Buying and selling products and services through mobile devices

are the new trend. A housewife can purchase her kitchen

appliances from the comfort of her living room, a busy person can
order lunch from office, one can use mobile platforms to sell
goods and services − all with a few clicks.
What is M-Commerce?
Mobile commerce or simply M-Commerce means engaging users
in a buy or sell process via a mobi le device. For instance, when
someone buys an Android app or an iPhone app, that person is
engaged in m-commerce. There are a number of content assets
that can be bought and sold via a mobile device such as games,
applications, ringtones, subscriptions etc.

How does M-Commerce Work?

Let’s look at some of the points that you need to remember as a
business, while engaging in m-commerce −
Decide Where to Sell
Before you sell your products or services via m-commerce, you
need to decide what type of outlets or stores suit your business
best. Let us suppose you have created ringtones − you can sell
them either at specific third-party outlets or to independent
aggregators who charge you a commission fo r the service.
You can also sell your ringtones on mobile stores or app stores
such as Android marketplace or App store (Apple). These stores
are frequently visited by many buyers and hence ideal for making
sales easily and efficiently. Finally, you can also sell via your own
mobile store by creating a mobile website specifically for sales or
as by setting-up an m-commerce page on your main website.
The rise of the internet and wireless technology has transformed traditional
commerce into eCommerce, with mobile commerce technology advancing rapidly.
This shift has made mobile devices essential for businesses to reach consumers.
Today, people can interact with businesses anytime and anywhere using their
smartphones, creating abundant marketing opportunities and new sales channels
through digital marketing.

eCommerce is increasingly favoring mobile applications over traditional websites and

computer platforms, fueled by consumer preference and the emerging trend of super
apps and all-in-one applications. These feature-rich, visually appealing shopping
apps are gaining momentum. Understanding mobile commerce and its significant
growth can be a valuable asset for businesses, including local ones, to tap into this
lucrative market.

What Is Mobile Commerce?

Mobile commerce, also known as mCommerce for short, refers to the buying and
selling of goods and services among buyers and sellers via wireless devices, such
as tablets or mobiles. Thus, online shopping via a desktop computer will not be
counted as mobile commerce.

Let us take digital wallet apps as a typical example.

Do you use electronic payment applications, such as Apple Pay, Samsung Pay, or
Android Pay? They are created by app developers so that users can make money
payments through a direct connection to their bank account. To ensure safety and
security, often, they will have two-factor authentication enabled. That is, in addition to
the password of the application account, the user also needs to authenticate the
account via his phone number.

Thus, you do not need to log in to the website on your computer to make payment
transactions like before. Not limited to in-app purchasing, and mobile banking apps,
now mobile commerce technology also allows you to locate, shop, buy tickets, book
hotel rooms, meals, and more.

Differences between mCommerce and eCommerce

Mobile commerce is a part and a new evolution of eCommerce. Of the total
eCommerce sales of 2017, 34.5% were mobile commerce sales, and now, it has
grown to more than half, or 54%.

However…

It is not simply part of eCommerce and there are some huge differences between
them.

Mobile commerce technology can do a number of things more than we would expect
from eCommerce, facilitating a number of new and existing industries and services,
such as mobile money transfers, digital content purchases, and delivery, contactless
payments, location-based services, etc.

Mobility
A fundamental difference lies in their mobility. eCommerce, often conducted through
desktop computers, confines users to a fixed location. This restricts mobility, as
desktops are not easily portable. mCommerce, in contrast, is enabled through
handheld devices like smartphones and tablets, offering the flexibility to conduct
transactions anywhere with an internet connection, be it on public transport, in cafes,
or during a gym session.

Location Tracking
eCommerce platforms typically track user location via IP addresses, which only
provide a general region. This limitation impacts the precision of targeted advertising.
mCommerce, however, utilizes advanced technologies like Wi-Fi and GPS for
location tracking, enabling highly personalized content and recommendations. For
example, mCommerce apps can send custom discounts to users as they pass by a
particular store, enhancing the shopping experience.

