/ Technology

What the hell is mCommerce and do we even want it?

Smartphone and money

mCommerce, or buying, selling and banking on your mobile, is growing in popularity. Surprisingly lots of you seem to be up for it – but would you be worried about making payments on your smartphone?

mCommerce is a rather ugly phrase that’s been bandied about recently, and if we’re to believe what’s been said, then it’s going to take the world by storm. Our new research suggests it’s something we want, but what exactly is it?

eCommerce has been with us for some time, and broadly describes any buying and selling that takes place online. Amazon (1994) and eBay (1995) sprang up from nowhere to become coffee table names, but it also surprised me to learn that Thomson Holidays had been trading online since 1981.

With the incessant rise of smartphones, more of us are starting to make payments on our handsets – this new branch of eCommerce has been dubbed mCommerce. Catchy.

It’s already out there

Orange and Barclays recently teamed up to create an NFC (near field communication) mobile phone that can be used as a ‘tap and pay’ device for high street shopping – much like the London Underground’s Oyster Card. But while this might have the highest profile, there are other services out there.

Go to Oasis’ website and you’ll be able buy a gift voucher, which is sent to the recipient by text. They’ll be given a code which they can then enter into the fashion retailer’s chip and pin device for redemption. Other services include an app from Pizza Express that lets you pay your bill on your smartphone, and you’ll be able to pay for parking with a service called RingGo.

So we thought we’d asked Which? members about mCommerce, and the results were perhaps surprisingly positive. In our survey of 1,350 Which? members, 30% expressed an interest in the use of such payments and 24% wanted to find out more about mobile phone banking.

mCommerce Which? infographic (click to enlarge)
The results of our mCommerce survey of Which? members (click image to enlarge)

However, mobile banking is a topic that’s often clouded by security concerns, with commenter William sharing his anxieties about ‘tap and pay’ on a previous Conversation:

‘How many of you lot know of at least one person who has lost or broken or had their mobile stolen? I for one have zero faith that banks will be able to handle security correctly.’

The technology analyst Gartner has predicted that, by 2014, 12% of all eCommerce will be conducted on a mobile phone, or a mobile wallet, as they’re beginning to be known. Bad news, perhaps, for commenter Dieseltaylor, who describes contactless payments as a ‘disaster waiting to happen’.

What are we waiting for?

For me using my smartphone to pay is a no-brainer. I’d rather make payments over my phone than carry lots of cash or have to increase my vigilance when entering my PIN at the check-out.

If my phone is lost or stolen I can easily cancel any existing mobile payment services – much like I’d have to if my wallet was pinched. Furthermore, many of the services are capped with a maximum spend, so the potential loss is smaller.

But what about you – will you sign up to mCommerce opportunities when they arise, or are you concerned by paying for things with your mobile?


no chance, I have enough bugs in my Android phone as it is and I certainly don’t trust google with my financial information.

Oooh, yes please! I think the fact that it’s on my mobile will make it much easier to cancel than if I lost my wallet. If all my details were in one place and I could instantly cancel all of my cards, that’d make me feel more secure, as long as the phone had reasonably decent security in the first place.

I actually get very annoyed when I have to use cash for anything significant now, as my online banking is so efficient. I owed a friend some money, and he kept forgetting to give me his bank details, so I ended up having to manually retrieve the money from a cash machine – it was like being in the stone age =)

In all seriousness, I would love an app that allows me to type in a password, select a bank account (and an amount of money) and then ping it to someone else. If I can do it just by touching their phone with mine, all the better.

I think in order for it to work really smoothly though it needs to have a universal gateway – i.e. you shouldn’t have to download a separate app for Pizza Express, another for Nando’s, etc – that would be ridiculous. I’d happily download an app with all my favourite restaurants on it, then pay by clicking a button rather than having to wait for a waiter/waitress to bring me the bill.

This has all of the characteristics of a solution looking for a problem.

