How to Take Advantage of Mobile Shopping

Alex ForbessEcommerce2 Comments

How to Take Advantage of Mobile Shopping

If the holiday shopping season has taught us anything so far, it is this: mobile shopping will continue to grow as the point of purchase. Thanksgiving and Black Friday started the season with a bang after earning $2.36 billion and $5.03 billion in online sales, respectively. Small Business Saturday earned $2.82 billion in online sales. And Cyber Monday? That online-centric holiday earned about $6.59 billion this year.

The most interesting figure can be found within Cyber Monday. On that day, smartphones were responsible for $2 billion in sales. That is more than 40% larger than compared to last year’s Cyber Monday, according to TechCrunch. There are a lot of reasons that explain online shopping growth. It provides more convenience to the consumer and it is another venue for merchants to expand their business. But when comes to smartphones, all of it has to immediacy and seamlessness. Smartphone shoppers are always searching for the best deals whenever and wherever they are located, and they expect to perform payments without any obstruction.

E-commerce is only going to get a whole lot bigger and a lot quicker. That is why we wanted to give you the basics on how to expand your business on smartphones. If you are able to manage chargebacks and secure transactions within a vertical frame, you can definitely take advantage of the value of mobile screens. This value can range from customer experience to monetization.

Customer Experience Is Going Vertical

Snapchat, Amazon and Facebook. What do these three platforms have in common on a smartphone? Very few obstacles, one-thumb engagement and application programming interfaces (APIs) that quickly respond to customers’ demands. In fact, purchasing online can be seen just as frictionless as creating a post on social media. With only a few movements with a thumb, customers can relieve themselves of the burden to shop in-store.

How much of a shopping impact did smartphones make this year? Out of the 47.4% of site visits on Cyber Monday, 39.9% of these visits came from smartphones. Smartphone traffic overall grew 22.2% on a year-on-year basis. Apple’s iPhones managed to remain ahead of Android smartphones in terms of order values; iPhone’s average order value was $123 while Android smartphones’ average order was $110, according to Adobe Analytics.

Illustration made by author.

So, what does all of this mean to you? Mobile shopping is going to be, and it may already be, the next frontier of transactions. It will require some adjustment in order for you to properly engage with customers from the palm of their hands. Let us dive into the most important topics of mobile transactions: chargeback management and near field communication (NFC) terminals.

CNP [friendly] fraud: prevent it before it happens

Based on the insights from one of our previous articles, the most effective way to prevent chargebacks is to directly inform customers about their rights and how you can resolve their disputes way better than their issuing bank. The problem with most mobile consumers is they want to go on your site, make a purchase and hope to get out sooner than later. How can you inform them within this tight timeframe–and within such a small screen?  

I. Place policies within view of landing page/checkout page

And when we mean ‘within view’, we mean within frame when customers land on your website without needing to scroll down. The image below is a good example. The return policy and shipping policy tabs are clearly visible before customers click onto checkout. And it is placed within view of the estimated price.

II. The Chargeback App Has Your Back

We know how important it was to give you all the necessary tools to manage chargebacks from in-store, online and mobile app transactions. The Chargeback App works great for apps that sell stuff directly to customers. This means that no matter where your customers are located, and no matter what screen they are engaging with, the Chargeback App has your back on all fronts of transactions.

III. Know the ‘Ins-and-Outs’ of SmartPhone Payment Systems

Remember the good ol’ days when you started accepting payments via PayPal? Then Amazon became a pervasive competitor among online payment systems. But that has not stopped other businesses from joining the e-commerce market, which now include phone manufacturers themselves. Apple (Apple Pay), Google (Android Pay) and Samsung (Samsung Pay) are a few examples of phone manufacturers that are making efforts to be the sole carrier of transactions.

And on top of that, each of these phone manufacturers have their own procedures to handle chargebacks. This could add more confusion after mastering other systems like PayPal (click here for a review on how to handle PayPal chargebacks).

Here is what you need to know on how to handle disputes and chargebacks from the following payment systems:

Apple Pay

Apple Pay handles chargebacks and returns relatively similar to any credit card company. For instance, Apple classifies a card-present (CP) transaction when customers use Apple Pay in-store. If they use Apple Pay within an app or on a website, that is classified as a card-not-present (CNP) transaction. And when it comes to fraud, Apple Pay transactions and its liability rules are treated the same in-store as if fraud occurred directly from a traditional credit card.

