Back 10 years or so, when Mercator Advisory Group was designing its first CustomerMonitor Survey Series consumer payments survey questionnaires, one question of interest to our clients was “How many apps are people willing to put on their phones?” Now, that question seems dated considering the explosion in inventory on the phone manufacturers’ app stores and the app offerings from nearly all merchant types. But that contrast makes a point—merchant apps have become both universal and essential to merchants’ relationships with their customers. And merchants’ focus on apps is due to their customers’ seemingly boundless embrace of smartphones and apps.

Today, the key questions regarding apps are more about quality than quantity since apps are now ubiquitous. The question is whether a merchant can sustainably differentiate its app for competitive advantage. Another question is where payments capabilities fit into the mix: Is their role to seamlessly enable the sale via the customer’s chosen method of payment, or can more strategic objectives (namely cost) be addressed by embedded payment capabilities? These are issues examined in this report. Apps today are well developed and support merchants’ relationships with their best customers. Loyalty programs are their centerpiece, and they define the main avenues for merchants to differentiate their apps.

The merchant app ecosystem is very well developed and continues to add user capabilities in impressive fashion. One conclusion is unavoidable: This maturing ecosystem is far from being the “Wild West,” but it is deadly serious.

The Mercator Advisory Group research report, Merchant Mobile Apps: Much More Than Payments, highlights key differentiating factors within merchant mobile app landscape.