Online marketplace eBay will now accept payments from Venmo, the second most popular U.S. payments platform, in a strategic move to attract younger consumers. In 2023, Venmo boasted 90 million users, with 28% of them falling within the sought-after 18 to 29 age group.

eBay expects the addition of Venmo will lead to more sales and less abandoned carts. Approximately 60% of eBay’s volume originates from mobile devices, making this a logical step in its initiative to attract digital natives. 

“The ability to pay with Venmo at checkout continues eBay’s push toward tapping into a younger demographic with Venmo’s heavy adoption among Gen Z and Millennials,” eBay noted. “In addition to Venmo, buyers on eBay have the option to pay with a breadth of popular and relevant payment methods…including major credit and debit cards, digital wallets, and BNPL.”

Building Awareness

The move follows eBay’s announcement that it would discontinue American Express payments in August. One reason for moving away from Amex is because of the credit card company’s “unacceptably high” transaction fees.

Another reason was the growing popularity of alternative payment methods. Customers have begun to gravitate towards digital wallets because they support payments by bank account, credit card, or account balance.

Digital wallets can also be more convenient; in eBay transactions, Venmo users won’t have to continually enter their payment details for each purchase. After a transaction, users can share their eBay purchase on their Venmo feed. eBay hopes this social aspect will build awareness of both its sellers and its marketplace.

Winning Endorsement

The recent news is a win for Venmo after Amazon dropped the payments platform in December. The e-commerce giant never gave a clear reason for moving away from Venmo, but there was speculation that Amazon customers simply didn’t use the payments platform enough.

There are still two million businesses that support Venmo, including Starbucks, Hulu, and Doordash. While the integration into eBay won’t change anything for seller, consumers will see the option to pay with Venmo starting next week.

The post eBay to Accept Venmo in Play for Younger Demographic appeared first on PaymentsJournal.

As e-commerce continues to grow, the ecosystem faces a multitude of challenges to its successful day-to-day operations. These range from supporting a multitude of new payment methods to navigating through ever more complex fraud, data security, payment processing, and regulatory concerns—as well as taking account of increasing ecological awareness.

What stands out is the exponential rise in online payments which in turn offers exciting opportunities for businesses and consumers. However, this surge brings complexity, more transaction steps, and various payment technologies, leading to increased friction. To address this, enhanced security measures are necessary, but they also pose a higher risk of false rejections.

A recent survey found that 45% of consumers take their business to a competitor after a false rejection without attempting to pay again, and it estimates total losses for retailers at $50.7 billion.

In e-commerce, payment is not only the most vital step for merchants to get right, but also one of the most significant friction points for customers. A frustrating checkout experience leads to abandoned carts and a decline in customer loyalty. Online shoppers expect fast, easy-to-navigate yet secure payment experiences—leaving no room for a poor payment experience. This has an immediate impact on all financial players in the e-commerce market. The only way to success is to improve every aspect of the customer journey.

How Network Tokens Can Help Merchants & Processors

To combat this, network tokens are used to hide the primary account number (PAN) of the cardholder. Providing tokenized value to protect sensitive data such as account numbers and expiration dates at every step of the payment flow helps strike the right balance between security and a seamless customer experience. By improving security and ensuring that card data is always up-to-date, network tokens have the potential to optimize approval rates. Ultimately, this means increased profits and productivity for merchants and successful, secure transactions for processors and banks.

While network tokens aren’t necessarily a new solution for merchants, it’s constantly evolving and important for businesses and payment processors to stay abreast on how this technology has rapidly changed entering 2024.

Processor tokenization is a proprietary service offered by PSPs, acquirers, and processors to minimize a merchant’s PCI scope—the people, processes, and technologies that interact with or impact the security of cardholder data. The general token, which is a replacement for each PAN, is restricted to the merchant and PSP limiting its value in the event of a data breach. Network tokenization goes further by generating tokens in cooperation with the card issuer and card network to offer additional benefits to the merchant and protect the PAN throughout the value chain.

How Does the Transaction Ecosystem Benefit?

