I’ve been confused on Fastlane? Was it branded? Nope. Is it tied to Braintree? A little..  So what is it and why are Adyen and FISV partners? Why would Adyen and FISV pay PayPal a 6-7bps revenue share for using Fastlane?

Now that deals are done, Fastlane is taking shape and its easier to comment on what it is and its potential in the market. 

Think of Fastlane as a revamped version of Chrome autofill that will work across devices and browsers. I have no doubt that Fastlane will be a deliver a great consumer experience. The unknowns surround merchant adoption and whether merchants will help PayPal build a new network, which they then have to pay for. 

The tech detail is here, and in this PayPal developer Video. Once you have registered for the service, your email and phone number are used to look up your info. If PayPal sees a new device, they can provide step up authentication.  As a Chrome autofill user, I log into my browser to make this happen. With Fastlane, it could work in any browser. 

All of this makes complete sense to improve the experience for Braintree merchants. So why would Adyen and FISV consider this implementation? Why would they PAY PayPal a revenue share of ~6bps? Guest checkout conversion is a problem with some merchants. While merchants like Amazon, Target and Walmart have less than 5% guest checkout, apparel and specialty retail have 50%+. The top solution in this space today is Google Chrome Autofill. PayPal is looking to take this model up a notch. 

Processors have related that PayPal is willing to operate Fastlane in 2 models

1. PayPal acquires merchant and checkout page with integration to Adyen/FISV (PayPal owns and controls the economics)
2. Adyen or FISV own the paper and manage the checkout page for merchant (PayPal receives revenue share). 

Challenges for Fastlane

1. PayPal or Partner must manage the hosted checkout page. Here Stripe and Shopify lead the pack. 
2. After a brief survey of top eCom CMOs, 
   1. Guest Checkout is an area for improvement, but Shopify, Stripe and Google are making tremendous progress. What is the lift vs these solutions? Will it only benefit non-Stripe/Shopify merchants?
   2. They had several concerns: dissemination of new customer data (ex ofwhat can happen), additional options, PayPal’s history of cost/performance, adding another consumer option, new switching costs, new alternatives (ex ApplePay, Paze, …etc).
   3. Customer awareness (no current users). Helping PayPal build a new brand and paying for it. 
   4. Highly skeptical of the BigCommerce results (80% conversion of guest).
   5. Wait and See is the likely approach.
   6. Impending card changes:  SRC/PAZE + rules changes (reduced costs, liability shift, universal enrollment, increased conversions)
   7. Platform based solutions (Android and iOS) for autofill with no additional costs
3. Competing with Google. I wouldn’t count on Google’s Chrome AutoFill standing still while PayPal works to build a better mouse trap. 
4. Within merchants, who makes the decision? Merchant CMOs, and PayPal has no relationship there. This is not a cost reduction, it impacts consumer experience and conversion rates, thus its not the payments team making the decision. As one CMO said “PayPal [Branded] no longer holds the edge in conversion and thus can’t justify their cost premium. Their team shows up every 6 months pitching the latest new idea. Before I help them build another product, their rates will need to come down to match card and they need to give me a revenue share for the consumers I enroll”. 
5. The benefits of the Fastlane “network” don’t arrive until there is repeated use and critical mass. Will they ever get there? Will prospective consumers see “Fastlane by PayPal” and think: I don’t use PayPal so no need to check that box?
6. Analytics and consumer surveys wlll be key to merchant adoption. Merchants won’t be adding anything now through January, so real numbers won’t be coming in till March.