PayPal One Touch: Customers spend more when it’s easy to pay.

PayPal Just Made Your Online Impulse Purchases Even Easier

PayPal Just Made Your Online Impulse Purchases Even Easier

Moneybox
A blog about business and economics.
April 28 2015 2:42 PM

PayPal Just Made Your Online Impulse Purchases Even Easier

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Photo by Joe Raedle/Getty Images

Venmo is a small slice of PayPal’s business, relatively speaking, but it still accounts for a tremendous amount of transactions. In the fourth quarter of 2014, Venmo posted a total payment volume of $906 million, up 29 percent from the previous quarter and nearly half of the $2.4 billion it processed that whole year. There are, of course, lots of factors that explain Venmo’s success, but one of the most important is the app’s simplicity. Paying a friend on Venmo requires only a few steps: Find the person, fill in the transaction amount and reason, tap to pay, tap to confirm, and voilà!

Now it looks like PayPal wants to bring that same simplicity to its main product, announcing on Tuesday that its “One Touch” payments system will be made available to PayPal’s 165 million customers on all platforms. One Touch simplifies the user experience so that instead of filling out a bunch of payment details and personal information on each transaction, you simply sign in, review the specific purchase or charge, and then click OK to confirm. An estimated $4 trillion worth of purchases will be left sitting in online shopping carts in 2015. With One Touch, PayPal is hoping that completing the transaction may finally be easier than abandoning it.

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One Touch rolled out to native mobile apps last fall and, since then, has led to major sales increases for merchants, PayPal says. The best comparison to One Touch might be an Amazon account. Sign into Amazon and a seemingly endless amount of merchandise becomes available to purchase with a few clicks. Of course, the features that make online payments most convenient are also often the ones that make them the least secure. The social ease and simplicity of Venmo also renders it more vulnerable to fraud and so-called social engineering attacks. But what’s also true is that people largely seem to prefer “frictionless” systems to highly secure but cumbersome ones. And at any rate, PayPal One Touch isn’t quite one-touch simple. If we're being technical about it, there are two clicks involved.

Alison Griswold is a Slate staff writer covering business and economics.