The entire payment ecosystem benefits through improved payment authorization rates due to greater trust in the process, along with lower transaction costs realized by merchants and processors benefitting from these authorization technologies. There are also fewer false transaction declines, and reduced overall fraud rates compared to transactions where users’ payment credentials are sent directly. Overall, tokens benefit almost every player in the payment ecosystem.

The technology is especially essential to support the Click to Pay credentials on file that enable today’s consumer experience. For retailers and issuers, the acronym CoF stands for “credentials on file,” but for many consumers, it may as well stand for “concern over fraud.” Approximately 75% of U.S. consumers are concerned about someone stealing their credentials if they store them on file with a retailer, according to Mastercard research. However, that same Mastercard research also shows that 81% of U.S. consumers have saved their credentials on file with merchants they trust and frequent online—because they like the convenience.

But what can we expect entering 2024?

Today, merchants and payment processors are working with solution providers for advanced tokenization technologies. This is because network tokenization remains a largely evolving technology. As such, network tokens are great when they work, but they require a lot of behind-the-scenes heavy lifting with capabilities not offered by the merchants themselves, nor the processors. Each plays a specific role in the e-commerce process, but they do not have the core capabilities to harness the continuing and rapidly evolving changes in the tokenization technology itself. Today’s payment schemes are pushing network tokens aggressively, but they’re still not completely evolved yet for merchants and processors. In fact, the network token architecture currently built today still may not work for all merchants and payment processors alike. Specialized technology partners are equipped to help further ensure the smooth process of network tokenization, keeping everyone’s interests in mind throughout the process.

Today’s New Network-Agnostic Tokenization Solutions

Today’s leading solution providers offer network-agnostic tokenization technologies that sits invisibly behind e-commerce transactions and boosts the e-commerce business for merchants and PSPs by combining the highest levels of security with a seamless customer experience.

In fact, one single harmonized API integration allows merchants and processors to quickly tokenize all the cards in their vault, regardless of network. Technology partners manage the relationships and connections with multiple-schemes on merchants and processors’ behalf, which speeds up time-to-market, and drastically reduces complexity. Furthermore, it opens doors for the latest advancements: by offering value-added services like Click to Pay for guests at checkout.

In the realm of e-commerce, this brings a golden opportunity to maximize online sales. However, as the stakes get higher, so do the challenges. For online merchants, ensuring a smooth payment process isn’t just essential; it’s a decisive part where they compete for customers’ trust. A flawed payment journey can drive customers away, affecting not only e-merchants but also the broader financial ecosystem within the e-commerce landscape. In a world where online fraud has been a concern, it’s essential to prioritize safety without compromising the shopping experience. Enter the dynamic duo reshaping the e-commerce landscape: Click to Pay and network tokenization. Click to Pay simplifies the online shopping experience with a single-click checkout, taking the hassle out of repetitive forms and card details entry.

Together these solutions do more than make shopping easier; they also enhance approval rates and deter fraudulent attacks, ensuring a safer and better experience for your valued customers. But what’s truly remarkable is how these technologies complement each other.

In today’s competitive e-commerce market and challenging economic environment, operational efficiency is essential to capture each possible customer with reliable and secure transactions. And while the payment technologies that support this infrastructure continue to rapidly evolve, the right solution exists from trusted solution provider partners. Fortunately, with the right technology, strategy and partners, merchants and processors can increase their adoption and success rates to make for a great holiday shopping season and an even better 2024.

The post Where Are Merchants and Payment Processors Seeing Disruption With Network Tokenization Today? appeared first on PaymentsJournal.

Retailers and brands have been fiercely competing for customers’ wallet share with enormous discounts, entertaining livestream e-commerce, and innovative strategies during China’s Singles Day (also known as “Double 11”) festival, an annual shopping event that was created by Alibaba in 2009 to celebrate those not in a relationship.

Historically, Singles Day sales total more than Black Friday and Cyber Monday sales combined. Bain & Company estimated that the total gross merchandise value for last year’s Double 11 festival topped $140 billion, while Adobe Analytics reported U.S. consumers spent  $35.3 billion online during the week of Thanksgiving, Black Friday, and Cyber Monday in 2022.

