How does one-click checkout work?
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How does one-click checkout work?
In this article, we will tell you everything you need to know about ‘one-click checkout’. We’ll explain when it was first used and why it took until after 2017 to really take off. We’ll also discuss how one-click checkout works, which product lines are most suitable for one-click checkout and why there are many advantages and just a few disadvantages to what is a simple but clever solution to an age-old online shopping problem.
What is one-click checkout?
Also known as “1-click checkout” and “Fast one-click checkout”, one-click checkout is a simple online sales tactic that enables shoppers to access their online shopping carts and make the purchase with a single click.
The “1-click checkout” button was patented by Amazon in 1999 and leased to Apple’s online iTunes store in 2000. It was designed to increase sales conversion by reducing cart abandonment.
Cart abandonment has been an e-commerce shopping challenge since the internet became an e-commerce shopping channel. That’s why Amazon created the one-click checkout experience in 1995 when they were predominantly an online bookstore. Cart abandonment was a problem then, as it is now. In fact, some studies estimate that 70% of carts are abandoned before a purchase is made.
Once Amazon’s 1-click checkout button patent expired in 2017, one-click checkout buttons began to be adopted by online retailers who had been enviously watching Amazon perfect the one-click method checkout. The one-click button is now free for any e-commerce platform to adopt and is extremely popular, for reasons we will explain.
How does one-click checkout work?
Whilst the exact process does vary a little depending on the business and payment processor involved, the one-click experience generally works like this:
1. If the customer isn’t registered with the e-commerce store that offers one-click checkout, then they are asked to input their payment details for their credit card, debit card, or bank account.
2. This payment method is stored by the payment processor and tagged to the customer’s account, so the customer can access it in the future by logging in to their account or using their email address.
3. When the customer makes an online purchase with any e-commerce retailer that uses the same one-click checkout provider, their payment details are accessed, enabling them to complete the transaction in a single click.
What products work best for one-click checkout?
One common question we get asked is ‘If one-click checkout is as simple and as effective as it sounds, and it is one of the reasons why Amazon have been able to reduce cart abandonment, why don’t all retailers use it?’ Well, the answer is that many e-commerce retailers are still catching up. But the reality is that it’s not a tactic that will work for every online retail website. We’ll look at the pros and cons of one-click checkout shortly. But first, let’s look at the products that work best for one-click checkout:
Low-ticket items
There’s a reason why Amazon patented one-click checkout back in 1999. It suited their business model perfectly. There are lots of repeat customers with an average order value that still hovers around US$50. And one-click checkout is great for that. Especially in Amazon’s case, customers purchase more than one item from multiple providers.
But as good as one-click checkout is, it does have some flaws. One major problem is that the one-click experience can rush customers through their decision-making process. That’s fine for low-ticket items where the buying decision can be made before the customer has even identified a supplier. But it doesn’t work as well for more expensive consumer products such as technology, bikes, or furniture.
Shoppers buying high-ticket items online could feel rushed and a little alarmed with a one-click button. And the last message you want a shopper to have is “this doesn’t feel right” because it leads to cart abandonment and indecision. That’s why a "view cart" page is often a good addition before the “buy now” button.
High number of returning customers
If your website attracts many returning customers, they are likely to love a one-click checkout button. And why wouldn’t they? The one-click checkout helps them swiftly and painlessly order more items without re-entering their details. After all, the information they originally supplied will prefill the fields in the checkout form.
Impulse purchases
Impulse buys do well on one-click checkouts. In fact, just having the one-click button can help your online store become better suited for impulse purchases. Impulse items are perfect because these types of products are a low investment and eye-catching. One-click checkouts can help speed up the consumer decision-making process.
What are the benefits of using a one-click checkout?
Offering a one-click checkout button provides a wide range of benefits, including the following:
- Increased conversion rates - One-click checkout offers a speedy transition from virtual window shopping to buying. Such transitional speed is a powerful tool because it reduces friction in the buying journey. And it increases conversion rates.
- Less dwell time – One-click checkout speeds up the buying process and reduces the dwell time buyers typically have to reflect on their purchase decisions.
- Streamlined experience – Increasing efficiency by eliminating steps in the checkout process has got to be a good thing. And the one-click checkout button helps this streamlining.
- Lower % of cart abandonment – Cart abandonment can be shockingly high. The above three benefits (speedy transition from browsing to buying, reducing dwell time, and streamlining the experience) lead to reduced cart abandonment.
- Higher customer retention – Simplifying the checkout process helps create a better customer experience, inevitably leading to increased customer retention.
- It works great on mobile – Although one-click checkout was designed before shopping on mobile devices was a thing, one-click was made for mobile, where shoppers are more likely to lose focus if they must enter information manually. Plus, smaller screens call for less content and fewer steps.
- User-friendly - Single-click systems are user-friendly, especially when the purchased item is relatively low, and the user is less likely to need thinking time between browsing and buying.