If we are talking about pocket money changing hands, then adding a NFC to existing credit/debit cards would be fine. If we are talking about real bills, then the current system (chip and pin) works perfectly well. Good to know that Nikki (above) is happy to pay bills unseen. I assume she is not telepathic so knows the amount she is about be charged from some other source. I like to look at restaurant bills as the staff are busy and sometimes make mistakes.

Oh Nikki, I’ve got a few million 3D TV’s that don’t seem to be selling well, interested, or do you already have yours.

Hi MrBeck, it’s not about paying bills ‘unseen’ – the idea with the restaurant app is that the waitress/waiter brings your bill when they bring your food. You then pay it at any point you like – you don’t just wave your phone in the air and they take whatever money they want to.

I can see why people are worried about security, but in all honesty nothing is completely secure – I’d much rather have all of my accounts manageable from my phone – I could then instantly access them and check my balance anywhere (meaning that if there has been dodgy activity I’m likely to spot it sooner) and on instant lockdown if my phone gets stolen.

It sounds like you’re implying that any kind of mobile app payment system will allow the vendor to simply charge an amount of money straight to your phone, the equivalent of opening your wallet and allowing vendors to take out whatever money they want – that would clearly be a ridiculous situation. What would actually happen with any of these apps is that the customer will see how much they are going to be charged, approve the amount, and then either swipe their phone, click a button on an app (and type in a password), etc. Very much like using credit cards, only you wouldn’t have to carry all the cards round with you, and have different cards for different purposes.

There are a few things wrong here,

1. There is no “reply” option on the comment
2. for the specific restaurant example, I’m unlikely to know if I want nothing/pudding/cheese/coffee at the time the food is delivered, so you are introducing additional transactions if you pay at collection (so to speak)

taking the reply in order,
3.”you don’t just wave your phone in the air “, the NFC folks are suggesting exactly what you have describe, place the phone close to the reader and it takes the money, just like an Oyster card.
4. “my accounts manageable from my phone”, access and management are not the same as authorising payment. There is no reason that you could not have a app (as they say) or even use a browser, to manage any on-line account. In fact with my bank I could pay the restaurant bill by a transfer of money to their account, but the point is I would never do that on my phone (unless the circumstances were dire).
5. “I could then instantly access them and check my balance anywhere “, don’t confuse what the bank does and what the phone does, real-time updating of the account is a function of the processing capability of the account not the device used to access the account. If banks and credit card issuers were required to provide a real-time update to your account you would have this function. If you depended on the phone to do this you would have an incomplete record as, at least in my case, many transactions are automatic or do not involve me (payments, recurring debits, …).
6. “instant lockdown”, who does the locking down and how do you cause it to happen? I have a single number to call to stop all cards, unless of course they steal both my cards and my phone, a smaller chance for men than women (handbag) but still possible.
7. “allowing vendors to take out whatever money they want”, this exactly describes the NFC “wallet” concept. There is a max limit but if it becomes mandatory (or even semi-mandatory like the Oyster) then the vendor sets the max by their pricing. “Want to ride the train? Then place your wallet here.” At least with the Oyster I know who can take the money.
8. “Very much like using credit cards”, except I can no longer hand the card to a daughter and say use this for money today. I am unlikely to have US and French “apps” for those cards I carry (unless this is an international standard like the credit card). (BTW, how will all those tourists in London pay?)
9. “you wouldn’t have to carry all the cards round with you, and have different cards for different purposes”, I like having different cards for different purposes. I have GBP, EUR and USD cards, this means I don’t pay the banks tons of money to change currency, I pay an FX company a reasonable transfer rate to pay off the non-GBP cards. I have a GBP card with a max of £300 to use on the internet for shopping at less well known sites. There is nothing wrong with having different cards for different purposes. I don’t, but many people do, have cards that allow them to participate in loyalty schemes.