Security
The security measures in eCommerce and mCommerce also differ significantly.
Traditional eCommerce often relies on credit card payments, which, despite
multifactor authentication, remain susceptible to data breaches and identity theft.
mCommerce addresses some of these security concerns with features like biometric
authentication, mobile wallets, QR codes, and even the use of cryptocurrencies,
offering a more secure transaction environment.

Reachability and Convenience

mCommerce has an edge in reaching and engaging the target audience. Mobile
apps facilitate easier and quicker shopping experiences, making it more convenient
for users to browse and purchase on the go.

These are just a few of the primary distinctions between mCommerce and
eCommerce. Additionally, there are other noticeable differences, such as:

 User Experience: mCommerce apps are typically designed for smaller

screens and touch-based interactions, necessitating a user-friendly and
responsive design. eCommerce websites, on the other hand, are optimized
for larger screens and mouse-based navigation.
 Payment Methods: mCommerce often incorporates mobile-specific payment
solutions like Apple Pay or Google Wallet, which are not commonly used in
traditional eCommerce.
 Marketing Strategies: Marketing tactics in mCommerce often leverage push
notifications and SMS, capitalizing on the immediate and personal nature of
mobile devices. eCommerce strategies might focus more on email marketing
and online advertisements.
 Internet Connectivity: While eCommerce relies on stable internet
connections, mCommerce can sometimes leverage offline capabilities,
allowing users to browse products or services without an active internet
connection and complete transactions once they are back online.
 Social Integration: mCommerce apps tend to have stronger integration with
social media platforms, encouraging social shopping experiences and easy
sharing of products or deals.

Types of Mobile Commerce

Mobile Commerce has revolutionized the way we engage in commercial
transactions, offering convenience and speed in various forms. It is primarily
categorized into three essential types:

Mobile Shopping
These are optimized eCommerce platforms that allow users to conveniently shop on
mobile devices without having to zoom in. In addition, shopping applications and
social media platforms, such as Facebook, Twitter, Pinterest, and Instagram, also
use mobile commerce technology for the same purpose.

A notable subtype of mobile shopping is application commerce, which involves

transactions conducted within a native mobile app. For eCommerce businesses, it’s
crucial to integrate secure payment gateways in these apps, reassuring customers
about the safety of their transactions and payments.

Mobile Banking
Tailored for portable devices, mobile banking is essentially internet banking on the
go. It enables customers to access their bank accounts and brokerage services,
carry out financial transactions, make payments, and trade stocks, primarily through
a bank’s secure, specialized app.
Modern mobile banking apps often incorporate SMS, chatbots, and other
conversational interfaces for added functionality. These interfaces can send
notifications and allow users to monitor account activity. For instance, banking
services integrated into messaging platforms like WhatsApp enable customers to
check balances, transfer payments, manage loans, and more in real-time.

Mobile Payment
This type replaces traditional payment methods like cash, cheques, and credit/debit
cards with mobile device-based transactions. Mobile payments allow consumers to
make in-person purchases using their mobile devices.

Digital wallets, such as Apple Pay, facilitate transactions without the need for a card
reader or carrying physical cash. QR codes are also commonly used, enabling
shoppers to scan and pay for items directly through their mobile devices.
Additionally, mobile payment systems allow users to send money directly to
someone’s phone number or bank account, further simplifying the process of
transferring funds.

Mobile Commerce Development: from

Searching to Shopping
Mobile commerce development is associated with the application of the Internet
through mobile devices. In 1997, Coca-Cola allowed buyers to pay via SMS at two
vending machines in Finland, and it laid the foundation for later applications by other
brands.

2007 was the breakthrough of mobile commerce technology when Apple released
the first smartphone that did not use the SMS system. Digital payment applications
have also developed gradually with many popular names, such as Amazon Pay,
Paypal, Apple Pay, Google Pay, Samsung Pay, etc. By 2010, a significant
percentage of internet users started using mobile devices for online searches, with a
growing trend in online purchases through mobile platforms.