- Less ordering errors - Ordering errors, such as an incorrect payment card account number or shipping address, are unlikely given that this data is already stored and has been used previously.
What are the disadvantages of a one-click checkout?
Because one-click checkout is such a popular tactic, we did have to think carefully when writing this section. Are there any drawbacks to such a great idea? Well, yes there are. As we have pointed out, it doesn’t suit everyone. Let’s look at the reasons why.
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It’s a slow start – For one-click checkout to work, customers will need to provide their payment details to the payment processor so that they can be stored on file for future purchases.
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One off purchases – Because one-click checkout doesn’t work the first time, it’s not suitable for e-commerce sites that have low repeat business because what they are selling is specialist or unlikely to be bought regularly.
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Log-in requirements – One-click relies on the user’s details being held and identified by the payment processor, which, in many cases, the shopper would need to log in first and use their password.
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Sowing seeds of doubt – Providing a seamless cart experience can, from some consumer's perspectives feel like they are being rushed. And this may heighten with brands that they are less familiar with.
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Increase in mis-orders – One casualty of checkout efficiency is shopper complacency. And a swift checkout process may result in the shopper not reviewing their cart properly, leading to more returns and chargebacks.
How to implement a one-click checkout solution
It’s important that the shopper is one-click ready when they click that all important button. So, ensure that the checkout page displays all relevant details clearly, including the product details, price, delivery cost and shipping information. This is important because whilst one-click checkouts can reduce cart abandonment, they can increase returns or chargeback if not implemented correctly.
Speak to your payment processor to find out about their one-click checkout solution. If the payment processor is new to you, then check that they are PCI DSS compliant as they will be storing your cardholder details for future use, and it’s important that they are storing this confidential data securely.
You should also consider the types of payment methods offered to your customers because it is important that they can use a method they are comfortable with.
Key takeaways
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One-click checkout is a simple online sales tactic that enables shoppers to access their shopping carts and purchase with a single click.
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One-click checkout was first used by Amazon in 1995. They patented the “1-click checkout” button in 1999 and leased it to Apple’s online iTunes store in 2000. The patent expired in 2017, opening the gateway for e-commerce providers to follow suit.
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The one-click experience starts with the customer inputting their payment details for their credit card, debit card, or bank account. This payment method is stored by the payment processor and tagged to the customer’s account so that the customer can access it in the future by logging in to their account or using their email address. When the customer makes an online purchase with any e-commerce retailer that uses the same one-click checkout provider, their payment details are accessed, enabling them to complete the transaction in a single click.
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One-click checkout is particularly well suited to retail sites selling low-ticket items, impulse buys, or those with a high percentage of returning customers.
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Online retailers can benefit from using one-click checkouts in several ways, including increased conversion rates by creating less dwell time and a streamlined experience. It also helps reduce the likelihood of cart abandonment, increase customer retention, and reduce ordering errors. It is also a user-friendly experience that works well on mobile devices where users are time short and using a small screen.
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There are some disadvantages too. For one-click checkout to work, customers will need to provide their payment details to the payment processor so that they can be stored on file for future purchases. It’s not well-suited for online sites that attract one-off purchases. It does require users to be logged in to the online website. Creating such a fast check-out process can increase the chances of mis-orders leading to more returns and chargebacks. And providing a seamless cart experience can make some consumers perspectives feel like they are being rushed, sewing seeds of doubt about the purchase or online retail provider.
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Speak to your payment processor to find out about their one-click checkout solution. If the payment processor is new to you, check that they are PCI DSS compliant and ensure that you offer the right payment methods for your customer audience.
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When implementing a one-click checkout solution, it is important that the checkout page displays all relevant details clearly, including the product details, price, delivery cost and shipping information. Not doing so can increase returns or chargebacks.
FAQs
What is cart abandonment?
Cart abandonment is used as a term to describe shoppers who leave an e-commerce shopping cart and fail to return to it. It can often be described as a percentage, with some studies estimating that 70% of carts are abandoned before a purchase is made.
Is “1-click checkout” and “Fast one-click checkout” the same as “one-click checkout”?
Yes. Like many terms, there are some alternative phrases to one-click checkout. The one-click checkout methodology was patented by Amazon in 1999 as “1-click checkout”. The patent ended in 2017 when it was widely adopted by online retailers as a “one-click checkout” experience.
Is one-click checkout secure?
Yes. Because one-click checkout uses technology created by the payment processor and therefore, e-commerce retailers using one-click checkout can expect fraud protection and PCI-validation compliance.
Is one-click checkout suitable for all e-commerce sites?
No. It works particularly well for websites selling impulse items or low-ticket items where the buying decision can be made before the customer has even identified a supplier. But it doesn’t work as well for more expensive consumer products where shoppers could feel rushed with a one-click purchase decision. It’s not suitable for websites that attract one-off purchases or that have a low number of returning customers.
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