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How payment apps are helping e-commerce

Hero Mobile Payments No V2 Hero Mobile Payments No V2 Placehoder
BY: JULIA ALM

A majority of e-commerce traffic now comes from mobile phones and the growth of mobile e-commerce is having a big effect on how we pay. For online merchants, adapting to these new behaviours is vital if you don’t want to risk losing customers. And in the Nordics, that means offering mobile payment apps like Swish, Vipps and MobilePay in your online store.

Over the past few years, people in the Nordics have become accustomed to the convenience of using mobile payment apps to pay each other. Now, those apps are also becoming a force to be reckoned with in the world of e-commerce. In fact, the market for mobile payments has grown at a record pace over the past few years and it looks like the best is yet to come. By 2020, the site Subscriptionally estimates that mobile commerce will make up 45 percent of total e-commerce revenue.

There are many reasons why consumers are choosing to pay with apps rather than physical cards. Two of the biggest reasons are speed and convenience. Since consumers don’t have to manually enter their card information, and are already using their phone to make the purchase, payment apps are simply an easier alternative. And since the Nordics are considered as a region that’s quick to adopt new innovations, it’s no surprise that mobile payments are growing so quickly here.

The dominant payment apps in the Nordics are Vipps in Norway, Swish in Sweden and MobilePay in Denmark and Finland. Even though these apps haven’t been around for very long they have already amassed 13 million combined users, equal to about half of the population of the region. All of these apps started out as peer-to-peer payment solutions but have now evolved into more universal payment alternatives that are used for both in-store and online purchases.

Of the Nordic countries, Denmark is leading the way when it comes to using mobile payment apps in e-commerce. Their app, MobilePay, has quickly established itself as the second most popular payment alternative for online shoppers. It now has 4 million users which corresponds to nearly 70 percent of the country’s population. In second place we find Sweden, the first Nordic country to launch a local payment app, Swish, in 2012. Swish has about 6.8 million users and it’s the fourth most common online payment option among Swedes, and use is rising fast. The popularity of the Norwegian app, Vipps, has also grown at an astonishing rate. Today the app has about 3 million users and it’s the online payment method that grew the most in popularity in 2018 compared to 2017.

Increase conversions with mobile payments

Since more and more customers are now conducting the whole purchasing process, from research to payment, on their phones, it’s becoming increasingly important for online merchants to offer a mobile-friendly experience. Today, a majority of e-commerce traffic comes from mobile but desktops and tablets still generate more revenue. One reason for this disparity might be that cart abandonment rates are a lot higher on mobile and a big contributing factor is the lack of mobile-friendly payment processes. In fact, statistics from Baymard show that 27 percent of online shopper abandon their carts because of long and complicated checkout processes. By letting your customers pay with a payment app on their phone, you greatly increase the simplicity and convenience and cut down the number of steps in the process.

Another reason to offer these apps as payment alternatives in your online store is freedom of choice. According to a survey carried out by Postnord, 72 percent of Nordic consumers say that being offered a wide variety of payment options was either “important” or “very important” when shopping online. That is why offering your customers the opportunity to pay with convenient apps like Swish, Vipps and MobilePay, that they are already using and are comfortable with, can help minimize the number of customers that abandon their purchases during the payment process.

That payments are becoming more mobile is a matter of fact and it’s creating new consumer behavior. For merchants, staying ahead of the curve when it comes to payment options is a must. At Bambora we follow this development closely in order to offer our merchants the most relevant payment options on their market. That is why our online product Bambora Checkout gives you the opportunity to accept payments from all the large Nordic payment apps: Vipps, Swish and MobilePay. That’s 13 million Nordic consumers (and counting) that you can now offer an even better shopping experience.