Currently, not only businesses but also banks are increasingly investing in mobile
commerce technology to improve their mobile apps. It is estimated that by 2023, the
revenue of the mobile payment market will reach $4.574 billion. The integration of
advanced technologies such as AI, AR, and VR into mobile devices further
enhanced the shopping experience. Retailers started offering personalized shopping
experiences, augmented reality-based try-ons, and more.

The journey of mobile commerce from basic searching capabilities to the

sophisticated shopping platforms of today highlights the rapid evolution of technology
and consumer habits. As we look to the future trends, mCommerce is set to become
even more integrated into our daily lives, driven by technological innovations and a
deeper understanding of consumer needs. This progression not only represents a
technological triumph but also reflects the dynamic nature of the global marketplace.

4 Main Mobile Commerce Technologies

Mobile commerce leverages a range of technologies to facilitate commercial
transactions via mobile devices. These technologies are integral to the seamless
operation and widespread adoption of mCommerce. Here are 4 main technologies
used in mobile commerce:

SMS
SMS, or text messaging, is familiar to everyone. It is the oldest mobile commerce
technology, supporting two-way interactive messaging. It is so easy to use that
anyone can access it no matter what type of mobile device they are using.

Text messages are capable of transmitting push notifications, which are one-way
alerts that can include news, special offers, and other information from content
providers to subscribers. This feature has made SMS a valuable tool for businesses
to disseminate timely information and promotions to a broad audience.

Beyond simple text, SMS can also carry binary data. This capability enables it to act
as a delivery mechanism for various downloads, such as ringtones, operator logos,
and even encrypted messages. This versatility has expanded the scope of SMS
beyond mere communication to include various facets of digital content distribution.

A significant feature of SMS in the realm of mobile commerce is its support for two-
way interactive messaging. For example, bank customers can easily check their
account balances by sending a specific command, like BAL, to a designated phone
number or shortcode. This interaction represents a convenient and immediate way
for consumers to engage with services and access information.
The ubiquity and ease of use of SMS are its main advantages. It’s a universal
service, available on virtually all mobile devices and networks, making it accessible
to a vast user base irrespective of their specific device or carrier.

However, SMS is not without drawbacks. A notable limitation is the lack of encryption
in standard SMS communication, raising concerns about data security. Additionally,
SMS services cannot use Personal Identification Numbers (PINs) for authentication
in a secure manner. This is because copies of SMS messages, including potentially
sensitive ones, are stored in the unsecured Sent folder of a device.

As a result, services requiring secure authentication often need to resort to out-of-

band methods, such as requesting the PIN through a separate medium like an
Interactive Voice Response (IVR) call.

While Multimedia Messaging Service (MMS), or picture messaging, exists alongside

SMS, it is generally not utilized extensively in mobile commerce services. This is
partly due to MMS being costlier than SMS and the challenges in controlling how
MMS content is displayed across different devices. There are niche uses, such as
MMS for barcode delivery, but these remain limited in scope.

USSD
Unstructured Supplementary Service Data (USSD) is an early mobile commerce
technology, nearly as old as SMS. It’s available for external services in select
markets, including parts of Africa, Central America, Europe, India, and Southeast
Asia, where it enjoys considerable popularity.

USSD differs from SMS in that it establishes a real-time connection, enabling

session-based communications. This feature makes it akin to the mobile equivalent
of Interactive Voice Response (IVR) systems used in customer service but without
the voice component.

Like SMS, USSD can transmit push notifications, respond to user queries (like
checking the balance of a prepaid mobile account), and facilitate account top-ups.

One of USSD’s key advantages is its wide accessibility, as it can be used on almost
any mobile phone and is relatively straightforward to operate. Moreover, it enhances
security by allowing the integration of password or mobile PIN protection, a
significant feature since messages sent via USSD are not stored on the device.

However, USSD has its limitations. One major challenge is the difficulty in
implementing service charges, as carriers typically don’t have a built-in billing
mechanism for USSD. Additionally, USSD services may not function reliably when
roaming, and the phone needs to be powered on to receive messages.

