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How To Use In-App Payments To Boost Customer Engagement

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The Scorching Growth of Mobile Commerce

Mobile commerce is becoming the fastest growing area in e-commerce, with sales projected to exceed USD 3.5 trillion (or 3 trillion Euros) in 2021. This is nearly three-quarters of all global e-commerce sales!

Recent research shows that users spend 90% of their smartphone usage time on mobiles apps. Mobile app users spend nearly 19x more time per month shopping as compared to website users. Globally, the time spent by consumers on mobile apps has increased by 49% since the beginning of the pandemic, leading to an increase in in-app purchases. A recent report released by Liftoff, in partnership with global data analytics company App Annie and native mobile app platform Poq, shows a 30% increase in in-app purchases from Jan 2021 to May 2021.

With such incredible numbers, it seems inevitable that mobile apps will drive most e-commerce sales in the future. And what this means for every e-commerce merchant is that in-app payments have to be an integral part of your payments strategy.

How can In-app payments help your business?

Mobile commerce can be of two types – in-app and mobile website shopping. Consumers globally prefer to shop through mobile apps over mobile websites, as the experience is much better. In fact, data from App Annie show that smartphone users spend 7x more time in native apps than in browsers.

Improves Conversion Rates

Mobile apps encourage users to shop online by being more engaging. Research from Criteo shows that mobile apps increase conversion rates 3x when compared to mobile websites. Apps save user data which enables a faster and smoother checkout. Mobile websites can have a clunky user experience, which leads to cart abandonment.

Improves Retention Rates

Mobile apps give you 2x the new user retention power than mobile websites. Hence, they are a critical tool to build brand loyalty. Apps offer a superior user experience, compared to mobile websites such as:

How do In-app Payments Work?


Your mobile app can accept online payments in two ways, depending on what you are selling. You can use:
1. App Store methods for Virtual Goods
If you sell virtual goods such as subscriptions, freemium features, or offer digital products within a game or access to game content, you have to use the In-App Billing API for iOS and Android. The In-App Billing API enables users to pay in-app through their Apple or Gmail accounts. Both Apple and Google do not allow the use of third-party payment gateways for such purchases.

2. Payment Gateway for Physical Goods
If you sell physical products and services, or digital content that may be consumed outside the app, you should use a third-party mobile payment gateway. Using a mobile SDK, you can connect your app to an existing in-app payment solution that will securely conduct all payment transactions.

In-app payments use tokenization, which replaces sensitive customer payment data with a token. This token works in the same manner as an actual card number and allows you to avoid storing sensitive data.

How to integrate in-app payments into your business?

You can integrate in-app payments by using a mobile software development kit (SDK) from a third-party payment provider. Payment service providers usually have their own SDKs, and they also provide detailed documentation to help you integrate the payment gateway with your mobile app. When you use the SDK of an existing payment gateway, the service provider is responsible for the operation security of the transactions. Thus, you do not have to worry about getting a PCI DSS certificate since your service provider will take care of it.

Some of the things you have to keep in mind are as follows:

How can a payment service provider help?

As an e-commerce merchant, you have to make in-app shopping more enjoyable, secure, and hassle-free for your customers. Look at easy-to-use payment platforms that are secure and easily integrate with apps and social media channels.

Speak with an international payment service provider with proven expertise across markets in Europe to help you set up in-app payments. They will offer you the necessary tools and documentation and help you with easy integration and customization. Working closely with your service provider will help you get the best out of your in-app payments and keep your customers engaged in the long term.

Final Thoughts

Mobile commerce and in-app purchases will continue to define the future of e-commerce in a post-pandemic world. As consumer preferences move deeper into mobile, e-commerce businesses and developers will tap even more into in-app purchases and payments to boost sales and drive engagement with their customers. In this landscape, in-app payments can be the perfect tool to keep your business competitive.

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