Why in-app commerce is on the rise

Why in-app commerce is on the riseThe promise has hung around mobile for years: Just pay with your phone. When any extra inconvenience can result in a lost sale, ease and convenience are paramount. The mobile promise of engaging with a customer anywhere, and immediately converting that engagement to a sale, has been the penultimate retail fantasy. So why has it taken so long to start to see this behavior?

Well, the funny thing with a fantasy is that reality can often be a letdown. Getting back to one’s roots camping off the beaten path in a forest is great, until facing the realities of bugs, bears, and rain (unless that’s your thing – it’s not mine). Mobile might have been promising ease and convenience, but the experience for several years has been anything but. Want to buy something with SMS? Well, the carrier is going to take a large cut of that transaction, and the bill is going to appear on the user’s phone bill (which is a pain point for many US consumers). Enter payment details online? Good luck navigating that WAP page. So what’s merged the fantasy with the reality?


Applications, specifically post-iPhone applications, offer integrated ease and convenience. With high quality, content specialized apps, extending a web payment system to mobile phones is a pleasure for consumers (perhaps until they get the bill). Now we’re seeing in-app commerce like from Ghirardelli’s mobile storefront. Or perhaps more interestingly, integrated store credit programs like the Starbucks Card Mobile App. Starbucks’ app links the user’s card with a backend payment system, so users can check their balance and add more credit to the card using a payment option on file. In the Seattle area, stores have been outfitted with 2D code readers which allow users to just use a code displayed on their phone to pay – no wallet required.

We’re going to see a lot more of these types of mobile apps over the next year. App development costs are low enough for most national and even regional brands that it becomes a no-brainer, especially if the app can generate a revenue stream of its own. The US version of m-commerce may be evolving on a very different pathway than the near-field communication technology powering Asian m-commerce, but the scenarios we’re seeing are equally as powerful as the case studies we’ve been yearning to replicate from overseas.