But if fraud occurred within an app or on a website, there are two things you need to keep in mind. One is that Apple Pay transactions are treated more favorably than transactions from a traditional credit card. This means that because of the additional security needed to approve an Apple Pay transaction, from an iPhone’s passcode to the iPhone X’s Face ID, you receive more reassurance that fraud will not affect you. Furthermore, the liability of fraud can potentially shift to the issuing bank, not you. But that does mean you are clearly off the hook from future disputes and chargebacks. Your specific acquiring bank will have more detailed information on what liability is shifted to them.

Now, what about handling returns or responding to chargebacks? Apple Pay develops device account numbers that mask the cardholders’ credit card numbers. You will see this number within your transactions history, not the credit card number. For example, when customers return an item, you will need to ask them to provide the last four digits of the device account number, as shown in the image below. Just instruct them to tap on the blue ‘i’ icon, and they will find this number right below the last of the last four digits of their credit card number.

When it comes to chargeback responses, simply including the device account number in your rebuttal. The issuing bank will have the full device account number, and they will be able to verify if this number is associated with the credit card in question.

Samsung Pay

Like, Apple Pay, Samsung develop private-labeled account numbers in order to help keep track of a customer’s transactions. According to Apple and Samsung, neither of them will store a customer’s actual card number. Furthermore, Samsung is more transparent in disclosing they will share the customers’ private information to the issuing bank if they are victims of fraud. Samsung also states in their terms of service that they have no control over chargebacks, which includes all related proceedings. They only provide the private-labeled number in your transaction history, and you will need to respond accordingly.

Android Pay

Android Pay is Google’s version of a digital wallet. It works on all Android devices and Google Pixel phones. And like Apple Pay and Samsung Pay, Android Pay develops a private-labeled number that verifies the approved transaction. The chargeback procedures are similar to those that involved a traditional credit card. But instead of a device account number or a private-labeled number, Android Pay provides a tokenized card number that is agreed upon by the following parties:

  • Mobile device manufacturers
  • Payment terminal providers
  • Payment Networks
  • Token Service Providers (TSPs)
  • Card issuing banks

How to Set Up an NFC Terminal

Remember how frustrating it was to adopt EMV technology? Well, near field communication (NFC) is another adoption you will need consider if you want any transaction from the above mobile payment systems. You may already have NFC capabilities from your current terminal, especially if it is an Ingenico or a Verifone brand. You can easily find an affordable EMV-NFC terminal on specialist sites such as Square. Amazon is another venue where you can compare EMV-NFC terminals. Here is what you need to know about NFC technology:

One-Way Communication: Terminal to Smartphone

Whenever a customer places his or her phone near a terminal, the terminal reads the account number and writes a subtraction to the cardholder’s card. According to CNET, any hacking attempts are much more difficult because of a chip called the secure element (SE), and this protects the communication between the terminal and the cardholder’s smartphone. Once the cardholder approves the transaction with, let’s say, her fingerprint, the SE validates that approval and relays the message to the NFC terminal. The image below explains this process in more detail.

Illustration made by author.

Benefits of Mobile Shopping

What else can you expect from mobile shopping? For starters, customer experience will improve significantly. If customers have fewer barriers to approve a transaction, that allows them to spend more time browsing on your website or visiting your store.

All of these payments allow you to create loyalty programs that are more personal to your customers, which can allow you to increase your retention rate. This allow brings more opportunities to develop subscriptions that are tailored to certain customers on different phones. And finally, more liability for chargebacks and fraud has been placed on the phone manufacturers and the customers.

For example, the extra security involved in NFC implies that the phone manufacturer has every measure to be a secure carrier of transactions. On your end, you will need to be certain that your NFC terminal is updated and sufficient to receive said transaction. From a customer’s standpoint, all of the mobile transactions will require them to provide their passcode or fingerprint.

If a customer files a non-authorization dispute, the mobile payment system involved will offer any necessary information related to this case. This can include the secure element (SE) that gave the final approval for the disputed transaction. Unless if a hack did occur, it will be very difficult for the customer to verify the dispute.


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