Mobile Commerce: Definition, Benefits, Examples, and Trends

By

Andrew Bloomenthal

Updated March 24, 2022

Reviewed by

JeFreda R. Brown

Fact checked by

Amanda Jackson

What Is Mobile Commerce?

Mobile commerce, also known as m-commerce, involves using wireless handheld devices like cell phones and tablets to conduct commercial transactions online, including the purchase and sale of products, online banking, and paying bills.

Key Takeaways

Mobile commerce refers to business or purchases that are conducted over mobile devices like cell phones or tablets.
M-commerce lets users transact anywhere, provided that there's a wireless Internet provider available in that area.
Mobile commerce has increased rapidly as security issues have been resolved.
Companies like Apple and Google have introduced their own mobile commerce services.

Understanding Mobile Commerce

Mobile commerce is a large subset of electronic commerce, a model where firms or individuals conduct business over the Internet. As of 2023, nearly 97% of Americans own a cell phone, and 85% of them owned a smartphone. This is up from 35% in 2011.

Many products and services can be transacted via m-commerce, including banking, investing, and purchases of books, plane tickets, and digital music. The rapid growth of mobile commerce has been driven by several factors, including increased wireless handheld device computing power, a proliferation of m-commerce applications, and the resolution of security issues.

M-Commerce vs. E-Commerce

Electronic commerce (e-commerce) refers to buying and selling goods and services over the Internet. E-commerce can be conducted via a desktop computer, laptop, smartphone, or tablet, but it's typically associated with a computer in which a user has to find a location with an Internet connection.

Conversely, m-commerce specifically refers to transactions done via a smartphone or mobile device. M-commerce users can transact anywhere provided that there's a wireless Internet provider available in that area.

M-commerce transactions tend to be accomplished with a few clicks. E-commerce is done via a tablet, laptop, or desktop and might involve more time and exploring a company's website.

Benefits of Mobile Commerce

The range of devices capable of mobile commerce has grown. Digital wallets like Apple Pay let customers make in-store purchases without the inconvenience of swiping cards. Social media platforms such as Facebook, X (formerly Twitter), Pinterest, and Instagram, launched "buy buttons" on their mobile platforms during the mid- to late-2010s. This enabled users to conveniently make purchases from other retailers directly from these social media sites.

M-commerce apps allow for location tracking via GPS to offer customers help finding items in stores. Personalized shopping experiences can also connect retailers with their clients.

Digital commerce transactions are likely to continue climbing as content delivery over wireless devices becomes more streamlined, secure, and scalable.

Ways to Improve Mobile Commerce

Quick-loading web pages are likely to win more sales because consumers can be impatient and demand instant gratification. Mobile checkouts must let buyers easily enter payment information, preferably with mobile wallets that eliminate the use of manual entry, thereby reducing human error and facilitating a smoother checkout experience.

Mobile Commerce Videos and Marketing

Mobile applications that use video to demonstrate a product's key features are likely to generate more revenue. An online foreign exchange broker who sends video links illustrating its new mobile trading application will likely win more clients.

Mobile Web and Mobile Applications

Consumers typically use Google or social media promotions to initiate online shopping searches. Browsers tend to drive more transactions than mobile applications as a result. Consumers often pair the use of mobile applications with mobile websites for this reason, to enhance their overall shopping experience.

What Is M-Commerce Most Commonly Used for?

M-commerce has streamlined the processes of shopping, banking, and bill payment. Many consumers can easily manage their financial lives on their phones. Digital wallets are also a common convenience.

How Much in the Way of Sales Has M-Commerce Generated?

Mobile commerce sales in the United States were an estimated $431 billion in 2022, according to the market research company Statista.

Are There Risks Associated With M-Commerce?

Anyone who owns a cell phone can tell you that they're easy enough to misplace and lose. You might think your phone is safe in your pocket and break into a jog in the park, only to realize 10 minutes later that it fell out somewhere along the way. The phone's contents, including your personal financial information, passcodes and links, might be easily accessed by anyone who finds it.

This could have disastrous results if you haven't taken safety precautions. But security can be enhanced by setting up multi-factor authentication, including biometrics such as fingerprints and retina scans.

The Bottom Line

M-commerce provides numerous benefits to both businesses and consumers. It's a rare individual who doesn't own some type of mobile device and businesses can reach them more easily with the advent of mobile commerce. Consumers can access coupons and discounts directly on their devices and accomplish banking tasks with ease. It's a win/win for both sides and advantages should continue to grow as new technology is discovered and advanced.

Article Sources

Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.

Zippia. "25+ Incredible US Smartphone Industry Statistics [2023]: How Many Americans Have Smartphoness."
Meta. "Testing a New Way for People to Discover and Buy Products on Facebook."
X. "Testing a Way for You to Make Purchases on X."
Pinterest. "Coming Soon: Buyable Pins!"
Instagram. "Introducing Checkout on Instagram."
Optimizely. "B2C Ecommerce Benchmark 2019," Pages 4-7.
Statista. "Mobile Commerce in the United States - Statistics & Facts."

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