M-commerce: an example of
interactive media developments
Gary Akehurst
m-commerce
E-commerce:
“Electronic commerce is an emerging concept that describes the
process of buying, selling, or exchanging products, services and
information via computer networks, including the Internet”.
Turban, King, Lee, Warkentin and Chung, (2002)
M-commerce:
“Mobile commerce is referred to as ‘transactions with monetary value,
conducted using the mobile Internet’. This definition covers business to
business, business to consumer and consumers to consumer
transactions. Mobile commerce is a sub-set of e-commerce in terms of
technical issues. Additionally, m-commerce is not a truncated form of ecommerce but a new, innovative way of conducting time-critical
transactions regardless of location”.
Paavilainen (2002)
m-commerce
E-commerce appears to be moving towards m-commerce
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Fast growth of mobile market generated in part by prepaid contracts
Mobile phones are affordable items of personal equipment
Mobile phones becoming smarter and promise a closer integration of
online activity with other tasks (e.g. Apple iPhone)
Using the web has become an habitual, daily part of life and work for
many people in developed countries
The mobile phone is becoming a Personal Trusted Device (PTD)
enabling secure banking, payment and ticketing transactions
m-commerce
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Seeing mobile phones becoming digital wallets, useful for a wide range
of mobile transactions either remotely, over digital mobile networks or
locally at points of sale such as parking meters
Mobile commerce will be used for buying goods, financial services,
purchasing different types of digital content (e.g. ringing tones,
graphics, music files, picture messages from content providers)
Games, downloadable phone applications, music and video feeds have
ararived
Do not confuse this future m-commerce with the poor WAP format
(Wireless Application Protocol)
Bluetooth wireless technology and other wireless technologies has
revolutionised personal connectivity with various devices and systems
(although Bluetooth currently has a limited 10 to 30 metre range)
m-commerce
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In order to support future m-commerce applications a new
generation network is needed. General Packet Radio
Service (GPRS) will replace today's circuit switching
technology enabling continuous connection to data
networks, information and entertainment services
GPRS enables multimedia messaging, imaging and
browsing and will enable migration to enhanced data for
GSM evolution
The much talked-about 3G networks will enable
convergence of content, Internet and telecommunications,
delivering media rich content (including audio and video)
m-commerce
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The key drivers for mobile commerce service adoption will
be ease of use and security
► Too complex and time-consuming applications and
services will discourage consumers from going mobile
► The challenge is to implement a secure payment system
that is convenient and simple to use
► Winning the trust of consumers will take time given ecommerce security scares from time to time
► Fast wireless internet access hotspots appearing at railway
stations, coffee shops, airports, motorway service stations
and other public places
m-commerce
M-commerce characteristics
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Mobility (based on users carrying a cell phone or mobile device
everywhere they go, so users can initiate a contact with commercial
and other systems whenever they feel a need to do so)
Broad accessibility (people can be reached at any time, breaking
geographic and time barriers)
Ubiquity (availability of smartphones, Blackberrys and personal digital
assistant (PDA) fulfills needs for real-time information and
communication anywhere independent of user’s location)
Convenience (stored data always at hand and increasingly easy to use,
enabling connection to the Internet, intranets and databases)
Localisation of products and services - when a Global Positioning
System (GPS) is attached to a wireless device, precise location
information is known. When the mobile operator knows the user’s
location then localisation of services can be arranged
m-commerce
Privacy is an issue. Phones will soon be able to “sense”
where the user is and offer customised information relevant
to that location (e.g. location of the nearest ATM or fast
food outlet)
► There is potential for misuse of this personal data such as
bombarding users with adverts for their local restaurant
► M-commerce may offer a way of avoiding queue waiting or
carrying cash as well as gaining greater control over
expenditures
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m-commerce
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Consumers want simplicity:
Ring the car parking machine, parking ticket emerges,
£1.80 debited to your mobile bill
What you currently get is:
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Complications, open this account
Register
Remember passwords
Must have a credit card
Multiple key strokes
m-commerce
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Identity management is crucial
Currently we have to remember countless PINs,
passwords, usernames and pass codes
If we can log on to any service using a phone, punching in
the same PIN or thumb print each time, then take-up of
services will increase rapidly
Once authenticated, we could browse services with
operators passing on a standard digital identity (a mobile
passport)
m-commerce
Financial Applications
Stockbroking
► Time sensitive alerts and notifications based on predefined factors such as price movements
► Real-time personalised news headlines
► Instant advisory services
► Portfolio management
► Quote checks
► Buying and selling stock
► Security by SmartTrust technology based on Public Key
Infrastructure using digital signatures
