Until now, TopGuest's business model involved awarding points (e.g. hotel points and other travel rewards) for checking in at one of the company's 15,000 partner places, mainly hotels and airports. But TopGuest Apex will reward users with points for checking in to their favorite local businesses.

Hilton HHonors points for going to the gym and Starbucks? Exactly.

TopGuest: Get Travel Rewards Points for Your Check-Ins

To use TopGuest, you just connect the service with your account on Facebook, Foursquare or Gowalla, all of which allow users to "check-in" (register their location) at a venue. You can also announce your location by posting a geo-tagged photo using the iPhone app Instagram or posting a location-tagged tweet to Twitter.

The genius of the system is its simplicity - beyond the initial setup, which also involves associating your current travel rewards programs with your TopGuest account, there's nothing more to do. You don't have to use a separate app, you don't have to use hashtags on Twitter or follow a particular account, you don't have to "like" anything on Facebook...you don't have to do much of anything, really, besides sharing your location using your preferred service, whether Facebook, Foursquare, Gowalla, Twitter or Instagram.

TopGuest Apex: A Loyalty Program for Local Merchants

The new program, TopGuest Apex, now doles out those same loyalty points to users who visit their favorite local merchants, instead of just hotels and airports as before. For each check-in, points are awarded and automatically deposited in a user's account. For example, as a new Apex member, I'm now receiving 50 HHonors points every time I buy diapers at Babies R Us, go for a run at my local gym or do my grocery shopping. (Yes, I'm boring.) Your top check-in spots, of course, would vary.

The end result is a completely personalized rewards program for each user. And unlike with Groupon, there's nothing for merchants to do - the points come from TopGuest's partnerships and integrations with many of the largest loyalty points programs in the world, with a reach of now 170 million program members.

The Groupon Model is Not for Everyone

"Driving loyalty is a huge pain-point for local merchants," says Lewis, noting that many startups are now trying to offer small to medium-sized merchants similar programs. One such startup, Punchd, makers of a digital version of customer loyalty punch cards (buy 10, get 1 free, e.g.) was just acquired by Google this past week. Others, like FiveStarCard and Perkville are still operating independently.

But the problem with these programs is that mom-and-pop shops often don't see the value in loyalty programs until after they see the results, which takes time. That's one reason why Groupon has an edge - businesses get immediate results, as a herd of discount shoppers descend on their business. But there has been much debate about how many of those Groupon-wielding customers will ever return to the business afterwards. In fact, a study released in June found that less than 15% of customers came back a second time after the Groupon was over. That's even lower than the findings reported last October in The Wall St. Journal, which cited Groupon's own research pointing to 22% of users becoming repeat customers.

Private Beta Invites

TopGuest Apex has just launched into a private beta, with Hilton HHonors as the only participating loyalty program for now, but the company is in talks with other partners, who are "excited" about the service. Over time, TopGuest will grow beyond just travel rewards, to sign deals with other types of merchants, like restaurants, shops and banks.

With the wealth of social data the company has on its members from their social networking connections, a future iteration of Apex may allow paying merchants more customization options, like the ability to precisely target more influential customers, encourage new behavior patterns and more. Other features are planned, too, which Lewis can't talk much about, only saying that it's a much bigger vision they have for Apex than what we see today.

Want to tryTopGuest Apex? Send a tweet to @topguest to be added to the invite list.

Some of the biggest gaps between customer demand and the current offerings included the following:

• 23% of consumers download a branded shopping application, 50% plan to do it the future, but only 12% of retailers offer one.
• 54% of consumers want barcodes and smart tags in magazines to link to store catalogs or websites, but only 12% of retailers offer this feature, too.
• 62% of consumers want to shop using mobile apps or websites, but only 32% of retailers offer this option.
• 38% of consumers want to check product availability using their mobile phone, and 52% expect to do it in the future, but only 29% of retailers provide this option now.
• 51% of consumers want to add items to their carts via mobile phones and then complete the transaction later using a PC or tablet, but only 23% of retailers allow this now.

