M-Commerce is the future of E-commerce.
Mobile industry executives and industry analysts have been talking about mobile payments for a long time now, suggesting it was going to transform the way merchants sell and consumers buy products. Last year, Juniper Research put the estimated value of mobile transactions by 2017 at more than $3.2 trillion. To give you some perspective, that is more than the Gross domestic product (GDP) in all but 10 nations across the globe.
More mobile devices means more mobile payments
Even though this sounds like a simplification of the transition into m-commerce, it is simply true. With the introduction of newer, faster tablets and budget tablets on the market, more users will be purchasing products on these devices. The research shows that tablet users are far more likely to complete a purchase than smartphone users. We can expect this trend to continue for the next few years.
What you think of as your bank is changing
Both Apple and Google eliminated wireless carriers completely when they allowed for the easier purchase of digital goods within their respective app markets. Now wireless carriers are poised to become a major influence in the payment ecosystem. We are already seeing many wireless carriers offer incentives to merchants that let the user pay by charging their cell phone bill as opposed to having a charge on the app store.
Two clicks is all it takes
The introduction of direct carrier billing providers opens up simple ways for merchants to drive up sales. Before too long users on any mobile device are going to have a two-click purchase process. Because it does not have the same constraints as having to download an app, the streamlined checkout process is already proving successful, with studies showing that the conversion rates are three times as high with this process. This data led to merchants such as Facebook and Skype integrating direct carrier billing.
Developers are actively disturbing the market
As a society, we are actively refining the merchant-consumer relationship as we know it today. Because mobile apps have different payment capabilities embedded in them (whether these are direct carrier billing providers or credit card processors like Stripe), it means that these installed apps are becoming catalysts for mobile commerce. This means that there are billions of different apps installed that all have these payment capabilities.
Advertisers are getting smarter
Advertisers are realizing that mobile is the focus of the future. This means offering contextual, personalized, and valuable content to their customers. They are actively getting rid of un-optimized email and generic banner ads, replacing them with personalized content, short-format mobile video (Instagram, Vine), and multimedia messaging. The advertisers want the focus to be on m-commerce because they realize that this is a new market.
What this means for business
Ultimately, this complex mobile payment ecosystem is going to see a number of different winners emerge. These will include the merchants who actively embrace their mobile customers (rather than viewing mobile as an extension of their desktop site), payment platforms that simplify the payment process, and advertising companies that are able to deliver the best-personalized options.
There is no doubt that mobile devices are going to be the primary screen for shopping, advertising, and the consumption of content. For the winners it means playing a massive role in the trillion-dollar mobile commerce opportunity. For those who are unable or refuse to evolve, it could mean losing market share at a rapid pace.
Richard has been working in the ecommerce industry for over 5 years specialising in Enterprise solutions. When he is not blogging, Richard leads a team of Magento developers at Infinity.