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Click to Pay: What it is, how it works

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Online shopping is already convenient. But the Click to Pay service introduced in late 2019 by Visa, American Express, Mastercard and Discover has made online shopping for everything from clothing and shoes to camping supplies and flowers even simpler.

Is Click to Pay a good option for you? Maybe. It all depends on how important speedier online transactions are to you and if you have the self-control necessary to avoid overspending when purchases are just a click away.

What is Click to Pay?

As its name suggests, Click to Pay allows you to purchase items from online retailers and service providers by clicking just one button. You can then choose from a list of credit and debit cards that you’ve already saved through Click to Pay to complete the purchase.

The goal here is speed: You won’t have to manually type in your credit card information with every purchase. You’ll only have to select the Click to Pay button and choose the pre-saved card you want to use. Click to Pay then provides the online merchant with the information it needs to close the sale.

Security is high, too. Your credit card information is never shared with merchants and never leaves the Click to Pay system. This is a secure way to pay, and makes it more difficult for scammers to steal your credit card information.

How does Click to Pay differ from Visa Checkout, American Express Checkout and Masterpass?

Click to Pay is similar to the online shopping buttons you might be used to from companies like Visa and American Express. The big difference? Click to Pay replaces these individual options with one standardized system.

Now that Click to Pay is available, Visa Checkout, American Express Checkout and Masterpass—the one-click shopping options offered previously by credit card networks—are gone. If you want to buy items online with one click, you must use Click to Pay.

Fortunately, if you’ve used Masterpass, Visa Checkout or American Express Checkout, then you’re already familiar with how Click to Pay works. And if you haven’t? Click to Pay is an intuitive system. It’s designed to be easy to use.

How does Click to Pay work?

To use Click to Pay, you’ll first have to sign up for the service and add your credit cards to your account. To do this, log onto Click to Pay from any of the major card networks: Visa, Mastercard, Discover and American Express.

Once you log into one of these sites, you’ll be asked to enter the information from any cards you want to enroll in Click to Pay. Then, if you see the Click to Pay logo on any retailer’s website—usually followed by the Discover, American Express, Visa and Mastercard logos—you simply click on that button.

Once you do, you’ll receive a six-digit security code on your phone or other device. You then enter that security code to access Click to Pay. The final step? You choose whichever of the linked credit cards you’d like to use to complete your purchase.

That’s right: You won’t have to memorize a password to use your cards with Click to Pay. You’ll instead rely on the unique security code that Click to Pay sends over.

Andrew Hopkins, senior vice president of global products at Discover, said that services such as Click to Pay will only get more important as consumers spend even more time shopping online.

Ecommerce was already booming before the COVID-19 pandemic shut down retailers last year and persuaded many nervous consumers to switch from in-person shopping to online purchases. The one-click option is just the latest example of card providers tweaking the online shopping experience, Hopkins said.

“Whenever we can remove friction in the checkout process, it’s a win for customers and merchants,” Hopkins said.

Benefits of Click to Pay

Simplicity and speed are the two main benefits of Click to Pay, according to Judy Nguyen, vice president of network product development with American Express.

As Nguyen says, customers using Click to Pay no longer must repeatedly enter their card, shipping and billing information when making purchases through websites apps.

Nguyen points to an American Express survey of U.S. consumers in 2019: 85% of respondents said they had recently left items in their online shopping carts and not completed transactions once they got to a site’s checkout page. The biggest reasons for this? Nguyen said that consumers worried that because they had to enter so much additional information on the retailer’s site that their payments would not be secure. Others said that the checkout process was too long.

“Click to Pay helps to address all these pain points,” Nguyen said.

Another positive? Click to Pay means that merchants and service providers no longer need to store sensitive card information, Nguyen said. That reduces the technology burden for merchants while also providing a safer checkout process for consumers, she said.

American Express surveyed U.S. merchants last summer and found that 70% of merchants who accept online payments agree that their online checkout experience needs to be simplified for consumers. The survey also found that 69% of merchants who accept online payments say they would prefer not to have to store customer credit cards on file. Not having to do this would reduce their costs and ease their security concerns, they said.

“Increased ecommerce during the COVID-19 pandemic has certainly also demonstrated that there’s a need for a better online checkout experience, for everyone involved,” Nguyen said.

Is Click to Pay a safe way to shop online?

Click to Pay transactions are secure, largely thanks to tokenization. When you buy something with the Click to Pay feature, your credit card information is turned into an encrypted, virtual card number that is unique to that specific transaction. It’s much easier for a criminal to steal your credit card number when you enter it into a website than it is for the same scammer to crack your personal financial information when it’s been tokenized.

When you make a purchase through Click to Pay, then, merchants never receive your credit card number. That adds a layer of protection.

Click to Pay also uses two-factor authentication to boost security. When you click on the Click to Pay logo, you’ll be sent a verification code. You won’t be able to close your transaction without entering that code on the Click to Pay screen.

While Click to Pay might be secure, that doesn’t mean it can’t cause financial harm to consumers, said Jamie Larounis, a Washington, D.C.-based travel industry analyst for the Upgraded Points website. That’s because Click to Pay makes it so much easier to buy products online.

“You can make a purchase in a matter of seconds,” Larounis said. “The psychological hurdle of entering your credit card information and your billing information slows you down when making an online purchase. But with Click to Pay, those hurdles are gone. It can be too easy for some people to overspend. Click to Pay is great for people who manage their money well. It’s not great for shop-’till-you-drop people.”

Colton Castleman, retirement counselor at Assurance & Guarantee in Burlington, North Carolina, agreed that the one-click ability to spend might be too much of a risk for those buyers prone to overspending.

“One-click purchases make it easier to overspend due to impulse buying, thus people lose track of how much has been spent in a short amount of time,” Castleman said.

Bottom Line

Though acceptance is still relatively new, you can expect more merchants to offer the Click to Pay option on their websites. The number changes on a regular basis, but Mastercard said in June of last year that more than 10,000 merchants had enabled Click to Pay on their sites. This included such retailers as Expedia, Saks Fifth Avenue, Crate & Barrel and many others.

Click to Pay, then, makes it easier for consumers to buy at an increasingly large number of online retailers. This is good for convenience and, considering how safe transactions through the service are, for security. But be careful: Spending with the Click to Pay button is easy. Don’t let that simplicity lull you into overspending and running up too much debt on your credit card.

Written by
Dan Rafter
Personal Finance Expert Contributor
Dan Rafter has been writing about personal finance for more than two decades, covering everything from credit scores, mortgage loans and debt to credit cards, insurance, real estate and student loans. His work has appeared in the Washington Post, Chicago Tribune, Fox Business, The Motley Fool, The Christian Science Monitor, LendingTree, Business Insider and Mental Floss Magazine. He's also the editor of Midwest Real Estate News, a trade magazine serving real estate professionals throughout the Midwest.