Consumers in China Are Spending Mindfully Amid Slowing Economic Growth

With uncertain economic conditions, consumers in China are spending more cautiously and conservatively this year. More than three-quarters (77%) of Singles Day shoppers plan to spend less or maintain spending at 2022 levels, a Bain survey found. The Double 11 retail extravaganza’s relative attraction has also declined over the years, which is likely due to more promotions being offered throughout the year. Only 53% of consumers reported they were excited by Singles Day, compared with 76% in 2021.

Some consumers are hunting for the best deals, while others are shopping for experiences and health and lifestyle products. Several retailers developed catchy slogans to promote sales, including Alibaba’s “Double 11, Low Price Everyday,” JD.com’s “Truly Cheap,” and Pinduoduo’s “Truly Low Price Every Day.” Spending is down on fast moving consumer products, such as food and beverage, and large durables which are closely tied to the property sector, according to WPIC Marketing + Technologies.

Higher income consumers are generally still spending, especially on categories like athletic apparel, personal wellness, pet care, and luxury products. Brands like Lululemon, Nike, and Starbucks are reporting soaring revenues. More than 200 luxury brands joined Tmall’s Double 11 festivities, including Gucci for the first time. The five major luxury giants, LVMH, Richemont, Kering, Hermès, and Chanel, have collectively released 100,000 new products, including limited edition items, co-branded models, and highly collectible, out-of-stock pieces. Some luxury brands are also offering other perks, such as financing options. Gucci and Burberry offer a 24-month interest-free installment payment plan.

The Rise of Live Commerce

In addition to steep discounts, retailers are trying to capitalize on the livestream commerce trend by combining shopping and entertainment during this year’s Singles Day. Livestream shopping started on social media in China and has grown into a $521 billion market, according to Coresight Research. The trend involves a seller broadcasting live video of themselves showing and explaining products while viewers ask questions and make purchases in real time. Imagine a real-time, interactive social version of QVC where every influencer can channel their inner Billy Mays.

Alibaba launched its livestream app Taoboa Live in 2016, and sales skyrocketed during the COVID-19 pandemic lockdowns. Within the first 30 minutes of Singles’ Day 2020, Taobao livestreams generated $7.5 billion in transactions. Douyin (the Chinese version of TikTok) has also become a major social commerce platform. 

Livestream commerce has not taken off in the United States. While nearly three-quarters (74%) of Chinese consumers said they have bought products through a shoppable livestream in 2022, 78% of U.S said they have never even watched one. Some retail outlets, including Amazon, eBay, Poshmark, Shopify, TikTok, Walmart, and YouTube have been trialing and introducing livestream commerce capabilities.

Amazon launched its Amazon Live platform, which allows influencers to pitch products live from their own homes. Viewers can react with emojis and ask questions that the host can answer live. Each product has an embedded link to streamline purchases.

Best Buy partnered with TalkShopLive to host a three-part 2023 holiday livestream shopping series. Viewers will be able to take advantage of limited-time deals during each show, ask questions about the products, and add items to their cart live by clicking a “buy” button in the video.

With the holidays just around the corner, U.S. retailers are employing traditional and new innovative tactics to attract the most shoppers leading up to Black Friday and Cyber Monday.

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Early Warning® has been at the forefront of developing financial technology solutions for more than three decades. Early Warning’s success can be traced back to its ability to excel in mitigating risk and establishing trust. By partnering with well-established banks and credit unions, the company also gave rise to one of the most successful P2P payment solutions today: Zelle®.

Early Warning began as a specialty consumer reporting agency, helping financial institutions know the status of demand deposit accounts and now looks to reimagine e-commerce and the consumer checkout experience again with the launch of Paze^SM, a new digital wallet.

In a recent PaymentsJournal podcast, Early Warning’s VP of Product Management, Robin Love,  Ryan Riveland, VP of Market Development at Early Warning, Paze’s VP of Product, Matt Miller, and Daniel Keyes, Senior Analyst of Merchant Services at Javelin Strategy & Research, dig into how the company has helped shape the financial industry and the profound impact Paze will have on banks and credit unions.