Unlike SMS, USSD doesn’t have the capability to resend messages if the phone is
off, out of range, or in an area with no service, such as an elevator. This limitation
makes USSD unsuitable for critical services like fraud alerts.
While USSD can provide maximum reach in markets where it’s available, its
deployment depends on carrier support for external services, which restricts its
overall availability. Despite these drawbacks, in regions where it’s supported, USSD
remains a valuable tool in the mobile commerce toolkit, particularly for basic
transactional and informational services.

WAP/Mobile Web
The first mobile commerce technology, WAP (Wireless Application Protocol), played
a crucial role in the early stages of mobile web access. WAP 2.0, which became
widely available on feature phones around 2004, marked a significant advancement
in mobile web technology. It utilized XHTML, a variation of HTML, to deliver a mobile
web experience.

With the advent of smartphones, particularly following the launch of the iPhone, most
of these devices supported browsers capable of handling HTML, broadening the
scope and capabilities of mobile internet access.

WAP 2.0 offered an experience much closer to what users were familiar with on
desktops and laptops, although it was not identical. The mobile web experience via
WAP differed in various aspects from the traditional web experience due to the
limitations and design of mobile devices.

Despite these differences, the user experience on WAP could closely resemble that
of basic mobile apps. However, a key limitation was that WAP did not provide access
to the full range of features available on a mobile phone, unlike dedicated
applications.

Nonetheless, WAP served as a vital backup option for accessing web content on
mobile devices, especially for users who did not own smartphones.

STK
STK stands for SIM Toolkit, which is used by appearing in the menus of mobile
devices as a permanent application through being stored on the Subscriber Identity
Module (SIM) card. This mobile commerce technology uses the SIM to receive
requests from the application and then sends the information to give commands to
the mobile device.
One of the key advantages of STK is its robust security. By offering identity
verification and encryption, STK applications provide a level of security comparable
to having a dedicated terminal.

This aspect makes it particularly suitable for financial or mobile commerce

operations, especially in settings where customers frequently interact with networks
of cash-in/cash-out agents. A notable example of this application is the M-Pesa
system in Kenya, as well as in other peer-to-peer marketplaces where subscribers
trade commodities like airtime.

However, STK technology does come with its challenges. One significant hurdle is
the requirement for carriers to issue new SIM cards to accommodate these
applications. Due to this limitation, STK is generally more effective in environments
with limited distribution, where the logistical and infrastructural demands of issuing
new SIM cards can be feasibly managed.

Despite these challenges, STK played a crucial role in the early stages of mobile
commerce, particularly in regions with a high prevalence of feature phones.

Mobile Commerce Technology’s Advantages

Mobile Commerce Technology offers a range of advantages that have significantly
transformed the retail and service industries, enhancing both consumer experience
and business operations. These advantages include:

Increase Customer Retention

Similar to the purpose of eCommerce in general, mobile commerce technology was
born to serve customers and provide them with a better overall experience, thereby
increasing customer retention for businesses. Even, customers now no longer need
a desktop computer. It is not only convenient but also diverse in product types and
competitive in price.

Have good potential for revenue growth

The percentage of mobile commerce in eCommerce sales is increasing day by day
and shows no sign of stopping. Retailers are investing more in mobile commerce
technology. Obviously, it’s a gold mine that needs to be explored, so why are you still
hesitating?

Provide a multi-channel experience

Mobile commerce technology allows businesses to advertise and sell products
through multi-channel more easily than any other form. It is great for you to
implement strategies to put your product on the website and attract customers to visit
it wherever they spend their time.

Diversify payment options

The variety of payment options is also an advantage as it can help the customer’s
purchase process go faster. Specifically, about these options, we will explain these
more clearly below.

Can be expanded
With mobile commerce technology, all parts of your business can be expanded to
suit the growth of each stage of the company. It is also partly thanks to the support of
platform providers as a competitive factor to attract businesses looking to invest in
this area.

