Last Updated On September 24, 2020 / Written By Chloe Henderson

Complete Guide to Mobile Commerce- Trends, Strategies & More

By providing a mobile commerce platform, businesses can expand their reach to potential buyers and create personalized customer experiences for their client base.

While online shopping remains popular among consumers, businesses are constantly innovating their technology to find new ways to provide the best customer experience. The latest trend that many companies have found success in is mobile commerce.

According to a Pew Research Center study, 96% of Americans own a personal cellphone. This creates an opportunity for businesses to develop a direct link to consumers, regardless of whether they have an online or physical store.

Mobile commerce allows buyers to purchase goods and services from their mobile devices from anywhere, at any time. This retail approach enables companies to bring a constant stream of new content and products directly to mobile users.

However, there are several different types of mobile commerce, each with its own advantages and disadvantages. Therefore, businesses must be sure to consider all implications before delving into a mobile commerce project.

What is Mobile Commerce?

Mobile commerce (mCommerce) refers to the browsing, purchasing, and selling of products and services through mobile devices, such as smartphones and tablets. mCommerce includes individual retailers and digital marketplace apps, including Amazon. It also involves digital wallets, such as Apple Pay, and mobile banking apps, which help facilitate spending.

This retail approach allows consumers to purchase online goods from anywhere at any time, without needing access to a desktop computer. A study by the Pew Research center found that 8 out of 10 Americans shop on their mobile devices. This means businesses that only utilize eCommerce and physical platforms are missing out on potential sales.

mCommerce is not only convenient for shoppers on the go but enables businesses to sell online and deliver content to consumers faster as well. By increasing their exposure, retailers can boost impulse buys and overall sales. In 2017 alone, mCommerce accounted for nearly 35% of all e-commerce sales, and emerging trends indicate there is no slowing down. In fact, mCommerce is projected to outgrow non-mobile retail methods by 2021.

Types of Mobile Commerce

While there are many different types of mobile apps that mCommerce encompasses, the three main categories include-

  • Mobile Shopping
This is similar to e-commerce shopping, except customers are able to purchase products via their mobile devices. Retailers can provide mobile shopping by developing a mobile app, optimizing their website for mobile viewing, or establishing a marketplace on social media.

  • Mobile Banking
This technique allows users to check their personal accounts through their bank's private mobile apps. The logins are typically created on the establishment's website and linked with the client's online banking account. However, some mobile bank apps have limited viewing or added restrictions due to the sensitive information.

  • Mobile Payments
This includes any purchases, money transfers, or transactions completed by a mobile device rather than a physical card or cash.

6 Mobile Payment Options

Outside of traditional payment processing, companies need to weigh mobile payment options to determine which best suits their e-commerce customers. Some brands have found that carefully choosing the correct payment solution can significantly impact sales.

Power Support disclosed that they experienced a 26% increase in orders within two weeks after implementing Amazon Pay. Therefore, management should understand what each type of mobile payment entails before selecting a solution.

1. Digital Wallets

Digital, or mobile, wallets allow consumers to store their credit and debit card numbers and shipping addresses on their devices to streamline transactions. This eliminates the need to re-enter the information for every online purchase, which can be tricky when using a mobile phone.

While there are several mobile wallets available on the market, some are restricted to certain locations, and only a few are accepted by eCommerce sites. The most well-known and trusted digital wallets include-

  • Amazon Pay
  • Apple Pay
  • Google Pay
  • PayPal
  • Samsung Pay

2. Contactless Payments

Contactless payments use the information provided by digital wallets to orchestrate in-store purchases. By simply touching their mobile device to the payment terminal, customers can complete their transactions.
The mobile wallets that support contactless payments include Apple, Google, and Samsung Pay. However, some banks, such as Chase, have launched their own digital wallets for their clients.

3. Closed-Loop Mobile Payments


Closed-loop mobile payments operate just like mobile wallets, except they are connected directly to a single company. This means customers can only make purchases at the respective business.
Organizations that have utilized closed-loop mobile payments include-

  • Walmart
  • Starbucks
  • Taco Bell
  • Target

By storing billing and personal information in the business's mobile app, consumers can make mobile and in-store purchases instantly.

4. Money Transfers

Prior to transfer apps, mobile money transfers were limited to banking apps, which would only let clients move money between their personal accounts. Now consumers can request and send money to anyone, regardless of their bank, by using top mobile transfer apps, such as-

  • Venmo
  • Zelle
  • Apple Pay
  • SnapChat
  • Cash App
After setting up an account, users enter their banking information and can immediately begin transferring money. Once a transfer is initiated, the recipient can accept or deny it, executing the final transaction. When the transaction is complete, users can see their balance on the app and can transfer the money to their checking account or credit it to their mobile account.

Some apps require an additional fee to expedite the transfer to the bank account, while others have no charge but may take a few days for the funds to become available.

5. Mobile Point-of-Sale


Mobile point-of-sale (mPOS) systems are an alternative option for traditional POS solutions with card readers.