Establishing trust between consumers and financial institutions is essential

As challenges in the financial realm evolve, banks and credit unions must balance risk management and customer support using advanced identity and payment risk tools.

“Early Warning offers a suite of services that are leveraged by thousands of institutions, agencies, and merchants across the country to help prevent not only synthetic identity fraud but mule detection, as well as the ability to determine if the applicant is likely to commit first-party fraud or default on the account,” Love said.

“From the best-practice perspective, I think they just need to have the right tools in their arsenal to ensure that they’re really identifying that this individual is who they say they are.”

Zelle® and Paze Have Their Distinctions

Zelle® and Paze are notably different products addressing entirely different sectors and use cases. Zelle® supports a use case that helps small businesses that exclusively used cash and checks for their daily operations. Zelle® was made available to eligible small businesses as a result of research conducted by Early Warning which revealed that 80% of small businesses surveyed did not accept cards as a form of payment.

“Zelle® is focused on digitizing check and cash, and that is not necessarily a Paze principle,” Riveland said. He added that Zelle® was never intended for the purchase of goods but rather for P2P transactions and small-business services.  Furthermore, Zelle® is embedded within the mobile banking apps of participants in the network to boost consumer engagement within the apps.

Paze, on the other hand, is an easy-to-use digital wallet that consumers can use for e-commerce purchases. Because Paze is offered by banks and credit unions, consumers can access their debit and credit cards from all participating financial institutions in the network. Miller explained that because the bank can already authenticate customers, there is no need for them to create another identity or download another app.

On the merchant side, Paze leverages the relationship already established via the bank to provide a more enhanced front-end experience, eliminating the friction typically seen in online checkout.

How Paze Aims to Change the Payments Industry

Paze is set to launch to all eligible consumers in 2024 and is anticipated to be a game-changer in the digital wallet space. Currently, Early Warning is partnering with large institutions that will help scale Paze much in the same way that Zelle® has been able to scale for more than 2,000 financial institutions.

Paze is launching in 2023 to a limited consumer population ahead of general availability. The rollout will primarily focus on consumers who are actively shopping online.

The goal is to also bring Paze to consumers and spotlight the security aspect, particularly as it’s supported by the many financial institutions those consumers know and count on.

“It’s about finding the opportunity to reduce that key component of friction, which is establishing a new relationship with the consumer either in the form of guest checkout or in the form of account creation,” Miller said.

Scaling Paze

Paze is set to fully launch this fall and is anticipated to be a game-changer in the digital wallet space. Currently, Early Warning is partnering with large institutions that will help scale Paze much in the same way that Zelle has been able to scale for more than 2,000 financial institutions.

The company is also working with a closed group of individuals to test and expand Paze for a full launch starting this fall and into the following year. The rollout will primarily focus on consumers who are actively shopping online.

The goal is to also bring Paze to consumers and spotlight the security aspect, particularly as it’s supported by the many financial institutions those consumers know and trust.

“It’s about finding the opportunity to reduce that key component of friction, which is establishing a new relationship with the consumer either in the form of guest checkout or in the form of account creation,” Miller said.

What’s Next

Paze is one of many solutions that is bringing banking, merchants, and consumers together, facilitating fast, efficient, and secure payments. With the help of its parent company, Early Warning, Paze leverages decades of experience, a suite of services, and extensive banking relationships. Those resources will be pivotal to its scale and expansion.

©2023 Early Warning Services, LLC. All Rights Reserved. Zelle and the Zelle marks used herein are trademarks of Early Warning Services, LLC

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Failed card-not-present transactions should never be considered business as usual. When a transaction fails, customer satisfaction, trust, and revenue plummet. If there‘s one thing that most customers want to avoid, it’s friction during the checkout process.

Merchants must not only ensure that customers experience a seamless checkout process but also need to navigate issuer preferences, network changes, growing payment options, and multiple routing options. Keeping up with these various challenges—which are becoming more frequent and costly—can be a struggle for many merchants. To address this growing concern, Worldpay unveiled a turnkey solution called Revenue Boost, which helps merchants optimize payments approvals while keeping costs down.

