Retailer Alternative Payments Acceptance: Online and Mobile

Navigator Edition: Mobile Commerce & Alternative Payments: SPECIAL EDITION
By: Jeff Crawford

First Annapolis regularly tracks the acceptance of payments products at the leading e-commerce retailers. These merchants represent a significant portion of overall e-commerce and therefore provide an important perspective on the opportunity for new payment products. This year, the mobile channel and mobile commerce will be added the Top 100 Remote Commerce Payments Acceptance & Mobile Functionality Study due out in late Winter.

Figure 1:  Top Retailer Payment Practices:  Online vs. Mobile (2011)


Source:  Retailer websites, and First Annapolis Consulting research and analysis.

In the meantime, First Annapolis completed a first look at the online acceptance of payment products and the use of mobile payments at ten leading retailers including Amazon, Staples, Apple, Office Depot, Walmart, Sears, Office Max, Best Buy, Costco and Macy’s. Highlights from this first look include:

Online Acceptance

  1. Seven out of ten leading retailers accept at least one alternative payment (including PayPal, BillMeLater, Google Checkout, eBillme, Amazon Payments, and e-Check/ACH products). The dominant products are PayPal and Bill Me Later (both owned by eBay). Only two leading retailers, Walmart and Sears, offer more than one of these methods, which is relatively unchanged from 2009 and may indicate limited desire or capacity among retailers to have a broad alternative payments strategy.
  2. Of the nine retailers that utilize plastic gift cards, only two also offer eGift cards, a newer, virtual-only, product.
  3. All retailers also offer consumers the ability to store payment credentials for purchasing. This functionality, while not groundbreaking, is an important component of migrating to the mobile channel and other device interfaces (see Figure 1).
  4. Eight out of 10 retailers advertise either their co-brand or private label credit card on their home pages, and a similar number of the retailers studied attempt to steer consumers towards these products by making specific offers related to their co-brand or private label credit cards.

Mobile Acceptance

  1. All 10 retailers offer a mobile solution through an application, a tablet solution, and a mobile web offering indicating a high level of interest in mobile. Only Costco does not have the complete set of channels, offering only mobile web.
  2. Similarly all 10 of the retailers enable shopping and purchasing via mobile. The consumer experience and look and feel of the process varies widely. Some mobile web sites are streamlined versions of the online site, while other apps offer more advanced commerce and account management capability.
  3. All of the retailers enable mobile purchasing through credit cards, while only one of the ten offers an alternative payment option (Sears with PayPal). Nine of the ten also enable stored credentials, reflecting the importance of reducing steps and minimizing keystrokes in the mobile channel and key strokes on mobile phones and tablets. Also, the storage of payment credentials that are accessible via a mobile app represents a form of a mobile mobile wallet. These cloud-based, retailer-driven wallets that are integrated with the mobile shopping flow will be credible alternatives to the multi-account wallets that are currently grabbing the industry spotlight.
  4. Promotion of specific payments products is more limited than in the on-line channel, with only one retailer, Sears, making payment specific promotions via mobile. This is likely due to the newness of the channel and also the limited space on the mobile device to make such offers.

This first look indicates that most top retailers are fully bought into the mobile channel, but that the payments functionality is still evolving. Moves by Walmart, in particular, with the creation of the @WalmartLabs group, the acquisition of mobile development companies, and the roll out two new mobile apps in 2011 confirms the importance of mobile. However, the unique features of mobile including a smaller device, the potential for 1:1 marketing with location-based services, and possible integration with the point of sale presents retailers with an interesting set of challenges and opportunities. The upcoming full Top 100 Remote Commerce Payments Acceptance & Mobile Functionality Study will expand deeper into the retailer group and explore these issues more in-depth.

For more information, please contact Jeff Crawford, Senior Consultant specializing in the Mobile Commerce & Alternative Payments Practice Area,

To read the rest of this article, please subscribe to

The Navigator Newsletter