It's interesting to compare these shortcomings with additional data from Forrester's latest Mobile Commerce Forecast, which found that only 2% of retailers' Web sales will come from mobile devices in 2011. Mobile commerce, says the research firm's analyst Suchartia Mulpuru, will remain a small portion of a retailers' business. Although mobile commerce is expected to grown 40% each year for the next 5 years, it will only reach 7% of Web sales penetration by 2016, she notes.

This is due to a number of factors, explains Mulpuru, one being that tablets (which Forrester doesn't include in its definition of mobile) are preferred over smartphones for online commerce because of their larger screens. Also, shopping as an activity has never been one of the more popular Web behaviors, always ranking below things like "reading news" or "using social networks." Finally, consumers often use the Web and mobiles to do product research or compare prices, but complete transactions in a physical store.

That doesn't mean that mobile has no role to play in the mobile commerce revolution, however. Mobile commerce will "transform retail," Mulpuru says, because it empowers customers and makes pricing much more transparent. Big box stores will be forced to become much better merchants, Mulpuru concludes, "or die."

When making a purchase on the Web, this new system offers a click-to-purchase functionality that does away with the long, tedious form filling currently necessary on the websites belonging to online merchants. Instead, a username and password will be all that's required to complete a purchase. Offline at retailers' locations, the mobile wallet will support the use of promo codes sent via SMS, barcode scanning and NFC technology, the latter which allows a customer to pay with a wave of their phone instead of with a swipe of a plastic card.

Visa introduced the magnetic stripe over 30 years ago, but now, that technology's time is coming to an end. There is a global movement underway involving the digitization of cash and checks, explains Jennifer Schulz, Head of Global Product Strategy Innovation & eCommerce at Visa. This mobile-driven force of change has come about due to the widespread ubiquity of mobile devices, and it has impacted the way merchants and retailers interact with each other.

While the mobile stripe has allowed for a convenience that consumers now take for granted, we now have the technology to replace it with something even better: a digital wallet.

The system that Visa is launching, includes three key pieces: an e-commerce offering, an m-commerce offering and an offline piece for point-of-sale transactions.

Online Shopping Revolution: No More Forms to Fill

Online shopping, whether done via a desktop computer or a mobile phone, will see the most radical impact in the short term. Currently, consumers wishing to make online purchases have to fill out long forms at each retailer's website in order to complete their transaction. In addition to filling out name and address (both billing and shipping), they also need to fill in their credit card number, expiration date and their card security code.

No longer will that be necessary.

In Visa's new system, the customer replicates their wallet online during a one-time setup and can then simply use a username and password to complete their transactions. The benefit to the consumer, obviously, is ease-of-use, but for the merchant, the benefit (besides these easier transactions for customers, of course) is that they'll no longer have to store customers' credit card information on their own servers. With Visa's digital wallet, the company is offering a global "card-on-file" system which retailers can tap into, leaving much of the security up to Visa.

What's NFC & How Will It Be Used at POS?

Offline, at the point-of-sale, the platform will take advantage of NFC technology. NFC, short for near field wireless communication, allows users to tap or wave their phone at an NFC-enabled terminal in order to pay for a transaction. NFC is now being built into modern smartphones including Google's Nexus S, Samsung's Galaxy II, Nokia's Astound and the BlackBerry Bold 9900/9930 devices, among others. Visa also offers cases and SD cards for non-NFC phones, in order to offer backwards compatibility to older devices. While still an emerging technology, it's expected that NFC will ultimately play a large role in the future of commerce.

Currently, there are 150,000 retailers in the U.S. with readers that accept NFC transactions, including big names like McDonald's, CVS and Foot Locker, to name a few. These readers, in some cases, may be branded as supporting Visa's PayWave, but any contactless reader will accept these sorts of tap-to-pay transactions thanks to the global standard agreed upon by the payments industry.

While the penetration of a large number of NFC terminals is still 3 to 5 years away, says Schulz, the environment is ramping up to embrace the technology more fully.

In the meantime, non-NFC equipped merchants can instead use Visa's platform to send promotions to customers via SMS technology, email or barcoded mobile coupons, which could then be shown to the merchant at the point-of-sale, or even printed out, if necessary. A recent example of this system launched in April in partnership with clothing retailer The Gap. The store offers real-time, location-based discounts to customers over SMS. The system knows when a customer is out shopping and where, thanks to the real-time processing capabilities of Visa's payment network. Those consumers are then sent an over-the-air mobile coupon for use at The Gap via text message.