Below the opportunities that mobile commerce technology brings, we should not
ignore some of the following mobile commerce threats:

 Optimization’s threat: If you don’t pay attention to changes in technology,

practices, design, etc., you will not be able to take advantage of mobile
commerce to increase sales but, on the contrary, will fall behind your
competitors.
 Competitors’ threat: While you can easily reach customers and competitors
to exploit their information through mobile commerce, this also means they
can do the same with you.
 Core value threat: When you focus all your resources on developing mobile
commerce technology, it may affect your core business activities, such as the
traditional in-store shopping experience.

Mobile Commerce Features

From high-performing mobile apps, we’ve researched and compiled some must-have
features. You can refer to and apply these mobile commerce features for your
application to be more successful.

 Push notifications: Make sure it’s useful and relevant to your customer’s
interests, i.e., promotions, new developments, order statuses, etc.
 Location tracking: This feature will make your push notification content more
useful and can improve your mobile commerce marketing strategy.
 User profiles: It not only provides benefits to you but also to your customers.
Based on it, you can personalize the customer experience, increase sales,
and boost customers’ loyalty as well.
 Social media integration: Social media is a huge source of potential
customers. Therefore, you should not ignore the integration of popular
platforms like Facebook or Instagram into your app.
 Customer loyalty program: This is an effective way for you to take care of
your longtime customers. They tend to benefit the business more than new
ones by spending more money on each order and are also willing to introduce
your brand to those around them.
 Lots of mobile commerce payment methods: As we said, limited payment
options can lead to payment delays for some customers for a period of time
and even forever.
 Speedy checkout process: The payment process taking place in just a few
seconds on mobile devices will bring a surprisingly high conversion rate.
 App analytics: Customers are always changing. As a result, your app will
also need to be continuously improved through app analytics to keep up with
them and meet their needs.

Mobile Commerce Payment Methods

Mobile Wallets
You’ve probably heard of this concept before. It is a digital version of a regular wallet
that anyone uses to store cash and coins. It will be connected to your bank account
for you to top up or use in a way that doesn’t require money in your bank account, for
example, using cash or a phone card to exchange money in your wallet. When you
pay for something, it will deduct money from your mobile wallet. As such, it
minimizes the need to use cash or swipe cards for users, so it is very convenient.

Popular mobile wallets are PayPal, Amazon Pay, Apple Pay, Google Pay, and
Samsung Pay.

Mobile Transfer
Most banks have developed an application specifically for their members to make it
more convenient to transfer money without going to physical transaction points and
even to use a desktop computer. What they need is an internet-connected
smartphone. In addition to banks, some other payment gateways, such as Paypal or
Google, have also soon applied this mobile commerce technology.

Contactless Mobile Payments

With this form of payment, customers at the store will not need to swipe a card or
use cash but simply download and install select mobile wallets. They can then put
their smartphone close to a supported terminal at the checkout to validate and
transmit payment. Money will be automatically deducted from their wallet.

Closed-loop Mobile Payments

It is similar to mobile wallets, except that it is only used when the customer is
transacting at the store or point of sale of a single brand with which it is affiliated. To
do this, the customer must register an account and provide his/her information on the
dedicated mobile application provided by the brand. Names that use this mobile
commerce technology are Walmart, Starbucks, Taco Bell, etc.

Mobile Point-of-sale (POS)

If you need to install a complex and fixed card reader in one place in the traditional
card payment method, the mobile POS uses a mobile card reader, which is portable.
Not only that, but the purchaser only needs their mobile phone coming with a small
attached card reader or contactless card reader.

Final Thoughts
According to technology experts around the world, mobile devices will be used more
often thanks to the development of mobile apps. It can be said that mobile
commerce technology is a great way for your business to reach customers and
increase sales. Now, that you’ve understood the concept and how it works, let’s visit
our blog for more guides, tips, and tricks on mobile commerce, or subscribe to our
newsletter to receive the latest technology trends and news worldwide, and the
knowledge and insights of the eCommerce arena. Thank you!