Taking a Proactive Approach

Most customer churn can be traced to a faulty payment process. Instead of accepting this event as the cost of doing business, merchants should consider a more proactive approach—a payment strategy that can secure a higher number of conversions, especially for first-time customers. Merchants have several opportunities throughout the customer shopping journey to make a lasting impact that customers will remember, and one of these critical moments happens during the checkout process. Once customers make the initial decision to buy, merchants need to ensure the payments process goes off without a hitch. A frictionless experience can increase the likelihood that consumers will return.  

“Increasing the lifetime value of the customer that you have can be done within an effective approach to payments to ensure that those who are coming through the funnel have the best possible chance to convert,” Jason Harding, Product Director of Optimization at Worldpay, said during a recent PaymentsJournal podcast.

In a robust payments scheme, merchants need to have access to the right data that would best benefit their organization. According to Harding, using network payment tokens can help merchants make sure they have the most up-to-date information on a customer. Network payment tokens can also reduce friction at checkout without compromising security. Account updaters are also useful, as they automatically update subscription customer card information.

A New Turnkey Solution

Worldpay is looking to help merchants process more card-not-present transactions by reducing the cost and risk of taking payments. Its Revenue Boost turnkey solution is powered by machine learning to maximize its performance.

A single strategy doesn’t work for everyone—particularly because merchants may have different goals, needs, and approaches to driving up e-commerce sales.

Personalized and tailored experiences are what many merchants have been leaning into lately, and Worldpay is as well. The company believes that its solution’s new features can help merchants tailor the payments experience to their needs and, in turn, help them create new opportunities to drive growth.

During a Revenue Boost pilot that Worldpay conducted between May 2022 and April 2023, based on a minimum of 500,000 transactions, one customer reported seeing a $6 million approval lift during a six-month period. Another customer saw a 4% acceptance increase during Black Friday.

And as Harding pointed out, the use of network payment tokens can be effective for merchants. Indeed, one merchant who participated in the pilot said it saved $1.2 million in payment costs over 12 months.

“By lowering costs and lifting approval rates, we can unlock the true value of payments for our customers,” said Gabriel de Montessus, Head of Global Enterprise at Worldpay. “We’ve already seen success for some of the world’s biggest brands, and we look forward to working with more to fuel their commerce globally.”

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Amazon Prime members who shop on Shopify can now elect to use Amazon’s Prime product delivery experience, including free delivery in Amazon trucks and a simple returns process, according to a news release on BusinessWire. The partnership between Amazon and Shopify comes as a bit of a surprise given how intensely they compete for business.

Although both companies are in the e-commerce space, Shopify and Amazon have very different business models. Shopify enables third-party merchants to offer and sell their products on its cloud-based e-commerce platform, whereas Amazon is a diversified business model that includes not only a merchant platform but also the selling of its own products and services.

Shopify merchants, particularly smaller businesses, now have an unprecedented opportunity to tap into Amazon’s vast customer base and logistics capabilities. The partnership will also leverage Amazon Pay within Shopify Payments, facilitating smoother transactions for Shopify merchants.

“This integration gives Amazon access to Shopify’s extensive merchant network, deepening Prime’s value to consumers while making it easier for many merchants to incorporate Buy with Prime into their operations,” said Daniel Keyes, Head of Merchant Services at Javelin Strategy & Research. “This move also comes after Shopify sold off its logistics unit early this year, and is likely part of Shopify’s reimagining its logistics strategy now that it is not handling all of fulfillment and its associated tasks itself.”

Many consumers have gotten used to the convenience of Amazon’s shipping system and returns but aren’t tied to actually buying products from the online giant. In effect, Amazon is acknowledging these customers by partnering with other e-commerce sites to offer its logistics services to smaller merchants.

Amazon’s offering of “logistics as a service” is part of a strategy of developing a product for in-house use, then licensing it to other companies. For example, PaymentsJournal reported on Amazon’s palm-reading payments technology, which it is putting in its Whole Foods locations and licensing to other companies, such as Panera Bread. Amazon’s move with Shopify is a similar move with its logistics network.

