Mobile commerce - or mCommerce to use its more colloquial title - is nothing new. But could 2012 be the year that mCommerce really makes its mark on the mainstream? We find out.
For millions of consumers around the world, mobile payments are already second nature. Forecasts from research group IDC suggested that around 472 million smartphones made their way to shop shelves during 2011 , consumer demand helping to fuel the rise of one of the fastest growing industries on the planet - app development.
Some estimates suggest that the app industry will be worth some £12 billion by the end of this year, with device users the world over purchasing digital content using the latest and greatest handsets.
It's little wonder that digital content has long been seen as the natural home for mCommerce. But mobile payments aren't just relevant for apps, games and music. Increasingly, they're starting to gain traction with some of the countryís biggest high-street brands, offering customers a new, convenient way to pay for goods and services.
In October last year for instance, Domino's Pizza recorded online sales of more than £1 million in one Saturday night as 13% of customers used their mobile devices to purchase food. A number of top high street brands such as New Look, Topshop and Next have also said they will be investing heavily in mobile platforms to optimise sales around this channel, and new research suggests that 53 % of UK retailers plan on developing mobile optimised sites.
This is important. New payment trends rarely take off without the support of the big players who have the customer base so vital to driving adoption. So have we already reached the point where mobile payments have become the preferred way to pay for consumers? Or - at the very least - have they become as common as card transactions?
Perhaps not yet - but it seems that we're certainly on the way. A report by Kelkoo predicts that for the third year running consumers in the UK will be the biggest mobile shoppers in Europe, expected to spend £4.5billion using mobile devices. In context, that's an increase from just £0.7billion in 2010 - staggering growth of 584% in just two years.
This is great news for retailers. With an 'always on' audience, browsing and buying everywhere from their bed to train carriages, the opportunity is there to tap into an increasingly active channel of buyers. But like any new channel, it's important to take a step back and think about how to make the most of it.
One vital consideration is usability. Our own research conducted last year shows that 39% of smartphone shoppers are frustrated by the length of time it takes to process payments via their mobile. A further 38% said that they're irritated by the amount of information that they need to provide when doing so. Considering that one of the big selling points of mCommerce is convenience, itís clear that there's some way to go yet.
Bespoke apps and mCommerce channels will help to fix that issue. The investment noted above from some of the high-street's big players shows that mobile is a channel they take seriously, and much of the cash they put in will presumably be focused on helping to make the mobile shopping experience as flawless and simple as it should be.
Of course, usability isn't the only thing to think about. Different channels carry different fraud challenges and it's doubly important that retailers have the right strategies in place to tackle fraud on mobile.
That's not always easy. 'Traditional' security standards like authentication tools VerifiedByVisa and MasterCard SecureCode can be tricky to render on mobile devices, potentially slowing the purchasing process down even further. Risk screening tools can help bridge the gap, using environmental factors to screen transactions. And companies like CellPoint and Mobank have developed custom tools that offer high-level authentication tailor made for a mobile experience.
It's undoubtedly clear that the mobile revolution is upon us. But making the most of it will mean finding the perfect blend of security for the retailer and simplicity for the customer.
WorldPay has recently partnered with two industry leaders to further widen its m-payment portfolio. Firstly, a partnership with MoBank now allows WorldPay customers to develop secure, branded mobile-optimised payment solutions for their business. And travel and retail customers will be able to make the most of CellPoint's mTicket solution, which brings simple and secure ticketing to any iPhone, Android or web browser enabled device.
And last but not least, the addition of Boku to the WorldPay portfolio means that merchants can offer their customers the ability to buy and pay for goods directly through their mobile operator bill. We're delighted that this trinity of partnerships is helping to bring a wide range of new services to WorldPay customers everywhere.
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