Schulz, in describing the platform, wanted to make it clear that this sort of technology is opt-in only. "The consumer is at the center of the product," she explained. "They have to opt-in to any rewards, discounts, offers or other value-added features a merchant offers."

But Visa's digital wallet goes even further than that in its consumer-focused capabilities. Users can also access online controls that allow them to configure which cards are used for different types of transactions. For example, everyday purchases could be set to use your debit card by default, but travel-related purchases, like buying online airline tickets or paying hotel bills, for example, could be automatically configured to use your credit card.

Banks On Board

Financial institutions can also use the wallet to dole out rewards points and other offers to consumers as well. At present, Visa announced that it's working with the following financial institutions and organizations, with more to come: Barclaycard U.S., BB&T, Card Services for Credit Unions, ICBA Bancard, First Financial Bank of Ohio, Nordstrom fsb, Pentagon Federal Credit Union, PNC Bank, PSCU Financial Services, Regions Bank, Royal Bank of Canada, Scotiabank, TD Bank Group (U.S. and Canada) and U.S. Bank.

We also know that Visa was trialing its NFC-based PayWave service with Chase, Wells Fargo and Bank of America, too, so we would not be surprised to find those institutions on the list in the near future.

Launch Time Frame

The digital wallet platform will launch in the U.S. and Canada first, in fall 2011. It will then expand elsewhere in the world in the coming months. Also an important aspect to Visa's global ambitions is addressing the needs of emerging markets. Visa will work with financial institutions to serve the banked, under-banked and "bankless" customers in those regions. Here, a scaled-down version of the digital wallet will be present, allowing for transactions over SMS or through applications used on the SIM card, as made available through partners.

On modern smartphones, all the major mobile operating systems will be supported. "If consumers are using it, we'll make it available to them," Schulz says. On these platforms, mobile transactions, NFC and even digital, mobile coupons will be available.

There has been much talk about digital wallets and, specifically, mobile wallets in recent days, with everyone from Google to Apple and even the mobile operators themselves having been pegged as being involved in building a consumer-facing platform, in some form or another. Visa, however, will be one of the first to actually launch a system to end users, from what we know as of today. That, plus their brand name recognition and the openness of the platform itself, may give them the advantage in the race to become your mobile wallet of choice.

Like Square, the new solution allows you to physically swipe credit cards while processing the transaction over an Internet-connected iPhone. But isn't toting around a physical plastic card soon going to be a thing of the past? Maybe, as makers of other new mobile payment solutions, including "contactless" technology and money-transfer apps, would have you believe. Then again, maybe not.

The Intuit solution offers a flat rate of $12.95 a month, plus 1.7-3.7% of each transaction and an additional $.30-$.40 per transaction fee. Square, on the other hand, will charge 2.75% plus a $.15-per-transaction fee. Intuit's biggest selling point, however, is its lack of long-term contracts.

NFC: Now Available, via a Sticker

Although what Intuit is offering is a brand-name and accessible solution for many small business owners, it may or may not be the next big revolution in mobile payment technology. At least, that's what another startup called Bling Nation hopes.

This company has partnered with another big name: PayPal, to push its "Bling Tag," an NFC-enabled sticker that can be stuck to the back of any mobile phone. (NFC, or "near field communication," is a short-range high frequency wireless communication technology which enables the exchange of data between devices over about a 4-inch distance.) In this case, the Bling Tag replaces a credit card, and to use it, you only have to tap your phone onto the merchant's "Blinger." The name sounds a little hokey to us, but the idea is solid.

The Blinger is provided to companies for free upon sign up, and set up is simple: You just plug it into an electrical outlet. Also, no integration with a POS system is required.

Processing costs vary depending on the volume of business a company does, but Bling Nation claims merchants could save up to 50% in processing fees, as compared with the large payment processors. Payments are tied to your account at a financial institution, and now, optionally at PayPal. The money is instantly debited from the associated account at the time of purchase.

Unfortunately, the Bling Tags are only available from financial institutions, which have to first sign up to support this technology. That alone will limit adoption, as will the fact that few merchants actually support the thing.