While some mPOS providers offer portable card readers that plug into the mobile monitors, merchants can complete a transaction from any location by typing in the customer's information. This is great for vendors, sales associates, and businesses that regularly move locations.

6. Carrier Payments


Carrier payments are the earliest form of mobile payments, in which a cellphone user can make a purchase and the cost is added to the following bill, rather than being collected immediately. While this method is not used as much anymore, it was once popular for purchasing ringtones and making donations.

Advantages and Disadvantages of mCommerce

As with any business venture, mCommerce has several pros and cons that companies should consider before delving into the mobile retail market. The most significant benefits that mCommerce offers are-

  • Faster Transactions
mCommerce eliminates the need to pull data from a server, allowing consumers to quickly browse and purchase products. When it is coupled with digital wallets, transactions are even faster, as customers can save the time it takes to input payment information.

  • Enhanced Customer Experience
Mobile shopping has elements that consumers cannot find in traditional retail stores. mCommerce offers convenience, fast shopping, and exclusivity to create an enhanced user experience.

  • Better Customer Connectivity
A traditional eCommerce website can only alert customers of promotions through email marketing, which are often overlooked or deleted. mCommerce, on the other hand, can send buyers push notifications directly to their phones while they are shopping.

  • Customized Content
As consumers spend a lot of time on their phones, mCommerce retailers can gather more customer data to create the most engaging content. It also allows marketers to send customized push notifications based on the buyer's purchase histories and interests.

  • Detailed Analytics
By collecting information on customers' age, location, purchase histories, likes, and disinterests, businesses can build accurate buyer personas. This enables retailers to push popular, high-profit products towards specific demographics to boost sales and revenue.

  • Scalability
Mobile commerce allows retailers to scale their business by expanding their customer reach, increasing inventory turnover, and optimizing their shopping experience.

The data and insights gathered by mCommerce alone give marketing the ability to drive sales and interest in a specific product whenever trends show declining engagement.

However, mCommerce also presents a unique set of challenges-

  • Technology Optimization
Just like any business technology, mCommerce is continuously changing to find the best customer approach.

This requires businesses to evolve with updates, design changes, hardware innovations, and best practices in order to optimize their technology. Otherwise, retailers can fall behind modern competitors and fail to bring customers the newest shopping experience.

  • Privacy Issues
While the open spread of data is excellent for collecting insights, it also creates privacy concerns for consumers. Businesses that use mCommerce have the responsibility of protecting their customer's data to provide safe shopping and secure transactions.

Otherwise, buyers can experience credit card and identity theft, causing them to lose all trust in a business. Therefore, retailers need to ensure their payment processors and software are PCI compliant. Management should also actively monitor fraudulent and suspicious activity to prevent leaked information.

  • Competition Comparison
While mobile retailing gives businesses the opportunity to reach consumers they would have otherwise overlooked, it also gives shoppers the ability to comparison shop. Therefore, companies need to keep up with surrounding retailers to provide competitive pricing, products, and services.

  • Traditional Retailers
Many brick-and-mortar retailers fear that if they delve into the mCommerce space, they may neglect business at their traditional stores. It is essential that companies look at mobile shopping as an extension of their original business and not as a replacement.

By creating a uniform customer experience between all sales channels, retailers can promote the brand itself rather than a specific platform over another.

How to Design an Engaging Mobile Experience

There are several ways a business can offer their customers a mCommerce channel. However, in order to provide an engaging mobile experience, companies should consider-

  • Creating a Mobile App
Organizations need to realize that they are opening up a full-time relationship with their customers when they launch an app. This means they can browse, search, and purchase products from anywhere, at any time.

While this essentially eliminates the risk of missing out on sales, it also requires companies to have a robust production and order fulfillment system that can manage high order volumes.

App development requires a seamless transition between the in-store and e-commerce sales, so customers aren't confused when it comes to completing the transaction. Therefore, developers should reference the online store when installing the design, payment processing, and login features to standardize the shopping processes.

  • Integrating Mobile Payments
Retailers should consider integrating their mobile payment processes with their in-store POS systems to streamline transactions across all platforms.

With their payment information already logged into the app, customers can reduce the wait time at checkout. Integrated payments allow buyers to perform their own transactions, allowing employees to focus on the needs of other shoppers.

  • Reducing Load Time
A major source of frustration within mobile shopping is long loading times. Many customers will abandon their shopping carts if their app is buffering, glitching, or taking too long to process payments.

Even if the buyer does complete their transaction, they leave with a bad customer experience that may deter them from returning. Therefore, businesses must ensure that their app has a robust infrastructure that can handle high volumes of simultaneous shoppers and transactions.


Currently, there is no end in sight for mCommerce technology. Social media platforms, such as Instagram, are constantly updating their apps to expand their marketplace to potential buyers, enabling a company to boost their conversion rate.

From personalized advertisements to push notifications, business owners can directly connect to consumers no matter their location. This enhanced connectivity and convenient shopping method only increase brand exposure, client base, and potential sales.