In-Payments: New bi-weekly blog! Paze to be Fastlane? Click to Pay and the battle for checkout

The Race to Simplify Online Checkout is getting crowded: Click to Pay (Visa/MC/Amex/Discover), Link (Stripe), Fastlane (PayPal), and Paze (same bank consortium as Zelle).

In the world of digital commerce, where convenience is king, the checkout process remains a critical factor in driving conversions. Cart abandonment rates hover around 70%, with complicated checkout processes being a major culprit. Enter streamlined checkout solutions like Click to Pay, Link, Fastlane and, Paze—each vying to simplify how we pay online. But what sets these solutions apart, and which one is most likely to emerge as the dominant player?

If you’re a US consumer, you have likely already had one or many digital checkout experiences where a third party (i.e. not the site/merchant) is offering you to save your payments information for a quicker checkout. Though this is not a new concept, the competitive race has heated up over the last 6 months with new entrants, Fastlane and Paze, and recent renewed focus and GTM efforts from “incumbents”, Click to Pay (Visa and Mastercard) and Link (Stripe).

What these checkout solutions have in common

Before digging in on differentiators and which player is more likely to dominate, let’s look at what they all have in common.

A few key observations based on this;

The Contenders - how they work and differentiate

1. Click to Pay

​​Click to Pay was launched in the United States in October 2019 by the four major card networks: Visa, Mastercard, American Express, and Discover. It was originally called Secure Remote Commerce, but was renamed Click to Pay in July 2020.

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2. Link

Link is a checkout solution launched by Stripe in 2021. The service is available for all Stripe merchants and for the majority, they can just turn it on - i.e. it’s a configuration rather than an integration (no-code). Consumers can save credit cards, debit cards, or US bank accounts for faster checkout at any Link-enabled business. Link also supports Instant Bank Payments (US only). 

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3. Fastlane

Fastlane, developed by PayPal, is an AI-driven guest checkout experience first introduced in January, 2024, and then made generally available for all PayPal merchants in the US in August same year. Please see detailed descriptions of Fastlane in our PayPal initiation note, published in March, 2024, as well as in a follow-up note, published in August, 2024. These notes include; How it works - consumer and merchant experience.

4. Paze

Paze, a digital checkout solution from the consortium of banks behind Zelle, became available in September, 2024, and is looking to rival traditional wallets like PayPal and Apple Pay (see fig.9). It focuses a lot of its positioning on privacy, giving consumers the ability to keep their information within their own financial institution without having to share card details with merchants or other third-parties. Paze is not technically a digital wallet as it, just like Zelle, is offered/enabled via the participating banks’ app/website rather than via a unified Paze app/wallet. Paze refers to this model as a “bank wallet”.

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So, who will win?

  1. Merchant Adoption: The perception that Click to Pay would have a natural advantage here, given the global reach of Visa and Mastercard, has so far been proven incorrect. Both Fastlane and Link have key advantages through the low/no-effort to enable merchant acceptance. With that said, PayPal’s 40 million merchant base (plus already having closed distribution deals with major players like Adyen and Fiserv) should give Fastlane the upper hand.
  2. Consumer Adoption: Consumer payment preferences are largely driven by trust, convenience and incentives (in that order). We don’t see a clear winner on trust (probably a tie between Click to Pay and Paze). Link and Fastlane are neck-to-neck in convenience, but Fastlane being able to leverage PayPal consumer data could be the tie-breaker. When it comes to incentives, all four solutions have relied solely on convenience as the main incentive. However, we have recently seen examples of issuers providing incentives in the form of rewards for their cardholders to enable their cards for Click to Pay (which in turn is most likely driven by incentives provided by Visa/Mastercard to the issuers). This done at scale could change the game, but would also require the networks to do something similar to speed up merchant adoption.
  3. Features and Innovation: Stripe is the most tech-forward of the four contenders and Link’s approach to leveraging direct bank payments may attract demographics seeking alternatives to traditional card payments.
  4. Strategic and revenue impact: As of now, none of these solutions are generating direct revenue (i.e. there are no separate merchant fees), but rather different forms of indirect, incremental revenue through increased processing volume and/or consumer spend. They should all also benefit from lower fraud rates, i.e. lower cost. As previously mentioned though, of these four contenders, Fastlane most likely has the biggest opportunity to be directly monetized by exploring different upselling tactics into the PayPal branded ecosystem.