Phones are becoming smarter than ever, and so are consumers. Shoppers with phones or devices like the iPhone and iPod Touch that can conveniently and quickly surf the Web are beginning to conduct everyday commerce online. eBay said its mobile app has been downloaded 7 million times and generated over $600 million in sales on eBay in 2009.

While visiting and bidding on eBay with a mobile device is becoming easier than ever, completing a purchase hasn't always been straightforward. Recently, though, mobile payment provider Mpayy released mobile apps for the iPhone and Android platforms that will make such payments practical.

I first interviewed Mpayy founder and CEO Conrad Sheehan in 2008. I caught up with him after another busy holiday season to ask what's new in the field of online payments and about the outlook for 2010.

How popular is eBay with mobile users?

Conrad Sheehan: They are the standout in terms of mobile commerce right now. One of the big problems with eBay was the fact that you had to be at the auction when a sale expired. On the mobile phone, that restriction really opens up.

What other kinds of commerce do you think will attract consumers in the near future?

Conrad Sheehan: We think it will get a beachhead outside of eBay in areas like bill payment. We also like digital content. People are growing comfortable conducting single transactions over the Web for low or average priced items such as tickets to events. Electronic payment of gas and electric bills is especially convenient. If you pay online with a credit cards, the utilities charge you a fee to cover the fees they are charged by the credit card company. With Mpayy you don't have that fee.

Does Mpayy help small business owners as well as consumers?

Conrad Sheehan: We give merchants the ability to do withdrawals from their Mpayy account to their bank account. You can't do that with PayPal. With Mpayy, you can check your sales activity and make withdrawals from the mobile Web. Application-based interfaces like the ones for the Android and iPhone are even faster.

What kinds of digital content can be paid for with mobile devices?

Conrad Sheehan: We separate it into two segments. First, there's digital content that costs the creator a fair amount to create, such as a piece of music, a movie, a newspaper article. These have a short life span and we like them. But we don't cover payments of digital content that costs nothing to create, such as digital poker chips or "digital sushi." Our value is enhanced to a digital content provider when payments are being made to digital intellectual property. A credit card is a pain to use in such situations. Our solution is far more compelling to someone who has a product that isn't free to give away. That's where we're better than other services.

Who is doing the mobile buying right now?

Conrad Sheehan: Younger consumers, from what we can see.

Where is growth going to come in the near future?

Conrad Sheehan: You're not yet seeing physical goods being bought or sold with mobile devices yet, except on eBay. Social games of the sort you see on Facebook, like "Mafia Wars," got traction, and digital poker, and donations to nonprofit organizations also grew.

How can retailers position themselves to be ready for growth in mobile commerce?

Conrad Sheehan: Traditional retailers have got to have an application. They are not inexpensive to build; they will cost no less than $20,000. You also have to have your Web site configured so it works well with the mobile Web. You need a special mobile version. Companies like Usablenet Mobile can help businesses create turnkey mobile Web stores.

In the coming year, Sheehan looks to the installation of the 4G network technology as well as smart phones with better memory and faster processors. While mobile commerce is still just a "trace amount" of overall online commerce activity, he foresees growth in the near future.

"For any business, big or small, a mobile presence creates an opportunity to differentiate yourself from the competition in a new sales channel, and we're a piece of that presence," he says.
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Greg Holden is the author of several books about eBay, including "How to Do Everything with Your eBay Business," second edition, and "Secrets of the eBay Millionaires" (Osborne-McGraw Hill). Find out more on Greg's website, which includes his blog, a list of his books, and a new fictionalized memoir he is publishing online called "So It Goes."