Mobile commerce continues to gain traction among consumers and merchants, but have we reached the tipping point for mobile commerce transactions where they are as acceptable as standard Internet transactions?

It seems that recently there has been a noticeable influx of success stories and developments in the mobile payments space.

Indeed, within barely a week of launching its new mobile ordering platform, Domino’s Pizza generated $1 million in revenue and has been touted as a leading example for mobile commerce business strategies.

Based on recent success, the company’s goal of attaining 25 percent of its digital sales from portable devices does not seem that far off.

Similarly, the 2011 holiday season proved to be one of the most successful times in mobile commerce history, showing 18.3 percent of all traffic to online retail sites and 14.4 percent of all sales coming from a mobile device on Christmas Day, up from 8.4 percent traffic and 5.3 percent sales in 2010, according to IBM.

So, does this mean that we have reached a point where mobile payments have become the preferred method for consumers, or at the very least, as standard as card transactions?

Judging by the latest industry statistics from Forrester Research that predict mobile payments will become a $31 billion industry by 2016, it would seem that we are well on the way to ecommerce transactions on a mobile device being a significant revenue channel for retailers across a variety of industries.

For mobile commerce to truly take off, however, the benefits of buying on a mobile device have to outweigh the associated challenges and risks.

Usability issues
One of the biggest barriers to more widespread mobile commerce adoption is usability.

Thirty-nine percent of smartphone shoppers are currently frustrated by the length of the process when purchasing an item via their mobile device, according to our research.

Having too many steps to get to the final payment confirmation may even deter mobile shoppers from completing the transaction.

Similarly, 38 percent were found to be irritated by the amount of information that they needed to provide when making transactions on their smartphone and were frustrated by Web sites that were not yet mobile-friendly or available in app form.

In spite of these usability challenges, however, the community of shoppers willing to embrace mobile devices instead of a desktop or laptop for their purchasing is growing.

In fact, Mobio Identity Systems recently reported that 82 percent of survey respondents see themselves making a mobile payment within the next year.

Of course, if the ease of use for mobile transactions does not improve, this number could dwindle significantly as nearly 29 percent cite speed and simplicity as the most important factor for mobile payments.

Consumer demands for seamless and simple mobile commerce purchases are high because they are already used to easy shopping experiences online.

Therefore, for mobile commerce to truly take off, merchants need to apply the lessons that they have learned in the ecommerce arena and implement them in the mobile world. If merchants can accomplish this, they will be able to more easily tap into an increasingly lucrative channel ahead of their competitors.

Security concerns
In addition to usability concerns, another key, make-it-or-break-it issue for the mobile commerce industry, and top-of-mind for consumers, is security.

In the same Mobio study, security was recently ranked as the most important factor for making a mobile purchase among 73 percent of survey respondents, although an astonishing 94 percent of North Americans said they would have no problem making a mobile payment, if they knew it was secure.

In light of these findings, merchants need to carefully consider the security of their mobile commerce solution against overall usability.

Consumers want to have their cake and eat it too when it comes to payments, having a secure but simple transaction on any device. Merchants, however, are aware that different channels carry different fraud challenges.

The problem here is that traditional industry security methods, including the authentication tools VerifiedByVisa and MasterCard SecureCode, are very difficult to render on most mobile devices.

But, with all of the forecasted growth in the mobile commerce industry, merchants are understandably eager to provide consumers with a seamless transaction.

This catch-22 requires mobile commerce merchants to give more careful consideration to their fraud and security strategies.

Risk-screening tools can help alleviate such concerns by using environmental factors to screen transactions, including elements such as card issuing country, shopper IP address and device ID.

Additionally, companies such as CellPoint and Mobank offer solutions that enable authentication tools for mobile commerce, thereby providing a more secure transaction process on any smartphone and tablet device.

Convenience matters
For consumers, mobile commerce is all about convenience.

Rather than browsing product purchases in the evenings and on weekends, consumers are making buying decisions on the go.

And with the amount of time people spend on the go these days, whether going to and from work or riding public transportation around busy cities, this is a major area for growth.

However, if security concerns remain an issue, mobile commerce industry growth trajectories may be stalled.

As with any retail strategy, consumers lie at the heart of its success.

By combining the latest security strategies with mobile commerce platforms, merchants will have a solution that not only meets consumer desire for a simple process from purchase decision to completed transaction, but

one that will also address security concerns head on.

Designing such solutions from a consumer perspective will generate new, innovative and highly attractive solutions that will result in an increase in both mobile shopping and revenue for merchants across a wide variety of industries.

Gabriel Hopkins is head of ecommerce products at WorldPay, London. Reach him at [email protected].