Other NFC News: Apple's Plans and Visa's Case

That may change in time, however, especially if Apple builds NFC tech into its next iPhone, as a new hire by the company - Benjamin Vigier, an expert in the field - seems to suggest.

Plus, the startup Bling Nation is only one example of companies looking towards an NFC-enabled future. This summer, Visa is beginning trials of its contactless payment technology, payWave, integrated into a special protective iPhone case, developed in partnership with DeviceFidelity. Using NFC on the back-end, consumers could simply wave their iPhone in front of a terminal. For what it's worth, the system is already catching on in Canada.

(For more on NFC, see: "NFC: Never Mind Credit Cards, Pay With Your Phone")

Mobile Payment Services, Apps

Then again, it's possible that neither NFC nor hardware attachments represent the future of mobile payments: it could be, simply, an app.

Last fall, we looked at several m-Commerce solutions, including Boku, Zong, Obopay, MasterCard's MoneySend and Nokia Money, to name a few. They aren't household names, at least here in the U.S., for several reasons, including limited availability, issues with usability and small user bases.

Even though big names like Amazon and Google are jumping into the mobile payments game, as well, (the former with a service for in-app and mobile website purchases and the latter with an even geekier solution - a combination of a browser extension and QR code) the technology hasn't yet truly caught on for brick-and-mortar merchant-to-consumer transactions.

Consumer Reports Warns of Mobile Payment Issues

Meanwhile, the respected organization Consumer Reports - the same group whose decision to "not recommend" the iPhone 4 due to antenna issues forced Apple to finally fess up and offer free bumpers - has recently warned consumers of mobile payment dangers.

With what seems to be a dire warning, Consumer Reports issued a press release: "Mobile Payment Systems Could Leave Consumers at Risk." At the crux of the problem with these new technologies, the report claims, are the varying protections for bank errors and unauthorized use. Debit cards only provide protections for bank errors and unauthorized use, not disputes with the merchant. The same goes for transactions where money is automatically deducted from a bank account. And payment services provided by mobile carriers might escape consumer protections entirely, unless a contract specifically provides them.

"Consumers should not be expected to figure out what protections apply to each competing new payments venture," said Michelle Jun, staff attorney for Consumers Union, the nonprofit publisher of Consumer Reports. "Now that mobile payment ventures are emerging in the U.S., it's time to harmonize and extend consumer protections for all payment services."

Ironically, this news release's intention is actually to push mobile payment companies to get up to speed with their credit card-swiping counterparts. (Consumers Union called on them to include "full consumer rights provided under existing federal law for both debit and credit cards," it reads. And to provide "true voluntary 'zero liability' assurance for consumers without loopholes.")

But sadly, in an age of headline-only journalism, the news will likely be taken in a more negative light. (As it will by those who have only skimmed this article, reading the section titles, sigh).

Who Will Win?

NFC has seen some success in parts of Europe and Asia, and mobile payments are par for the course in many parts of Africa, where access to banks is limited. But at the end of the day, it's too soon to know how well (or if) these technologies will take off in this part of the world, namely North America, and specifically, the U.S.

One disadvantage many startups have entering this space is brand-name recognition, or rather, the lack thereof. In Intuit's trials, for example, many customers trusted the product because they had heard of the company before. Faced with "Bling" stickers and apps that sound like games ("Boku," "Zong"), there may be adoption issues until there's a brand-name partnership underway.

Like the popular Internet retailer Woot (just bought by Amazon), the app provides deeply discounted items, available in limited quantities for a limited time. At 12 p.m. Eastern (GMT - 4:00) every day, a new deal is posted to the mobile app, offering "door-buster" type savings of 50% or more on brand-name products from a network of over 28,000 merchants.

Some of the past "OO's" (overwhelming offers), as they're called, have included deals like $100 off flights booked via Priceline.com, $50 off anything at TigerDirect.com, $25 off Target merchandise, $100 off Wal-Mart merchandise, $75 off the Barnes & Noble eBook Reader, $50 off digital cameras at Staples, $100 off a Nintendo Wii from Kmart and much more.

