For people not in the know, the 1-click checkout process available at Amazon online store is actually a patented check-out technology that is going to expire in September, 2017. As basic as it seems, the retail giant fought for its patent for almost 2 years when it was eventually awarded in September 1999 in US.
Request to patent this simple technology has been rejected by many governments in the past on account of it being a simple development that can actually be done by almost any online retailer. The technology has been crucial in earlier years of Amazon to gather critical mass of customers by giving them convenient and faster way to make online purchase.
What is 1-Click Check-Out?
The 1-click or one-click check-out process allows users to save their credentials (credit/debit cards, shipping address etc.) and purchase products without filling in the lengthy forms manually with multiple steps every time they have to purchase something. They don’t need to go to payment details page and are taken directly to final page where they just have to confirm the order. This clearly saves customers time, effort, and the frustration for especially the ones who are frequent buyers.
Without going into detail if it’s actually worth it or not, it is speculated that the 1-Click business is (or probably was) worth $2.4 Billion for the online giant. Apple is the only company that has been licensed this technology and is said is a source of significant revenues for Amazon.
How can e-commerce players benefit from this?
After this expiry, any online merchant can use this technology and offer an improved and faster purchase experience to their customers. Since this will reduce or allow me to say remove friction in payments, customer’s behaviour is expected to change positively. Stickiness will increase leading to higher spending per user.
Given the benefit derived from one-click, there has been a concerted effort from the relevant industry players to work towards the common Payment Handler API under W3C Process. The idea behind is to streamline the payments in a way that individual companies don’t have to create their own version of one-click payments. Currently, there are plenty of similar one-click implementations that do nothing more than storing the credit card and customer’s personal information in their data store and when customer do the checkout they don’t have to fill in the details again. What this standard will enable is, to store the payment details directly in the browser which will be fetched by the website using the Payment Handler API. This standard will pave the way, how payments work today.
How will this impact Amazon?
Well, I think Amazon has become a giant that will not be hurt by this expiry. The brand has a lot more to offer than just a faster purchase process. Wide variety of products and fast delivery are something customer prefer Amazon for and these are the advantages that just cannot be taken away like that.
Are we about to witness a historical event in e-commerce history? Or, is it just an upgrade by merchants in their order placement process that will be implemented without any significant change in industry dynamics? Let’s just wait and see.