Why all the push to get cards? The card issuers love the idea. It gives them to opportunity to drop the regulatory guaranties about usage that require them to refund money charged on a stolen card, stop making and delivering cards and place more of the processing burden on the customer and seller.

Nikki, I have no objection with you replacing your cards with your phone but I would not want to for the reasons given, please don’t encourage the issuers, this is not in the interest of the general public.

Hi Beck,

I think you might have misunderstood me – I’m not advocating that this system takes over from all other possible payment options – I’m just saying that as an option I like it, and it is definitely something I would use.

Any worries you have about security, amounts of money, etc are fine and completely valid, but what I am saying is that if the apps are designed properly and I have the chance to look at how secure they are, then I think they’re a good idea and I’ll use them. A lot of these security issues were raised when people started using credit cards, but now almost everyone has a credit/debit card of some sort that uses chip and pin.

It’s all about choice, as you so rightly point out. I hate having lots of different cards, as it’s annoying and means I have to carry them all around with me. If all my cards (including things like clubcards, etc) could be loaded onto my phone, it’d negate the need for a wallet. I like that. It’s not for everyone, so I would never advocate that it became compulsory, but it is definitely for me. I also suspect that as it gains traction, eventually the majority of people will choose to use it.

Your banking vs payment app points – I’m not assuming it’s the same system. But what I am saying is that easy access to my money, either via a banking app or a payment app, would make my life much easier.

‘Waving phones in the air’ – yes, I know that NFC works by waving your phone over a payment point, but not crucially before the vendor has told you how much it costs. A vendor could no more take more money from you than you’ve authorised than an Oyster Card reader could clean out your card – it’s technically possible, but there would be avenues of redress.

Finally, the ‘reply’ button thing – I thoroughly agree, and I think Patrick and Hannah are working on it =)

xopher says:
11 August 2011

At one time, lasers were said to be a solution looking for a problem!

Barry Tucker says:
9 August 2011

Don’t even think about it!

Mobile phones are notoriously vulnerable to malware and manufacturers are not taking the threat seriously. Anyone thinking about using their phone in this way should read this Guardian article first :


Oh no not something else to have to worry about. Give it all a rest, I’m still struggling with the self checkouts!

Never! People need to be aware of the ease at which personal info and emails can be intercepted on public wi-fi from their phone let alone their bank account. And with the current levels of credit card fraud doesn’t sound too bright an idea. Above all, can not see a need for it.

James Harrison says:
10 August 2011

I quite agree with all the doubters as I am currently using my ’emergency phone’ as I legitimately downloaded a ‘viral app.’ from Nokia’s OVI site and now have a very expensive problem waiting to be sorted out by much arguing and stress. In an ideal world, we would just need a barcode tattooed onto our skin (yes, like the stories!) and we could exist without plastic or cheques or cash. The sad reality is that there are criminals who want to take our money also. If it is absolutely foolproof, then I’m all for it. As yet, it isn’t.

David W says:
11 August 2011

No. I recently ‘killed’ my mobile while abroad by getting it just a little damp. That brought home the potential folly of relying on it for payments. Also, I wouldn’t use an untrusted connection for mobile banking on a PC, so why would I with my mobile?

David W – One of the most common reasons for mobile phones failing is because they get damp or wet. Some manufacturers include a moisture detector so that they can decline to repair phones that have got wet for any reason. It seems that it would be better to devote their energies into designing phones that are water resistant, like some cameras and car keys that include electronic circuitry.

Mobile phones are incredibly useful toys but security, design and reliablilty all need to be improved before they are fit for financial transactions and other serious purposes.

Andrew N says:
11 August 2011

Under no circumstances, never, not ever. For all the blindingly obvious reasons.

More ways to pay can only make it easier for people. And in the event of an unauthorised transaction – caused by any potential flaw in the system, which seems to be a concern of many commentators – you are entitled to get your money back from the card provider, so long as you’ve not acted carelessly or negligently.