M-Commerce
Mobile Commerce is an electronic transaction via the use of a mobile phone.
M-commerce allows enterprises to expand their market reach, provide better service and reduce costs.
For users, the benefits include convenience, immediacy and personalisation of each transaction.
Examples of m-commerce services today include mobile parking meter payments and the purchase of ringtones and games. Such services are known as 'micropayments': transactions with an average value of under $10.
Whilst m-commerce applications can also include the purchase of high value items, growth in the near future is expected to come from digital content and services, most of which is expected to be valued under $10.
M-banking
Other m-commerce services include financial applications such as m-banking. This enables users to check their bank account details and pay bills. Such services have been especially popular in the Philippines, where the conventional banking system is arguably not as well developed as other regions of the world. (To read a GSMA report on this, click here.)
Payment processes
A variety of m-commerce payment processes are possible. 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.
Transaction security
Of course, the issue of security is critical, 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 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.
Opportunities for operators
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.
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.