Mobile Commerce (M-Commerce) offers several benefits to both businesses and consumers,
contributing to the growing popularity of mobile transactions. Here are some key advantages:

1. Convenience:
 M-Commerce allows users to shop and make transactions from the convenience
of their mobile devices anytime, anywhere. This eliminates the need to visit
physical stores, providing a seamless and on-the-go shopping experience.
2. Accessibility:
 Mobile devices are widely accessible, and M-Commerce bridges the gap between
businesses and consumers. People who may not have easy access to a computer
or a physical store can still participate in online transactions using their
smartphones.
3. Speed of Transactions:
 Mobile payments are typically faster than traditional payment methods. Quick
and secure payment options, such as digital wallets and contactless payments,
contribute to shorter transaction times.
4. Personalization:
 M-Commerce platforms can leverage user data and preferences to provide
personalized recommendations, promotions, and targeted marketing. This
enhances the overall shopping experience for consumers.
5. Location-Based Services:
 M-Commerce apps can use location-based services to offer users relevant and
geographically targeted promotions, discounts, and information about nearby
stores or services.
6. Integration with Social Media:
  Many M-Commerce platforms integrate with social media, allowing users to share
their purchases, recommendations, and reviews. This social aspect can drive
engagement and attract new customers.
7. Cost-Effective:
 For businesses, establishing an online presence through M-Commerce can be
cost-effective compared to maintaining a physical store. It also reduces the costs
associated with traditional advertising and marketing.
8. Enhanced Customer Engagement:
 M-Commerce facilitates direct communication with customers through push
notifications, personalized offers, and order updates. This enhances customer
engagement and loyalty.
9. Mobile Marketing Opportunities:
 Businesses can leverage mobile advertising and marketing strategies to reach a
wide audience. This includes in-app advertisements, mobile-optimized websites,
and promotions tailored for mobile users.
10. Data Collection and Analytics:
 M-Commerce platforms can gather valuable customer data and behavior insights.
This data can be used to refine marketing strategies, improve user experience,
and make data-driven business decisions.
11. Global Reach:
 M-Commerce allows businesses to reach a global audience without the need for
physical stores in different locations. This expands market reach and potential
customer base.
12. Innovative Technologies:
 The integration of innovative technologies, such as augmented reality (AR) and
virtual reality (VR), within M-Commerce apps can enhance the shopping
experience by providing interactive and immersive features.

As mobile technology continues to evolve, the benefits of M-Commerce are likely to grow,
influencing how businesses operate and how consumers engage with products and services.

Mobile Commerce (M-Commerce) has found applications across various

industries, offering a wide range of services and functionalities through
mobile devices. Some notable applications include:

1. Retail and E-Commerce:

 M-Commerce enables users to browse products, compare
prices, and make purchases using mobile apps or mobile-
optimized websites. Mobile payments, digital wallets, and in-
app transactions are common in this sector.
2. Banking and Finance:
 Mobile banking applications allow users to check account
balances, transfer funds, pay bills, and even apply for loans
using their mobile devices. Mobile wallets facilitate contactless
payments, making transactions more convenient.
3. Ticketing and Travel Services:
 Users can book flights, hotels, and tickets for various events
(such as concerts or movies) through M-Commerce platforms.
Mobile boarding passes and virtual tickets are commonly used.
4. Food Delivery and Hospitality:
 M-Commerce applications in the food and hospitality industry
enable users to order food, make reservations, and pay for
services using their mobile devices. Food delivery apps are
particularly popular.
5. Transportation and Ride-Sharing:
 Ride-sharing and transportation services like Uber and Lyft
operate primarily through mobile apps. Users can book rides,
track their drivers, and make cashless payments using their
mobile devices.
6. Healthcare and Telemedicine:
 M-Commerce has facilitated the growth of healthcare apps that
allow users to schedule appointments, order prescription refills,
and even consult with healthcare professionals through
telemedicine services.
7. Education and E-Learning:
 Mobile apps in the education sector offer e-learning courses,
interactive lessons, and educational resources. Users can access
study materials, submit assignments, and communicate with
instructors through their mobile devices.
8. Entertainment and Media:
 Streaming services for music, movies, and TV shows are
commonly accessed through mobile apps. Users can subscribe,
stream content, and receive personalized recommendations on
their mobile devices.
9. Gaming:
 Mobile gaming is a significant part of M-Commerce, with users
downloading and playing games on their smartphones. In-app
purchases, virtual goods, and mobile gaming subscriptions
contribute to the revenue in this sector.
10.Social Networking and Communication:
 Social media platforms and messaging apps are essential
components of M-Commerce. Users can communicate, share
content, and even make transactions within these platforms.
 11.Utilities and Bill Payments:
 M-Commerce apps provide users with the ability to pay utility
bills, such as electricity, water, and gas, directly from their
mobile devices. This adds convenience and efficiency to the
billing process.
12.Government Services:
 Some government services are now accessible through mobile
apps, allowing citizens to pay taxes, renew licenses, and access
important information conveniently.
13.Real Estate:
 Real estate apps enable users to search for properties, view
virtual tours, and even make transactions for buying or renting
homes through their mobile devices.

