PayPal Brings One Touch Payments to Online Transactions

PayPal, eBay Inc's electronic payments division, said on Tuesday it will extend its single-touch payment service from mobile devices to online transactions to try to reduce the $4 trillion in merchandise abandoned in retailers' online shopping carts every year due to complicated checkout procedures.

PayPal One Touch, which is widely used by shoppers on mobile phones, is designed to ease checkout flows that have users bouncing between screens and typing in personal information, which leads to millions of unfinished transactions.

The average documented online shopping cart abandonment rate is 68 percent, according to the Baymard Institute, an e-commerce research firm.

PayPal One Touch will allow customers a secure checkout across PayPal-enabled websites with a single touch, without having to re-enter login information, Anuj Nayar, PayPal's senior director of global initiatives said in an interview.

The move to offer a simple, seamless checkout experience is not only spurring competition online but in stores with digital wallets such as Apple Pay and Google Wallet.

Earlier this month, eBay reported a higher-than-expected quarterly profit as revenue surged from its payments business that includes PayPal, which the company said would be spun off in the third quarter.

eBay has relied heavily on its payments business to offset sluggishness in its marketplace business, which includes its core global e-commerce platform ebay.com. PayPal said in April it would continue charging eBay merchants less than it does other merchants and the two companies would stay interdependent for the next five years.

The business has benefited from a surge in payments using mobile devices as customers increasingly use their smartphones and tablets for online shopping. PayPal's mobile payment transactions, which account for nearly one-third of its total transactions, rose more than 40 percent in the quarter.

Average transactions per PayPal account rose to 23 in the quarter from 21, PayPal President Daniel Schulman had said, who is set to be appointed the chief executive of the spunoff company.

Edited by NDTV staff from original story by Reuters