint will be addressed in accordance with CPEL complaint policy, which we are happy to provide upon request.
  3. Alternatively, in the event of a complaint, a Merchant may refer the matter to the Irish Financial Services and Pensions Ombudsman or such relevant out-of-court complaint body or to such other competent out-of-court complaint body applicable to you in the country where you are established.
  4. You can contact the Financial Services and Pensions Ombudsman at:

Lincoln House,
Lincoln Place,
Dublin 2,
D02 VH29,
Ireland
Tel: + 353 1 567 7000
Email: info@fspo.ie
Website: https://www.fspo.ie