What Is Mobile Commerce? Pros & Cons for Businesses in 2023

Our ecommerce expert explains everything you need to know about mobile commerce. Learn how it works and see if it's a good model for your business.

Everyone has heard of e-commerce, but what is m-commerce? The “m” stands for mobile and the term refers to all monetary transactions that take place using a mobile device. While the term mobile commerce or m-commerce has not yet become part of the daily vernacular, using mobile commerce is something that most people do multiple times a day without even thinking about it. Every time someone uses their phone to make a purchase on Amazon or transfers funds from one bank account to another on a tablet - that is mobile commerce. 

Mobile commerce includes activities like product purchases, online transactions, bill payments and online banking services when completed using a mobile device (as opposed to visiting a brick and mortar location or even using a desktop computer). In 2020, 61% of visits to online stores began on a mobile device, but only 45% of transactions were completed on mobile. That is likely because it can be more difficult to complete purchases on a mobile device, both due to the small screen size and security concerns. 

Change is in the air, however, and mobile commerce is becoming more secure, more user friendly and ever more popular. Any online business would be remiss in not providing a strong mobile payment option for their customers

How does Mobile Commerce Work (a.k.a. m-commerce)?

Anytime a mobile device is used for any sort of monetary transaction, that is mobile commerce. There are three main types of mobile transactions:

  1. Mobile shopping - this refers to the purchase of any goods or services from a mobile device, whether from a mobile app or from a mobile-optimized website.
  2. Mobile banking - most banks offer mobile apps that customers can use to transfer money, deposit checks, and more. In some cases, certain transaction types are limited and only allowed from a desktop site.
  3. Mobile payments - using Apple Pay to purchase groceries or Cash App to split a bill in a restaurant are both examples of mobile payments. This type of payment can also be used when shopping on mobile.

There are many different types of mobile commerce payment methods that consumers can use, and it’s generally up to the merchant to determine which options are open. 

Examples of Mobile Commerce Payment Methods

The most common types of mobile payment methods include:

  • Mobile wallets
  • Contactless mobile payments 
  • Closed loop mobile payments
  • Money transfers
  • Mobile point-of-sale (POS)
  • Carrier payments

Mobile Wallets

When using a mobile device to make a purchase, convenience is the name of the game. A mobile wallet is essentially a digital version of an actual wallet, allowing a customer to complete a purchase on a mobile device without swiping an actual card. Apple Pay and Google Pay are both examples of mobile wallets, allowing for the storage of credit card details and shipping addresses so that information does not have to be re-entered at every check out. 

Contactless Mobile Payments

Once a customer is already using a mobile wallet and has already stored their information, they can then use that information to make a payment in a brick and mortar store. By simply placing the phone on a supported terminal, the details are validated and a mobile payment is made. 

Closed Loop Mobile Payments

In a closed loop mobile payment, the customer’s details also only have to be input once and then are stored for future transactions. Different from a mobile wallet, a closed loop payment is valid only for a particular brand’s mobile app. On the Starbucks app, for example, customers can pre-load money to their account and then use that to make purchases in any Starbucks. 

Money Transfers

Mobile money transfers can happen using a mobile banking app or via other peer-to-peer apps like Cash App, Paypal or Venmo. Whichever platform is chosen, money can change hands securely at the touch of a button on a mobile device. 

Mobile Point-of-Sale (POS)

A smartphone or tablet can operate as a mobile point-of-sale (POS), filling the role of a cash register by wirelessly processing sales transactions. This is a good solution most often used by small retail merchants who don’t want to invest in expensive equipment. 

Carrier Payments

Some mobile carriers offer a mobile commerce solution in which customers can make purchases and the payment amount is included in the monthly bill from the carrier. This is a popular option in developing countries in particular because it does not require a bank account. 

Mobile Commerce Payment Options

From the consumer perspective, there are a number of different options that they might want to use in order to make mobile payments. As mentioned, each merchant can decide for themselves what payment options they will accept, but following are several of the most common that most consumers would expect to see as an option:

Apple Pay

Whether on an e-commerce site or in a physical store, Apple Pay is a convenient way to make payments without having to swipe a card or enter payment details. Customers store their payment data one time and then can use Apple Pay’s mobile app to pay with the click of a button. All of their personal details remain on their own device rather than being transferred to the merchant, making Apple Pay a secure option in addition to convenient. 

Google Pay

Google Pay offers the same service as Apple Pay, just for Android users as opposed to those with iPhones. Google Pay easily integrates with Google’s other services so it’s easy to make payments directly via Gmail, Android messages or Google Home. It also has security features in place to make sure that personal and financial data is protected during transactions. 


PayPal is one of the most popular mobile commerce players and has been working hard in recent years to close the payment gap between mobile and other devices. PayPal allows users to make payments to individuals or businesses after storing their payment details one time in the mobile app. Users can even register their device with a permanent login and then use PayPal to check out with one click on any e-commerce site that accepts this payment method.

Klarna Pay

Klarna provides an extra convenience to shoppers by letting them shop at a multitude of e-commerce sites directly from the Klarna mobile app. Consumers love the streamlined experience of being able to go to one site and make an assortment of purchases all without inputting payment details over and over again. 

