My Mobile is my Wallet

Posted: September 3, 2011 in Uncategorized

Mobile Commerce refers to wireless electronic commerce through mobiles. M commerce is an alternate payment method which is likely to be widely accepted because of its:

  • Ease of use
  • Trust
  • Usefulness

m-Commerce is a special form of electronic commerce (e-Commerce) that uses wireless communication and mobile devices — such as cell phones, personal digital assistants (PDAs) and tablet PCs. Although a relatively new phenomenon, m-Commerce is already making its mark along with the growing demand for smartphones — first the iPhone, and more recently Android-based mobile devices.

In 2010, global m-Commerce revenues increased 38 percent over 2009 to reach US$25.2 billion, according to ABI Research, a US-based research and analytics firm.109 In Japan, m-Commerce accounts for about 20 percent of e-Commerce, and 50 percent of mobile users regularly make purchases on their phones, according to Nomura, a Tokyo-based investment banking company. In the US, 15 percent of consumers use their cell phones and 20 percent use their PDAs for price discovery and product comparison. In 2011, 10–15 percent of the revenues from retail across France, Germany, the UK and the US are expected to be influenced by mobile applications.

Key Facts:

  • m-Commerce is five times as big as e-Commerce was at a similar stage in its development in early 2000
  • In terms of revenue, Japan is the biggest m-Commerce market in the world
  • The mobile payments industry is proliferating in Latin America, South Asia and Africa, where typically more people have cell phones than bank accounts
  • In emerging economies, especially in Southeast Asia, there are 10 mobile phones for every desktop / laptop. In these markets, mobile phone is the primary means of accessing the internet and engaging in commerce

Increasing Popularity of M-Commerce
The mobile channel continues to expand its role as a connector between traditional, online and other sales channels. Consumers have started using their mobile devices to compare products and offers across multiple stores, find product ratings and reviews, and search for coupons or discounts. In fact, consumers are using their mobile devices more frequently for comparative shopping purposes while standing in a physical store, primarily to check if competitors have better deals to offer.

Increase the reach of banking services
In India the number of mobile phone users is increasing exponentially which has outnumbered persons holding bank accounts.

  • Half of the Indian households do not possess bank account but 42% of these have at least one mobile handset

This provides opportunity to provide basic banking services to people not holding bank accounts. Banks are not able to reach most of these people rather than them being non-bankable. So m-commerce can provide a platform to include these people in financial system.

There are many opportunity provided by mobile revolution in India, and this is taking it to next level. The level of understanding required for m-commerce is obviously more than the basic mobile services. So this step requires investing into providing awareness to people about the technology and any concerns about security.

What are the benefits for consumers/subscribers?
Convenience

  • Access to information, and ability to conduct transactions – anywhere and anytime
  • Self service and control
  • Reminders and alerts

Flexibility

  • Simple user-friendly interface
  • Supports multiple user scenarios
  • Works on all phones
  • Works on all networks
  • Works across SMS and GPRS / Data

Security

  • Unique PIN access; PIN not stored on device
  • Real-time transactions
  • Protection for lost or damaged devices
  • Secure back-up of personal data

What’s in it for Service Providers?

Acquire new customers

  • Extend existing services directly to customers
  • •Offer new services
  • •Offer non-banking services to attract un-banked
  • •Leverage growing number of mobile phone users

Offer new products & Services

  • Offer banking, bill payments, money transfer, insurance, ticketing – events and travel, ads and coupons
  • Offer time and location sensitive non-payment services to drive mobile payments
  • Offer opt-in transaction driven mobile-ads
  • Offer NFC based services for payment as well as non-payment applications

Enhance Customer Relationships

  • Real-time alerts, notifications and transactions
  • Reduce (frustrating) call center interactions

Offer Personalized Solutions

  • Unique tools and utilities enable Providers to offer personalized services and products
  • Platform supports rapid customization and localization of user interface
  • Platform supports development of multiple user-scenarios

Reduce Channel Support & Cost

  • Patent protected, robust and scalable platform interfaces easily with existing host to extend online services to mobile phones
  • Services built to reduce call center costs
  • Platform architecture provides high level of optimization for infrastructure and resources
  • Security architecture enables Providers to extend existing risk management practices to mobile channel
  • Reduce costs related to existing processes, including channel commissions and customer acquisition

Disadvantages of M-Commerce:

The following are disadvantages of using mcommerce:

  1. Mobile devices do not generally offer the graphics or processing power of a PC.
  2. The small screens of mobile devices limit the complexity of applications.
  3. Each network has a differing approach to m-commerce meaning that the international reach and ubiquity of Ecommerce will not be matched
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