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American Express has teamed up with Skipify to streamline the checkout process for its customers.

Skipify allows Amex customers to link their eligible cards to participating merchants, eliminating the hassle of manual data entry. Through the partnership, Skipify is able to identify Amex customers via their email addresses, and automatically preloads their checkout with all of their information.

The partnership underscores a fundamental principle: reducing friction is vital to a company’s bottom line. When customers encounter a seamless and efficient checkout process, they are more likely to complete their purchase, leading to reduced cart abandonment rates and increased revenue for merchants. And at a time when consumers are expecting a frictionless experience, it’s even more paramount that retailers offer it.

“Card Linking is a great example of the innovation and customer value that can result from a startup like Skipify teaming up with Amex Ventures,” said Matt Sueoka, SVP and Global Head of Amex Ventures in a prepared statement. “We’re excited to continue working with Skipify to strengthen the relationship with our shared customers by making the digital shopping experience more convenient and secure.”

Frictionless Commerce

Cart abandonment is a growing frustration for retailers. And often a poor checkout experience can stop consumers in their tracks, resulting in a lost sale for retailers.

What retailers need to remember is, less is more—particularly when it comes to the future of e-commerce payments. Just look at how successful Amazon’s one-click checkout has been. Consumers continue to shop via the e-commerce giant’s site for its streamline checkout, because at the end of the day, consumers don’t want to go through various hoops to pay for a product. There are various ways to optimize the checkout experience and keep consumers coming back. At the end of the day, making the shopping experience as seamless as possible and forging a path to a frictionless checkout process is important.

The post American Express Partners with Skipify to Enhance Checkout Process appeared first on PaymentsJournal.

Consumers continue to shop, albeit more conservatively, in spite of cost-of-living increases. Worldline, in partnership with Retail X, released a report, “Expectations of Online Shoppers: Today, Tomorrow, and Beyond,” which dives into how consumer demand is evolving and how businesses can keep up.  

Key Findings  

The study surveyed 1,000 consumers in France, Belgium, Portugal, Spain, the UK, and the Netherlands. For the most part, the data found that customers are price sensitive, with 56% of respondents saying they were making fewer purchases. And when shopping, many said their main focus was on value. In Portugal, more than 50% of respondents noted using more coupons and discounts than before.  

Because value and price sensitivity is at the forefront of spending, shoppers have looked to cross-border commerce. According to Worldline, roughly half of respondents surveyed said they shop outside of their own markets, at least several times a year. This shopping behavior was seen mostly in Portugal and the Netherlands .  

Millennials were most likely to engage in international shopping compared to their older and younger co-horts. Nearly three-quarters (71%) of respondents in this demographic said they shop internationally several times a year, compared to 60% of Gen Z who agreed.  

Convenience was also top-of-mind for many consumers. Nearly a third of respondents said that mobile payments have made it easier to keep track of their spending.  

Online Shopping Trends In The U.S. 

In the U.S., convenience is also the driving force behind online shopping. According to separate data from Adtaxi’s Annual E-Commerce Survey, 79% of U.S. consumers cited convenience as the reason for shopping online. That’s because it offers them a lot of flexibility, including being able to compare prices, look at consumer reviews, and find coupons, which is not often easy to do when shopping in-store . 

Similar to Worldline’s findings, Adtaxi also revealed that many consumers rely on mobile for their online shopping needs. Some 78% of respondents said they used their mobile device when making online purchases.  

The post Merchants Need to Keep Up With Evolving Consumer Expectations appeared first on PaymentsJournal.

In a complaint filed on Wednesday, the U.S. Federal Trade Commission is alleging that Amazon has enrolled millions of consumers into its Prime service without their consent—and what’s more—has made it difficult to cancel the service.

“For years, Defendant Amazon, Inc. has knowingly duped millions of consumers into unknowingly enrolling in its Amazon Prime service. Specifically, Amazon used manipulative, coercive, or deceptive user-interface designs known as ‘dark patterns’ to trick consumers into enrolling in automatically-renewing Prime subscriptions,” the complaint noted.

