VLEUTEN | Last September, Rabobank, one of the larger commercial banks in the Netherlands, updated its iOS and Android banking app to optimise iDEAL checkout on tablets and smartphones. Rabobank expects that the use of payment method iDEAL on mobile devices will take off in the coming months as checkout has been simplified and mobile checkout abandonment should drop.
Payment Method iDEAL
iDEAL, the most popular online payment method in the Netherlands, is basically just an online bank transfer from shopper to merchant. Upon iDEAL checkout, the online shopper is redirected to its online banking environment where payment details and beneficiary are fulfilled. The shopper follows the simple steps to complete the bank transfer and uses the authentication procedure enforced by the bank. The purchase amount is instantly taken from the account and settled, normally within 1 working day, to the beneficial online merchant.
Authentication Hurdle for iDEAL mobile checkout
Before Rabobank's banking app update, consumers always had to authenticate with a so-called CAP reader generating a one-time code to complete the online purchase. There were two important aspects to this authentication procedure causing shopping carts to be abandoned at the final stage.
CAP-reader Needed to Complete iDEAL payment
For starters, online shoppers always had to have the Rabobank CAP-reader with them to complete purchase. This small calculator look-a-like device, is not something consumers really like carrying in their pockets. As a result, most of the time the device is left at home meaning one can not perform an iDEAL transaction on-the-go. When shopping from home on tablet and from the comforts of the couch, the CAP-reader is often not within arm-length reach, also resulting in a missed sale.
Secondly, the authentication process itself, having to use your bank card, to insert it into the CAP reader, and the time-consuming code generation process, are assumed to be a burden for mobile checkout via iDEAL. In Rabobank's case, the consumer would need to enter a personal 4-digit PIN code and a additional unique 8-digit code security code to generate a new code. This new, one-time-code then needs to be entered to complete and approve the pre-filled bank transfer. Both aspects are assumed to have negatively impacted mobile conversion rates and mobile commerce spending when iDEAL is preferred by consumer or pushed by the merchant.
Rabobank Update: Mobile iDEAL payments simplified
After the update of its banking app, Rabobank consumers do not have to use the CAP-reader for most of their mobile iDEAL checkouts any more (depending on the limits that the consumer has chosen). Upon checkout, they are directed to their banking app where they simply enter their pre-registered and personal 5-digit pascode (they should know by heart) and confirm payment by just a few 'clicks'. No CAP-reader and one-time code needed.
Rabobank iDEAL figures
Rabobank latest figures show that around 10% of all iDEAL payments by Rabobank clients are done via Mobile iDEAL (originating from the banking app). Consumers really appreciate the improved checkout process and payment convenience. On working days, Rabobank sees increased iDEAL traffic after 15.00 hours with a clear peak around 21.00 hours, most probably coming from 'couch-commerce'.
Improved iDEAL checkout experience
To further improve the Mobile iDEAL checkout experience, Rabobank clients are now able to pay via their banking app up to 250 euro per week to unknown beneficiaries (e.g. merchants they have never transacted with before) and transfer up to 1000 euro per week to known people or online businesses. These measures certainly drive mobile spend using iDEAL and will most probably contribute to mobile commerce in the Netherlands in general.
New iDEAL transaction record
This October, once again iDEAL broke a new record by recording over 12.5 million iDEAL transactions in one single month. The total number of iDEAL transactions for this year (January to October) are 114 million, almost the same number for the total of 2012. For this year the number of iDEAL transactions are projected around 143 million payments (+22%).
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