How to Play... err... Shop

There's a game-like element to scoring these deals, too. They launch at a given time and sell out fast - sometimes even in seconds, so you have to be quick to win the chance to purchase these items. To get a heads up about what deal is launching when, shoppers can sign up for email alerts that are sent out several hours prior to the OO start time and detail pricing, quantities available and other descriptive info about the product.

And if you're worried that you still might find a better deal by shopping around online, the app has you covered here, too. Instead of purchasing the item immediately from your mobile, you simply "reserve" the item. Of course, to do so, you have to link a MasterCard credit, debit or prepaid card to your account first. You then have up to three days to redeem your reservation.

One important item to note, and a big difference between Woot and this app, is that the discounts you receive are not immediate. Instead, they're provided to you as rebates posted to your MasterCard account. You will actually have to buy the item at full price then wait, usually around two weeks, before the credit is posted. At most, according to the FAQ, this process may take up to 21 days.

MasterCard and M-Commerce

MasterCard seems intent on tapping into the growing m-commerce trend, potentially a $2.2 billion dollar industry by the end of this year according to ABI Research. The Marketplace app is just one of many the company has launched for the device in recent months. It also has MoneySend, a person-to-person mobile payments application, Easy Savings Program, an app that locates nearby discounts from participating merchants, Priceless Picks, an app that lets shoppers share great deals with each other anywhere around the world and an ATM finder application. Unfortunately for Android users, the only app MasterCard has ported to that platform is its one-off app, "Flavours of Shanghai 2010," designed specifically for EXPO 2010.

Researching products is still the most popular shopping-related activity on the smartphones. According to Compete's survey, 41% of iPhone users and 43% of Android owners check sale prices while they are shopping. Surely, the popularity of mobile apps like ShopSavvy and RedLaser - which make checking prices as easy as scanning a barcode - will only drive these numbers up in the coming months.

The second most popular shopping-related activity for smartphone owners is finding consumer reviews. 39% of iPhone users and 31% of Android users use their devices for this.

Big-Ticket Items

Only 9% of iPhone users and 11% of Android users said that they would buy big-ticket items over $500 from their phone. In general, the majority of smartphone owners are most likely to buy lower-priced items under $10.

In part 1 of this article, we looked at m-commerce's struggles in relation to other mobile markets like mobile ads and video while also discussing some of the issues mobile retailers face today. But another aspect to m-commerce's growth (or lack thereof) is the issue of mobile payment providers. Only recently have we begun to see some changes in this space - at least in developed markets like the U.S. With the recent launch of several new mobile payment services, consumers should soon become more comfortable and open to the idea of using their phones to make purchases.

Interestingly enough, the "comfort factor" in using a mobile to make a purchase is more of a problem here in the developed world. In developing markets, however, where critical infrastructure like bank branches and high-speed internet is often lacking, people use mobile phones for all sorts of things including mobile banking, mobile money transfer, mobile education, and mobile medicine.

For example, one of the more successful mobile phone money-transfer services is M-PESA, a branchless banking service which has seen success in Kenya, Tanzania, and Afghanistan. Then in Sri Lanka, parts of Africa, and other low-GDP regions a company called Amdocs even helps mobile users to spend their minutes like currency.

Closer to home, the recent partnership between mobile service provides Fundamo and Clickatell may help to bring additional mobile banking initiatives to more advanced mobile markets. Like the U.S., Fundamo's technology is currently used in one third of all mobile banking deployments globally while the U.S.-based Clickatell works with institutions like First National Bank, Standard Bank, MoneyGram, Capitec, Nedbank, Moneybookers, New Heights Microfinance Bank, and others.

Getting Comfortable Paying with Our Phones

One key component to m-commerce's potential success is establishing a comfort factor among consumers when it comes to paying for things with mobile phones. Facebook's role in helping to mainstream this trend should not be overlooked. The company has begun testing mobile payments via a partnership with Zong which would allow users to purchase Facebook credits via their cell phones. Although not in effect yet, once the "flip is switched" so to speak, there will immediately be a large potential customer base for using mobile payment technology. And because it's Facebook, there will be a certain level of trust in the technology. (Yes, we know that's odd given Facebook's numerous privacy stumbles in the past, but overall, the mainstream population won't likely be all that wary.) In addition to the Zong/Facebook partnership, a mobile payment service called Boku has already launched within Facebook and in other social networks, too.