What is the Difference Between E-commerce and Mobile Commerce?

E-commerce is a more general term that encompasses all sales and commercial transactions that take place online - think Amazon and other online stores, all of those are e-commerce sites. Mobile commerce, or M-commerce as it’s becoming more commonly known as, is an offshoot of e-commerce and refers specifically to transactions that are completed using a mobile device

It’s important for merchants to consider how their shopping experience plays out on a mobile device because such devices are quickly becoming the main way that customers shop. Today’s consumers have high expectations when it comes to user experience, and if their mobile commerce experience is sub-standard, they will look elsewhere

What are the Benefits of Mobile Commerce?

The biggest benefit of mobile commerce is for consumers, giving them a seamless and frictionless shopping experience. When it comes to business owners, there are also significant benefits of mobile commerce, including:

  • Increased customer satisfaction - happy customers mean more profits so it’s in every business owner’s best interest to make sure that the customers are satisfied. Mobile commerce means the entire browsing and purchasing experience goes faster and more smoothly. 
  • Easier access to customers - online shoppers generally must provide an email address to complete the purchase, giving the merchant the ability to send follow-up and future marketing emails. With m-commerce, merchants can send push notifications directly to customers’ mobile phones which they are more likely to read than emails. 
  • Insightful analytics - much customer data is collected from mobile payment apps that can be used to make sure that merchants are offering tailored promotions and taking other steps to bump up sales.
  • Scalability - as more and more people use their mobile devices for shopping, the potential customer base and ability to reach customers where they are grows substantially. 
  • Omnichannel - for merchants who have both a brick-and-mortar store and an online presence, mobile commerce increases the ease with which customers can flit between the two options. Sometimes a customer will see a product in a store and then will search online for reviews and only complete the purchase later on. 

Why is it Important to Integrate M-commerce and E-commerce Payments for Your Business?

85% of Americans own a smartphone. This number will continue to grow as will the amount of time that people spend on their phones and the types of activities they will complete using mobile apps. In order to remain competitive, merchants must make sure they offer a seamless and user-friendly experience for their customers who are using their mobile phones or tablets to shop. 

It’s not enough to make sure that a website is optimized for mobile, but rather it’s important to ensure that the checkout process is optimized as well. It’s safe to assume that the majority of shoppers will be accessing e-commerce sites via their cell phone - the better the experience that merchants can offer, the higher conversion rates will be.  

Retailers - whether online or IRL (that’s “in real life” for those who aren’t in the know!) - must always be on top of the newest shift in retail trends. The recent trend is m-commerce and anyone who doesn’t jump on that bandwagon is going to be left behind. 

How Can Pay.com Help With M-commerce?

When choosing a payment infrastructure, it’s important for online merchants to keep in mind the fact that many shoppers will be using their mobile devices for purchases. Pay.com is an expert in ensuring that merchants can provide their customers with the most seamless and frictionless check-out experience possible. 

  • Variety of payment options - Apple Pay, Google Pay, PayPal, Klarna and more...Pay.com lets you offer your customer the ability to pay with any method that they like, including all of the major m-commerce solutions. 
  • Seamless checkout - Regardless of the device that a customer uses, a site that is powered by Pay.com will offer the consumer a smooth and easy checkout experience. 

Pay.com can help any new merchant that is just getting started or an existing merchant looking to upgrade the payment experience offered on their site.


What is meant by mobile commerce in general?

Mobile commerce refers to any financial transaction that is completed using a mobile device. It can be thought of as an offshoot of ecommerce. Whereas ecommerce includes any transaction that takes place online - from either a desktop or a mobile device - mobile commerce (also known as mcommerce) is specifically those transactions that use a cell phone, tablet or any other mobile device.

How much of ecommerce is mobile?

The mobile portion of ecommerce sales is growing rapidly. In 2016, 52.4% of ecommerce sales were mobile, while that number in 2021 has jumped to 72.9%.

What are the types of mobile commerce?

The three main types of mobile commerce transactions are:Mobile shopping - any purchases that are made using a mobile device, including visiting a website using a mobile browser or purchasing directly via a brand’s mobile app.Mobile banking - using a bank’s app to cash a check or transfer money from one account to another are both examples of mobile banking. Mobile payments - while mobile payments may also be used when doing mobile shopping or mobile banking, this category also includes using a mobile device to make a payment in a physical store (i.e. scanning Apple Pay at a checkout terminal in the grocery store) or using an app like Cash App or Venmo to transfer money to a friend.

What is the future of mobile commerce?

Mobile commerce is expected to continue to grow and thrive. The proliferation of mobile devices makes it easier for businesses to analyze customer behavior and offer targeted ads and offers. This makes the shopping experience better for buyers and more profitable for businesses at the same time. Mobile commerce is not just a passing trend, but is a feature of the new reality in which smartphones are the hub of people’s existence.

Meet the author
Emily Kirschenbaum
Emily is a content writer with a special interest in fintech and business. She loves sharing her knowledge to help small businesses take their first steps towards success.

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