m-commerce
Banking services
► Basic services include the same functions as fixed Internet banking
services
► Advanced services are designed specifically for mobile users offering
location-independent and time sensitive instant messages and
integration with mobile shopping services
► Advanced services
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Automatic balance notification according to predefined limits
Credit line notifications
Downloadable exchange rate calculator
Instant credit agreements
Direct integration between mobile merchants and banking services
m-commerce
Mobile Payment Systems
► Three players – mobile operators, financial institutions and
device manufacturers
► Mobile operators would like to become middlemen
collecting a small cut for providing security and debt
recovery
► Financial institutions see mobile payments as their core
business since they provide credit and payment systems
► Device manufacturers are concerned about the threat of
slow development of payment methods that slows down
demand for mobile phones
m-commerce
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Micro payments (user calls a certain number where per
minute charges equal the cost of the purchased item or call
the number with a prefix)
M-wallet designed to offer single-click payment
mechanisms to wireless application providers, portals and
e-merchants, and they in turn provide for their customers
The m-Wallet stores all a customer’s key information
including PIN (personal identification number), multiple
credit card details and multiple billing and shipping
addresses (at the choice of the customer)
Enables users to make transactions via smart phones
m-commerce
Smart Cards
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Mobile consumers are already using a variety of smart
cards
Used for buying groceries to movie tickets
Easy to securely store information for mobile banking,
transport, health care and corporate network security
Will challenge existing business models especially in
retailing
m-commerce
Shopping
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Mobiles are generally used quickly when additional
information is not needed (suited to impulse buying)
► The transaction must therefore be easy and user friendly
► The time for the shopping process needs to be considered
► What information does the customer need to key in?
► The length of product descriptions and graphics
► Retailers experimenting with secure server storage of
mobile customer details
m-commerce
Advertising
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Around 1.5 billion mobile subscribers worldwide and growing
Enormous opportunities for targeted and personalised one-to-one
advertising
To stop bombardment of offers consumers may be able to specify
preferences for certain product categories, certain stores and brands –
so an offer from a preferred store with preferred product category for
sale has the highest priority
“Peoples” a mobile operator in Hong Kong has launched the mSpot
service that uses location-based advertising in return for subsidising
free calls
Estimated some 37 billion adverts and alerts are sent to European
mobile devices, and 65% of users are prepared to accept these
m-commerce
Individual Consumer Services
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Short message (SMS) and multimedia message services (MMS) –
SMS existed since 1991
News and information - pull applications where the user asks for
information by sending a keyword or message; push applications news
sent to subscribers automatically according to pre-configured settings
Ticketing and reservations – one of the first applications as the
purchasing process is straightforward and only small amounts of
information transferred
Ticketmaster offers sports, concert, theatre and other tickets via a fixed
Internet interface but a wireless service “Local Intelligence” is available
in 32 metropolitan areas short messaging to a variety of mobile
devices. More advanced personalised profiles and reminders have
been introduced. Revenue generated from ticket surcharges,
sponsorship and advertising
m-commerce
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Hotel, restaurant, taxis and car rental – the ability to search for these
services on the move and make reservations
Hotelguide provides a mobile version of Hotelguide.com; through a
mobile device users can search for information of more than 60,000
hotels around the world (users type in hotel preference and city, can
choose links to more information about a hotel such as prices, contact,
location, etc. and can make a reservation by calling)
Bluetooth-enabled mobiles can be instantly recognised when
interacting with the reserved hotel system; after confirming the guest is
properly registered the guest can use a password to open the room
door, checkout, buy from vending machines, mini bars, pay the bill and
get loyalty points
m-commerce
Betting and gambling – time sensitive, suitable for large
target groups
► Participants can offer bets in the middle of sports games
and races but whether networks could handle sudden
increases of demand (say just before a free kick in a
football match) is debateable
► Mobile entertainment
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Ringing tones and icons to customise devices
Mobile music, pay as you listen
Mobile imaging and video
Mobile games
Mobile electronic pets
m-commerce
Telematics
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Wireless data and voice systems for vehicles normally combined with
Global Positioning Systems
Applications include:
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Roadside assistance
Emergency services such as automatic airbag notification
Remote engine diagnostics
Location-based navigation and maps
M-commerce applications such as traffic reports and ticket reservations
Stolen car tracking
Remote door lock and unlock
Concierge services
Services linked to voice recognition technology