Other mobile payment initiatives introduced this year include MasterCard's launch of their MoneySend™ technology and Nokia's launch of Nokia Money, both being mobile money transfer services. MasterCard is working with Obopay, to deliver their person-to-person payment technology to U.S. consumers. Even though this is not a service intended for mobile retail use, its availability will help to further solidify the concept of using mobile phones as payment devices among consumers.

Obopay, as it turns out, is also the company powering Nokia's new service. With Nokia Money, users will be able to send money to other mobile users via their phone as well as pay for services, pay utility bills and refill prepaid SIM cards. Unfortunately, the company is launching the service in Asia and Africa next year, but has not said if or when it will arrive in other markets like the U.S.

According to David Schwartz, Sr. Director, Product & Global Marketing at Obopay, partnerships like these are only the beginning of what's about to become a major trend. "While some think that mobile commerce is still in its infancy, the market is actually growing at impressive rates," he says. "Gartner estimates by the end of 2009, there will be 74.4 million people using mobile devices to purchase goods and services worldwide, and predicts that number will double by the end of 2012 globally. Since our inception four years ago, Obopay has helped a countless number of people stay connected from sending money to a child in college across the country, to splitting a bill - it's proven to be both easy and secure."

Consumer Experience Matters

With these upcoming mobile payment services, it won't just be availability that matters. Also important is making sure the services themselves work as advertised while still simple enough for use by the average mobile phone owner. Bryce Marshall, Director of Strategic Services at direct digital marketing firm Knotice, agrees. "The future for m-commerce is bright but there are challenges, he says. "For m-commerce to reach its full potential, both the consumer experience and the transaction process must be improved."

For the consumer experience to excel, companies need not only to develop mobile payment applications but develop standards as well. That's why this year Visa Inc. partnered with GSMA, a mobile communications industry group representing hundreds of operators worldwide to develop standards for mobile money management. They've deepened their investment in mobile payments in other areas too, including making a minority equity investment in Monitise plc, a U.K. mobile payment firm, and also teamed up with NeuStar to accelerate worldwide mobile adoption.

Availability + Usability + Large Userbase = Adoption

With all these mobile payment initiatives launching from brand-name companies like Facebook, MasterCard, and Visa, it's only a matter of time before consumers reach enough of a comfort level with mobile payment technology to make an impact on the m-commerce industry. By integrating mobile payments into mobile applications, similar to how Apple does now via their in-game purchases, paying via mobile will eventually become second nature.

But for now, it seems that we're still on the cusp of what could be the next big mobile trend and are just waiting to see it take off. For m-commerce to succeed in the developed world, we'll need to see more retailers making their move into this space as well as new technology that lets people pay with their mobile phones. We're only seeing baby steps being taken at the monment, but with the growth of the smartphone market (in the U.S., up 47% in Q2 of this year), there will soon be so many mobile users online that it will become impossible to ignore them any longer.

With these levels of growth, we're also seeing related mobile services getting a boost. App stores, both phone-based and carrier-based, are popping up left and right, mobile video usage is booming, and mobile ad markets are seeing dramatic growth, too. However, there's one area that hasn't yet benefitted from the mobile revolution: mobile e-commerce.

The indicators of increased mobile web usage are everywhere. Just this week, we heard Facebook reporting their mobile growth had tripled from December of last year to this past month, for example. And then there's AT&T, the carrier for Apple's iPhone, which is seeing so much data usage that they couldn't even keep up, having to delay the introduction of new iPhone capabilities like MMS messaging until they were ready to handle the demand.

Mobile Ads Doing Well

Mobile-dependent markets are doing well, too, at least for the most part. A recent Gartner report states that mobile ad spending will grow 74% this year worldwide to $914.5 million. But the real growth won't happen until 2011 when advertisers are expected to fully embrace the shift to mobile. By 2013, the firm expects the mobile ad market to surpass $13 billion with the Asia-Pacific region in the lead, followed by North America and Europe. Not only is the rise of the smartphone to thank for this trend, so is the rise in flat-rate data plans which make it easier for more consumers to afford mobile web connectivity. As more consumers go online, more web publishers begin to cater to their needs with mobile-ready versions of their websites. This, in turn, "is lifting mobile web access among non-smartphone users," notes Gartner analyst Andrew Frank.