These applications demonstrate the versatility of M-Commerce, impacting

various aspects of daily life and business operations by making transactions
more accessible and convenient through mobile devices.

Types of M-Commerce
M-commerce can be categorized by function as either mobile shopping, mobile banking or
mobile payments. Mobile shopping allows for a customer to purchase a product from a
mobile device, using an application such as Amazon, or over a web app.

A subcategory of mobile shopping is app commerce, which is a transaction that takes place
over a native app. Mobile banking includes any handheld technology that enables customers
to conduct transactions.

This is typically done through a secure, dedicated app provided by the banking institution.
Mobile payments enable users to buy products using a mobile device. Digital wallets, such as
Apple Pay, allow a customer to buy a product without needing to swipe a card or pay with
physical cash.

M-Commerce is a vast field which doesn’t end at buying a commodity online- it

includes all the behaviors related to checking any stuff online from your smartphone.

The different types of Mobile Commerce are-

1. Browsing for stuff online on your mobile – This type deals with surfing for stuff online
like looking for Groceries, Daily essentials, and electronics. We’re talking about dedicated
apps, optimized websites, or even social media platforms like Facebook or Instagram that
allow in-app purchases or linking to online stores.

2. Purchasing app-delivery stuff (Food delivery or e-commerce apps) – This type deals with
the services related to ordering things like food, cab pickup, and others.

3. Mobile banking – Mobile banking is the method that involves accessing the features of
the bank using online methods. The transactions are made from specific apps designed by
apps, though some financial services companies are now experimenting with chatbots or
messaging apps to deliver customer service.

4. Mobile App payments(Google Pay or PayPal) – This type primarily focuses on making
payment transactions through apps. The user is required to register their credit or debit card
and then use it whenever they want.

5. Purchasing or renting digital content (Netflix, Spotify, etc) on a mobile device – This
involves buying or renting online services like Music Streaming, Video Streaming, or
commodity-based on a rent basis.

6. Mobile person-to-person payments(Venmo or Xoom) – This type involves sending

money from one person to another, be it for buying stuff or sending it to someone in need.
This type of transaction can be made by sending money to someone’s number or to their bank
account directly.

How Mobile Commerce Works?

With most m-commerce enabled platforms, the mobile device is connected to a wireless
network that can be used to make online product purchases.

For those in charge of developing an M-commerce application, important KPIs to monitor

include the total mobile traffic, the total amount of traffic on the application, average order
value, and the value of orders over time.

Similarly, tracking the mobile add to cart rate will help developers examine, if visitors are
becoming customers. M-commerce developers may also be interested in logging average
page loading times, mobile cart conversion rates and SMS subscriptions.

In terms of mobile payment products, they operate through a form of peer-to-peer (P2P)
sharing. Once a mobile device is paired with a bank card’s information, the phone can be
waved over a payment terminal to pay for a product. This contact less payment via a mobile
device is feasible due to the use of Near Field Communication(NFC).

Applications of Mobile Commerce

In order to stay competitive in this fast-paced world, businesses must have a strong digital
presence. M-commerce, or mobile-first e-commerce, is one of the major trends that will
continue to shape the e-commerce landscape in the future.
It refers to a combination of mobile-friendly websites, mobile-friendly checkout, and fast
mobile website performance, which will make a store seem more like a personal shopping
assistant than a place to buy products.

