2014 was the year mobile commerce came of age, heralded with the launch of Apple Pay in October. It was one of the tech company’s key innovations within the iPhone 6, which integrated NFC technology with easy point of sale (POS) transacting. In other words, the iPhone 6 provided the ability to tap your phone to another NFC equipped device and pay for purchases at real world stores. Of course, using your smartphone as your credit card isn’t, on the face of it, any more exciting that using it as a flashlight. However, Apple’s entry into the world of online payment is about much more than just its latest smartphone wizardry. It adds to the growing number of web companies as towering and diverse as Google and Amazon, who are looking to process cash.
By 2015, US internet users will join a growing list of countries that access the web through mobile devices more than through PCs. The macro trend for the coming year is clear as the variety and complexity of devices continues to grow.
However, the term mobile commerce is a rabbit hole which can easily apply to a range of divergent technologies that are available on touch devices. A Square-enabled mobile POS, FeLiCa’s tap-to-pay system at train stations, a game offering in-app purchases and a retailer’s mobile-enabled website all fit the criteria, but there’s very little overlap between them.
There are many areas into which mobile commerce can be categorized. For now, these are the big six:
- Commerce website accessed via mobile device
- Mobile-optimized/responsive website purchase via device
- Mobile device payment at retail POS
- Mobile app-only purchases (e.g. Uber, Square)
- In-app social media purchases (e.g. Facebook, Twitter)
- Mobile-specific rewards, couponing to drive physical store traffic/transactions
Let’s look at the trends to expect in the industry in 2015.
More than Online Shopping on Your Phone
If it wasn’t already clear by 2014, it will be painfully obvious by 2015 – POS retail on mobile isn’t simply online shopping on your phone. Handheld devices continue to innovate the retail experience and bricks and mortar companies have begun to capitalize on the trend. Stores are now using mobile to capture customers in an effort to bridge the gap between “bricks and clicks.”
From scannable in-store products to discount coupons, established retailers will begin to embrace the mobile experience in 2015 rather than choosing to cower in the corner.
Burberry’s in particular has been a master at collecting a vast cache of devotees’ photos wearing their iconic trench coats using their smartphone. And they aren’t the only ones.
According to Max Kalehoff, from social media marketing company, SocialCode, some of its clients are spending “TV scale” money on social media campaigns, as they did during last year’s Football World Cup. It may be in 2015 when social media does indeed catch up to TV advertising spending.
The Mobile Web
Yes, we’re in the middle of an app craze. However, the power of the mobile website continues to fascinate.
Consider recent reports that show mobile browsers usage, although still less prevalent than desktop, is capturing a growing share of the market. In most cases this trend will continue, as customers prefer to visit mobile sites like Amazon and eBay to place orders rather than download native.
Online businesses need to see that, with the exception of certain niches like gaming, the mobile web is essential and apps are added bonuses. In 2015, the mobile web should be viewed as a stream for bringing in new business, whereas apps should be used as loyalty programs for repeat customers.
Users may have become more comfortable making in-app purchases. However, the actual number of apps with which users interact has plateaued. In that world, Facebook is one of the few companies with scale and stickiness to succeed with its own payment system. Few others share that luxury. In 2015, social game developers may look to Facebook credits and similar schemes as a means of generating revenue.
This won’t necessarily challenge the dominance of Google Wallet, especially on the Android platform. Businesses like Lyft, whose success depends entirely on its app, continue to focus on third-party mobile-only payments like Google Wallet, and more companies will follow the example next year.
Other less obvious companies also think they can offer mobile payments, and will become a feature in 2015. Starbucks, for example, built its own mobile commerce platform as an extension to its existing infrastructure, bringing transactions and loyalty points to the phone in a simple, straightforward package that both complements and mirrors its offline experience.
The Smartphone Credit Card
Just as the magnetic strip revolutionized payment by plastic credit card, NFC and other fast-evolving technologies will facilitate the move to payment using mobile technologies in 2015.
NFC chips inside most new smartphones transmit customer payment and banking data when scanned on a reader. Unlike a credit card, smartphones can include interactive payment processing and other financial services which PayPal president, David Marcus, calls Money 3.0.
Will we see Money 3.0 become ubiquitous next year? And what form will the technology take?
NFC chips could, for example, be placed inside wearable smart technology — also coming of age in 2015. However, some analysts question NFC’s payment dominance, as tapping a device may not be significantly more convenient than swiping a card.
There is also rival technology, such as PayPal’s Beacon and Apple’s iBeacon, which use proximity-based Bluetooth connections instead. These are able to use alerts sent to customer handsets after they cross a store’s “digital fence”. This then syncs with apps to provide inventory, floor plans, discounts, and preordered items.
A Mobile Revolution
These developments may seem far from implementation at this stage, but the technology is already with us. Biometrics, for example, including everything from voice recognition to fingerprint and retina scans, has paved the way for more secure mobile transactions. Now we need banks and customers trust the technology.