Mobile commerce technology: Definition, theory, and how it works

Since the appearance of the internet and wireless technology, the world has witnessed many breakthroughs in the trading, exchange of goods and information. Traditional commerce is gradually giving way to e-commerce, especially with the continuous development of mobile commerce technology.

More people are dependent on mobile devices than ever. Obviously, mobile is a fertile land that any business should not ignore.

As a result, consumers can now use smartphones to interact with businesses 24/7, from anywhere – at home, at work, on the bus, etc. This constant connectivity has created more opportunities for marketers to connect with consumers, launch mobile commerce campaigns, and create another conversion channel by themselves through digital marketing.

eCommerce is gradually moving to the form of use on mobile applications. Instead of shopping at websites or on the traditional platform of computers, consumers are now more excited about mobile applications. According to commercial experts, the trend of super apps and all-in-one apps will increase. With many features, eye-catching interface, shopping applications are said to be growing rapidly.

Understanding what mobile commerce technology is and “talkable” statistics will be a good stepping stone to help you know the importance of this market and why it is attracting more and more businesses to invest, including local businesses like you.

Let’s explore now!

Mobile commerce technology

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 the 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, 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%.


It is not simply part of eCommerce.

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.

>> Read more: Mobile commerce and eCommerce: 5 Biggest Differences

Types of mobile commerce

There are 3 types of mobile commerce, including:

  • 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.

  • Mobile banking
Differences between mCommerce and eCommerce

Now, transferring and receiving money over the internet has never been easier and more compact. Most banks have developed this service for mobile phones.

  • Mobile payment

The cashless needs of users have been met with diverse mobile payment options.

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 has 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.

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.

>> Read more: Mobile commerce trends in future: Opportunities and Challenges

4 Main mobile commerce technologies


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.

With this mobile commerce technology, users will receive one-way push notifications, such as news, alerts, offers, and other data. In addition, two-way interactive messaging is also supported, allowing users to message call centers to look up personal information, such as bank accounts.

4 Main mobile commerce technologies


USSD is a mobile commerce technology that is only popular in a few markets like parts of Africa, Europe, Central America, Southeast Asia, and India. Similar to SMS, users appreciate USSD’s ubiquitous availability and ease of use. It is accessible from almost any phone. However, what USSD does better than SMS is that it is encrypted so that it can incorporate secure password or mobile PIN protection. Thus, the messages that users send will not be stored on their mobile devices.

WAP/Mobile Web

It is suitable for users who do not use smartphones but still want to use mobile web access services. Compared to the original WAP standards, WAP 2.0 is a step further, providing them much closer to a desktop and laptop Web experience. It is a variation of HTML, which most smartphones are supporting for their users to use. However, WAP does not have access to the features of users’ mobile phones like every app does.


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, then sends the information to give commands to the mobile device. What makes STK so highly regarded also includes its security capabilities in the form of identity verification and encryption, making it ideal for financial or mobile commerce deployments.

Mobile commerce technology’s advantages

Increase customer retention

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

Mobile commerce technology’s advantages

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 easier 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 regularly spend their time.

Diversify payment options

The variety of payment options is also its advantage as it can help the customer’s purchase process go faster. Specifically, about these options, we will explain 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, or 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 and apply these mobile commerce features for your application to be more successful.

  • Push notifications: Make sure it’s useful and relevant to your customers’ 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 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 features

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 into 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

Mobile commerce payment methods

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, and Taco Bell, etc.

Mobile point-of-sale (POS)

If you will 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, you’ve understood the concept and how it works, let’s visit our blog for more guides, tips, and tricks on mobile commerce. Like and share the post if you find it useful. Thank you.

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