Mobile commerce has entered into all spheres of our daily lives like- finance, retail,
telecommunication, healthcare, information technology, sales and services. Need for M-
commerce has increased multi-fold in recent times because of the ease of functioning and
accessibility they offer.

Some of the applications of mobile commerce are-

1. M-Commerce for finance
2. M-Commerce for Retail and After sale Services
3. M-commerce & Mobile ticketing
4. M-commerce & Mobile marketing
5. M-commerce for mobile entertainment
6. M-commerce for hotel reservations
7. M-commerce for Healthcare & Medicine
8. M-commerce for Information
9. M-commerce for Gaming
10. M-commerce for Intra-office communication

Advantages of M-Commerce
Advantages of M-Commerce are-
1. Increases the amount of customer retention by being easily accessible to them
2. Wider variety of commodities and services
3. More options for selecting the product
4. Convenient for the consumer to compare the pricing, product reviews, and making purchases
without the use of a computer.
5. Multiple options for payments like the credit card and debit card payments,
6. Better user experience

Disadvantages of M-Commerce
Disadvantages of M-Commerce are-
1. The technology required to set up M-commerce at the moment is very expensive. The initial
cost to begin a business is very high.
2. In developing countries, the network signal is not very good and the providers are not capable
of providing good speed. Due to this, it is not suitable for data transfer.
3. There is a risk of security- Although it is quite safe these days, there is always a chance of
data leaking and intrusions.
4. A poorly designed app can lead to lesser number of purchases because of customer
dissatisfaction.
5. Mobile payment is still not available across many locations in the world.

Future scope of M-Commerce

M-Commerce is rapidly expanding in today’s time. Everyone is busy and they don’t have the
time or energy to go to the market and buy stuff for them. Instead, they prefer ordering from
their home itself.

The biggest trend for M-Commerce is its market share/ growth. M-Commerce spending in
2018 was calculated at $501 Billion and it is expected to grow more to $740 Billion by 2023.

Major Trends for M-Commerce indicating Great Future Scope

1. The mobile wallet market will grow to $5.3 trillion by the end of 2020 – Mobile wallets
have made our life easier by reducing the hassle of carrying a wallet with us everywhere. It
offers the convenience of making as many transactions we want by just storing our credit or
debit card details just once. A proof of this trend is the fact that the market size of mobile
wallets has grown from $1.65 Trillion to $5.3 Trillion between 2013 and 2020.
2. M-Commerce market will see new contenders between 2020 and 2025 – Currently, the
payment markets are captured by old players like PayPal, Google, Apple, and SAP. But in the
coming years, you can see the increase in the number of new contenders capturing the
majority amount of market share. They will bring more opportunities for customers and share
the market share more uniformly.
 3. The mobile commerce revenue is expected to hit $3.56 Trillion by 2021 – The revenue
generated has been increasing with each passing year and will touch $3.56 trillion by 2021.
This is proof of the increasing demand for mobile-based shopping.

M-Commerce Key Statistics & Insights

To help you understand the potential of mobile commerce, check these insights and key
statistics:

 96% of Americans own a cellphone.

 8 out of 10 Americans shop on their Mobile devices.
 Mobile commerce is expected to outgrow non-mobile commerce in 2021.
 Mobile digital advertising spend is double that of desktop advertising spend—$71 billion was
spent on mobile advertising in 2018, while only $37 billion was spent on desktop.
 On Black Friday of 2018, 66% of shopping was done on mobile devices.
 In 2021, mobile commerce sales will account for more than half of total e-commerce sales.
 Today, one-third of purchasing decisions is influenced by researching products on mobile
devices.
 More than half of retailers already have a mobile app and over 50% of the rest is going to
build one soon.
 In mid-2019, mobile e-commerce spending in the United States reached a smashing $41.2
billion.
 The total number of US-based shoppers who make mobile purchases will reach 168.7
million.
 The volume of mobile commerce sales will be more than double between 2017 and 2020,
reaching $ 336 billion this year.