M-Commerce
Mobile Commerce is generally understood to involve an electronic transaction via the use of a mobile phone. In some instances it has been predicted that the mobile phone could actually replace the credit or debit card.
For users, the mobile phone offers convenience, immediacy and personalisation for consumer transactions. At the same time, the number and variety of goods and services available to wireless subscribers is rocketing. From the seller/supplier point of view, m-commerce allows enterprises to expand their market reach, provide better service and reduce costs. Operators are also beating the m-commerce drum. One of the biggest challenges facing operators is the need to maintain and grow Average Revenue per User (ARPU), and m-commerce is seen as having considerable potential in this context.
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Micro-Payment Systems and their Application to Mobile Networks
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In many developing countries, particularly in rural areas, access to financial services is limited resulting in a large percentage of the population operating on a cash only basis and outside of the formal banking system. However, the proliferation of mobile services in these countries has created a unique platform to provide financial services over the mobile network. In light of the growing size of international and national banking remittances, there is a great opportunity to capitalise on the benefits of such a system...
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Examples of m-commerce services in popular use today include mobile parking meter payments and the purchase of ringtones. Such services are known as 'micropayments'; transactions with an average value of under $10. Whilst m-commerce applications can also include the purchase of various high value items, growth in the near future is expected to come from compelling digital content and services, most of which is expected to be valued at under $10.
Other m-commerce services include financial applications such as m-banking. This service enables users to check their bank account details and pay bills. Such services have been especially popular in the Phillippines, where the conventional banking system is arguably not as well developed as other regions of the world.
Indeed, a recent report from the GSMA, in partnership with infoDev and the International Finance Corporation and focused on the use of mobile for micropayments in the Philippines, found that mobile-enabled commerce services can address a major gap in developing countries that is critical to their social and economic development. For more information please click here.
A variety of m-commerce payment processes are possible, and there are differing views on which is the best method. For premium rate SMS-based services and postpay customers, the charge can be added to the user's monthly mobile phone bill. Alternatively, charging can be against a credit or debit card, and there have also been trials of re-chargeable 'e-wallet' devices.
Of course, the issue of security is of critical importance, and the subject of many technical and standardisation initiatives. One example is the 'Trusted Mobile Platform' from NTT DoCoMo, IBM and Intel, which aims to make m-commerce services such as electronic tickets and e-wallets for online purchases more secure, and help protect against viruses and other software attacks. Another approach to making m-commerce more secure is to use biometrics, involving, for example, the integration of signature verification into mobile phones. This allows the capture of not only static but also dynamic parameters of signatures such as the speed of writing, pressure applied, letter shape and the rhythm of the writing process.
According to a recent study from Juniper Research, the global m-commerce market will be a US$88 billion industry by 2009. Juniper believes that digital goods such as mobile entertainment - ringtones, games, wallpaper, gambling etc - will continue to be the largest application for buying and selling via the mobile phone, but that ticket purchases will also emerge as a major application area by 2007, and make up over 44% of the $88 billion global m-commerce market.
Such growth is likely to be driven by the fact that there are now more mobile phones in use than wireline PCs, as well as the availability of 3GSM services with faster access speeds and more transaction-friendly terminals. |
