Jumio Reveals Retail Losses Tied to Payment Friction Exceed 25 Percent of Total 2013 Mobile Commerce Sales
Palo Alto, Calif. – Jan. 14, 2014 With the holiday retail season now in the rearview mirror, Jumio, Inc. today released its 2013 mobile commerce analysis, finding that retailers celebrated the most successful mobile holiday shopping season to date, yet still missed out on billions of dollars in sales due to the prevalence of outdated mobile payment experiences. While shoppers increasingly took to their smartphones in search of the perfect gift, lost sales were equivalent to over one-quarter (27 percent) of total mobile commerce profits, according to Jumio’s analysis.
Data released by the National Retail Federation shows that holiday sales overall totaled $601.8 billion with online purchases accounting for $95.7 billion. According to IBM, 16.6 percent of online sales during the fourth quarter were made on mobile. But, according to a recent Harris poll, 47 percent of shoppers abandon purchases on mobile devices due to payment friction, and the majority (57 percent) do not attempt the transaction later on a computer, meaning nearly $15.9 billion was left on the table by retailers this holiday season in the form of lost sales.
“While consumers abandon mobile shopping carts for a variety of reasons, from slow network speeds to high shipping costs, the most significant among them is entirely under a retailer’s control – removing payment barriers,” said Daniel Mattes, founder and CEO, Jumio. “On the whole, retailers with mobile apps have done a remarkable job with most aspects of their mobile shopping experience and this season’s numbers certainly show that. However, checkout pages and payment methods have not kept pace with what smartphone devices and services can do today to streamline those processes. This cost the industry billions of dollars this holiday season. Good news is that we expect that number to diminish as new technologies take root.”
In addition to revenue lost due to payment friction at the time of checkout, retailers risk losing money on future purchases as well, with 63 percent of consumers less likely to buy from the same company via other purchase channels after abandoning a mobile transaction due to a poor experience, according to the recent Harris poll. While nearly one-half of consumers (47 percent) said they failed to complete a purchase because the checkout process took too long, other reasons shoppers don’t complete a mobile transaction include:
• 51 percent reported they didn’t feel safe entering their credit card information
• 41 percent said the checkout was too difficult on their device
• 23 percent said they failed to complete their purchase because it would not go through
“As mobile commerce sales increase each year, retailers need to offer a mobile checkout process that caters to on-the-go shoppers,” continued Mattes. “Increased security measures to protect consumers and merchants as well as more convenient payment options are essential in creating the seamless mobile experience necessary to drive purchases from the cart to the front door.”
Utilizing advanced computer vision technology, Jumio is a next generation credentials management company offering payments and ID scanning & validation products for mobile and web transactions. Designed to reduce fraud and increase revenue by minimizing friction in customer transactions, Jumio’s products integrate easily into mobile apps or websites and create great customer experiences. Jumio’s products are widely used by leading retailers, marketplaces and financial institutions.
Jumio’s recently unveiled PORT, a secure device-based wallet infrastructure, allows consumers to conduct one-click purchases and transactions requiring identity verification, without the need to download a standalone wallet app. Netswipe® enables customers to scan their cards in online and mobile checkout resulting in increased revenue and reduced fraud for the merchants. Netverify® supports real-time ID verification in over 90 countries to help clients meet a variety of know-your customer requirements.
The company was founded in 2010 by CEO Daniel Mattes and is backed by top tier investors including Andreessen Horowitz, Citi Ventures and Facebook Co-Founder, Eduardo Saverin. Headquartered in Palo Alto, California Jumio operates globally with offices in the US, Europe and Asia.