According to the FTC, for years, Amazon has knowingly made the cancellation process complicated for Prime subscribers who were looking to end their membership. And after pressure from the FTC—who made the practices known—the e-commerce giant reworked the cancellation process for some subscribers not too long before the FTC filed the recent complaint.

“However, prior to that time, the primary purpose of the Prime cancellation process was not to enable subscribers to cancel, but rather thwart them. Fittingly, Amazon named the process ‘Iliad,’ which refers to Homer’s epic about the long arduous Trojan War. Amazon designed the Iliad cancellation process to be labyrinthine … and it’s leadership slowed or rejected user experience changes that would have made Iliad simpler for consumers because those changes adversely affected Amazon’s bottom line,” the complaint stated.

Prime Drives Amazon’s E-Commerce Efforts

Amazon Prime, which costs consumers either $139 annually or $14.99 monthly, makes up a significant portion of Amazon’s overall revenue. In fact, Prime subscription fees account for $25 billion of the e-commerce giant’s annual revenue.

Because of the many benefits of Prime—including free shipping—consumers are likely to spend more on Amazon compared to non-Prime subscribers. Because the main goal of Prime is to increase its subscriber base, Amazon has been working to convert non-Prime subscribers to Prime subscribers. Some of these upsell opportunities include various marketing efforts on the company’s site, such as big orange buttons that encourage consumers to subscribe to Prime or get a trial for Prime Video, with a “comparatively inconspicuous link to decline.”

And for consumers that have been trying to cancel Prime, the Iliad Flow requires them to navigate a “four-page, six-click, fifteen-option cancellation process.” Compared to Amazon’s one or two-click enrollment in Prime, the hoops consumers have to jump through to cancel the service are strenuous.  

The FTC also notes that Amazon is violating the Restore Online Shopper’s Confidence Act (ROSCA), which Congress passed in 2010, which states that “consumer confidence is essential to the growth of online commerce. To continue its development as a marketplace, the Internet must provide consumers with clear, accurate information and give sellers an opportunity to fairly compete with one another for consumers’ business.”

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TikTok plans to expand the size of its global e-commerce business this year to roughly $20 billion in merchandise sales. According to Bloomberg, who first reported the news, this is a sizeable endeavor from the $4.4 billion in gross merchandise value the company generated last year.  

TikTok’s Path to E-Commerce 

With consumer buying behavior evolving at such a rapid pace, TikTok has remained on the forefront of e-commerce shopping. The company has played a vital role in the consumers’ purchase journey, from finding new products to making their purchases, and creating content that powers post-purchase engagement. 

More consumers are purchasing goods from social media platforms such as TikTok thanks to influencers and their “shoppertainment” content. Social commerce is continuing to gain traction as it delivers instant gratification and purchase satisfaction to customers.  

Through its TikTok Shop, users can purchase items as they scroll through a feed of short videos and livestreams within the social media application. The hope is that it would become top-of-mind for shoppers as an alternative to e-commerce giant Amazon.  

We’ve covered how the BNPL space has leveraged the discovery feed feature on TikTok to create a similar, more personalized shopping experience for consumers.  

TikTok Threatened by Ban in the U.S. 

As TikTok amplifies its e-commerce efforts, the company is also facing scrutiny from U.S. government officials that claim the popular social media app is a security risk, with concerns that the Chinese government could have easy access to user devices and U.S. user data via the app.  

Late last year, the U.S. government approved the ban of TikTok on federal government devices. This May, Montana’s governor Greg Gianforte signed a bill, banning TikTok usage across the entire state.  

Despite the cold shoulder given to TikTok in the U.S., the Chinese-owned company is not backing down. In fact, it will continue to seek out profitable partnerships with U.S. brands and merchants to gain strategic advocates as it gears up for their defense in Washington courts.  

To address security concerns, TikTok’s website reveals that it has partnered with HackerOne to manage a vulnerability disclosure program and claim to have best-in-class infrastructure and processes. 

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