Mobile Video on the Rise

Along with basic web surfing, mobile users are also finding entertainment via their handhelds, specifically in the form of mobile video. According to Nielsen's latest three-screen report, the number of people watching mobile video increased 70% from last year. Nielsen, which specifically tracks American media habits, says this increase to 15 million viewers represents the largest annual growth to date.

M-Commerce Struggles

However, not all mobile-dependent markets are doing well. Mobile e-commerce, for example, is struggling. Despite the massive numbers of mobile users, those using their phones to make purchases are still few and far between...at least here in the U.S. According to new data from eMarketer, more than 70 million U.S. mobile phone users will access the internet from their devices this year, but the m-commerce market remains immature. In an April 2009 survey by RIS News, privacy and security concerns are still at the forefront of both shoppers' and retailers' minds. This had led companies to drag their feet when it comes to introducing their mobile commerce plans. Says Jeffrey Grau, eMarketer senior analyst, "most retailers are either standing on the sidelines or in the midst of planning their mobile commerce strategy."

Another major problem is the lack of standardization in the mobile space. With the number of platforms now available, retailers find building a plethora of mobile applications not worth the effort. As InfoWorld recently noted, the smartphone market has become a "tower of Babel for developers." This means that mobile retailers have to carefully pick-and-choose the platforms they plan to support in order to see reasonable returns on their investments in this space. Despite the slow growth, it appears that m-commerce could be successful if only there were enough mobile apps and shopping opportunities out there.

Already, mobile payments firm Billing Revolution found that on-the-go consumers seem happy to purchase small ticket items like pizza and movie tickets, for example.

And a March 2009 PriceGrabber.com survey found that early m-commerce adopters were even buying up higher priced items like consumer electronics, apparel and jewelry.

In other words, when it comes to m-commerce, "if you build it, they will come." , or so it seems. However, developing m-commerce applications is only one part of the equation. For mobile e-commerce to be successful, we'll need to adopt a number of mobile payment platforms too.

For the much-sought-after and elusive 18-24 year old segment of the market, mobile advertising has promise. In fact, according to data from a BIGresearch study, it's twice as effective among younger consumers with 14.2% of 18 to 24 year-olds saying that mobile video influenced them and 15.9% saying text messaging did.

Those number also show that text messaging isn't the only way to reach consumers via their phone. Today's phones keep advancing and many of them have become more like a little computer in our pocket...or even a TV in our pocket. Because of this, marketers' now have the ability to tap into mobile TV services like Verizon's VCAST or Sprint TV, for example (Both are U.S. services).

Beyond The Small Screen

But mobile advertising doesn't exist in a vacuum. Verizon's strategy is to use mobile ads as part of the bigger picture - something they call their "three screen" approach. Since Verizon offers mobile data services, digital FIOS TV services, and high-speed internet, the mobile device "can be used to enhance or activate other types of media," says Stephanie Bauer, who leads mobile advertising at Verizon Wireless.

As for AT&T, Jordan Berman, executive director of media innovation for AT&T Mobility is looking at a strategy that includes "mobile display ads, a direct-response element such as a bar code or text shortcode, and some form of branded content or utility, whether an m-commerce site, coupon or a contest, to which consumers are driven."

Those mobile ads may help drive real-world sales, like Verizon's three-screened promotional effort, the Burger King "Whopper Freakout" campaign, created by Crispin Porter + Bogusky. Another company offering mobile ads is the mobile coupon service, Cellfire, who offers both downloadable apps and a mobile web site  for accessing deals from your mobile phone.

Effects on M-Commerce

However, mobile ads could also help the m-commerce trend, too. Earlier this month, we looked at some ways that m-commerce was taking off and discovered that nearly half (49%) of mobile data users said they expected to participate in mobile commerce in the future.

Despite the growth, it's still obvious that the perfect formula for marrying mobile ads and mobile shopping hasn't been perfected yet, as many marketers seem to still be experimenting with various methods and gauging their effectiveness.

Photo Credits: enV courtesy of nesster