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Merchants that use PayPal-owned payment gateway Braintree will be able to offer Visa Checkout, Visa’s buy button offering, as a payment method beginning in early 2017.
Merchants will be able to integrate Visa Checkout through Braintree’s software development kit (SDK). That could bring Visa Checkout to a number of major digital-native merchants, including Uber and Airbnb, which have customers who might be interested in using buy buttons for purchasing.
The offering will likely help push more of PayPal’s offerings to card-based payments. Historically, card networks like Visa felt disintermediated by digital players like PayPal, because PayPal encouraged customers to fund accounts directly through bank accounts, therefore causing card networks to lose out on transaction fee revenue. But PayPal and Visa recently announced a deal in which PayPal would better promote Visa cards as an option for PayPal transactions in exchange for more in-store PayPal support.
The Visa Checkout-Braintree integration likely reflects this deal — though Visa Checkout allows customers to pay with non-Visa branded cards, it could help push more of Braintree’s volume to Visa products and make its customers more aware of Visa offerings. That’s especially true because Visa Checkout, which boasts an 86% completion rate from shopping cart, could gain popularity among customers of Braintree merchants, who tend to be young, convenience-oriented, and digital-savvy.
As digital payments rise, mobile payments are also becoming more popular. But they still face some high barriers, such as consumers' continued loyalty to traditional payment methods and fragmented acceptance among merchants. But as loyalty programs are integrated and more consumers rely on their mobile wallets for other features like in-app payments, adoption and usage will surge over the next few years.
Evan Bakker, research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on mobile payments that forecasts the growth of in-store mobile payments in the U.S., analyzes the performance of major mobile wallets like Apple Pay, Android Pay, and Samsung Pay, and addresses the barriers holding mobile payments back as well as the benefits that will propel adoption.
Here are some key takeaways from the report:
In our latest US in-store mobile payments forecast, we find that volume will reach $75 billion this year. We expect volume to pick up significantly by 2020, reaching $503 billion. This reflects a compound annual growth rate (CAGR) of 80% between 2015 and 2020.
Consumer interest is the primary barrier to mobile payments adoption. Surveys indicate that the issue is less the mobile wallet itself and more that people remain loyal to traditional payment methods and show little enthusiasm for picking up new habits.
Integrated loyalty programs and other add-on features will be key to mobile wallets taking off. Consumers are showing interest in wallets with integrated loyalty programs. Other potential add-ons, like in-app, in-browser, and P2P payments, will also start fueling adoption. This strategy has been proved successful in China with platforms like WeChat and Alipay.
In full, the report:
Forecasts the growth of US in-store mobile payments volume and users through 2020.
Measures mobile wallet user engagement by forecasting mobile payments' share of their annual retail spending.
Reviews the performance of major mobile wallets like Apple Pay and Samsung Pay.
Addresses the key barriers that are preventing mobile in-store payments from taking off.
Identifies the growth drivers that will ultimately carve a path for mainstream adoption.
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