News & Resources

Easier transactions key to mcommerce success

Mar 29, 2013 Dave King

As technology advances, everyday tasks become easier, and this is certainly true in the payments sphere. With smartphones and tablets becoming more popular with consumers, mobile commerce may be in a position to eventually take the place of plastic as the most convenient purchase vehicle. Due to this potential, the mcommerce industry has been working to improve the seamlessness of transactions.

A case study in convenience
Its difficult to talk about mobile payments without bringing up Starbucks. The coffeehouse chain is currently one of the leaders in the realm of mobile commerce, having implemented these solutions early and promoting them extensively. Customers are rewarded by the store by being allowed to take advantage of the benefits of their loyalty cards from their phones, as well as making payments and receiving deal offers.

More recently, Starbucks set an example for other retailers in how they might harness the hunger for mobile commerce into real results. According to Mobile Commerce Daily, the franchise recently teamed up with discount website Groupon to offer $10 electronic gift cards for only $5 via the service.

When people caught wind of the Starbucks gift card offer, they responded swiftly and in droves. More than 100,000 people bought the coupon in such a short period of time that Groupon's website crashed. This is especially remarkable, the source noted, since Groupon has been struggling in terms of sales. Because the deal was so convenient and many people use mobile devices in their everyday life, consumers were able to buy the deal as soon as they noticed it. These instant mobile payments may very well be the form that impulse buying takes today, and this can benefit businesses.

"Putting the right offer in the right context in the right time frame is so much easier now than it ever was before, so consumers are responding by being willing to say, no matter where I am at - whether at home watching TV or at my kid's soccer game - I can make this purchase right away," Jeremy Jacobs, director of strategy for marketing agency Resource, told Mobile Commerce Daily. "It is really not that much of a shock that this was so successful and crashed Groupon's site."

The news provider further explained that the fact Starbucks already has such a strong vision for how to bring in potential customers. The $10 gift card was offered in several ways - load it onto an existing Starbucks card, use it at the company's online store or register it with their mobile app. This strategy works because, while it doesn't place too much pressure on users to get the app, it advertises it to people who may not already be aware of it and incentivizes its adoption.

Going frictionless
Finextra reported that at the most recent European Payments and Consulting Association (EPCA) summit, frictionless payments - much like the recent Starbucks success - are likely to be one of the next big developments in the mobile sphere. At the EPCA, experts claimed that technologies that help users store payment data and perform card-not-present transactions are likely to be a focus for startup developers in the industry. This could help merchants do more business and widen their customer bases.

As a caveat, the source said, brands must also work to build trust with both retailers and consumers if they wish to succeed. Trusting an app with a wealth of personal and financial data, which could wreak havoc on shoppers' consumer credit report if used against them by identity thieves, may seem risky to many individuals. It should be the current mission of the mobile commerce sector to quell fears through their actions. If they can do this while also maximizing convenience, stores may see serious revenue boosts by implementing mobile payment plans.