HANDHELD DEVICES AND COMPUTING AND

PAYMENT METHODS FOR MOBILE COMMERCE

Wen-Chen Hu
Department of
Computer Science
University of North
Dakota
Grand Forks, ND
58202
[email protected]

Jyh-haw Yeh
Department of
Computer Science
Boise State University
Boise, ID 83725
[email protected]

Chung-wei Lee
Department of
Computer Science
and Software
Engineering
Auburn University
Auburn, AL 36830
[email protected]

Abstract
The emergence of wireless and mobile networks has made possible the introduction of
electronic commerce to a new application and research area: mobile commerce.
Understanding or applying mobile commerce is an arduous task because it involves a
wide variety of disciplines and technologies. To facilitate understanding and applying
mobile commerce, this article gives careful study to four major subjects of mobile
commerce: i) mobile commerce systems from a technical perspective, ii) mobile
handheld devices including smart cellular phones and PDAs, iii) handheld computing
including client- and server- side handheld programming, and iv) mobile commerce
payment methods. Each subject will be described in detail and major technologies for the
subject will be given too.

Introduction
With the introduction of the World Wide Web, electronic commerce has revolutionized
traditional commerce and boosted sales and exchanges of merchandise and information.
Mobile commerce is defined as the exchange or buying and selling of commodities,
services, or information on the Internet through the use of mobile handheld devices. In
just a few years, mobile commerce has emerged from nowhere to become the hottest new
trend in business transactions. Despite a weak economy, the future of mobile commerce
is bright according to the latest predictions (Juniper Research Ltd, 2004). However, it
requires a tremendous effort to understand mobile commerce and construct a mobile
commerce application because mobile commerce involves such a wide range of
disciplines and technologies. To lessen the difficulty, this paper gives careful study to
four major subjects of mobile commerce:
Mobile commerce systems: Various system structures for mobile commerce
have been proposed. A typical mobile commerce system generally consists of six
components: i) mobile commerce applications, ii) mobile handheld devices, iii)
mobile middleware, iv) wireless networks, v) wired networks, and vi) host
computers.
Mobile handheld devices: Handheld devices provide the equipment mobile
users need to interact with mobile commerce applications. A mobile handheld
device includes six major components: i) a mobile operating system, ii) a mobile
central processor unit, iii) a microbrowser, iv) input/output devices, v) a memory,
and vi) batteries.
Handheld computing: Handheld computing is the future of computer science
because 650 million smart cellular phones, not including PDAs (personal digital
assistants), will be used by 2006 (InfoTech Trends, 2002). Handheld computing is
the programming for handheld devices and it includes two kinds: client- and serverside handheld programming.
Mobile payment methods: Mobile commerce security is defined as the
technological and managerial procedures applied to mobile commerce to provide
security properties. Among the many issues that arise with mobile commerce
security, mobile payment methods, including macropayments and micropayments,
are probably the most important.

Mobile Commerce Systems

A mobile commerce system is inherently interdisciplinary and could be implemented in
various ways. Figure 1 shows a flowchart of how a user request is processed by a mobile
commerce system.



Figure 1: A flowchart of a user request processed in a mobile commerce system
Figure 2 shows the structure of a mobile commerce system and a typical example of such
a system (Hu, Lee, & Yeh, 2004). The system structure includes six components: i)
mobile applications, ii) mobile handheld devices, iii) mobile middleware, iv) wireless
networks, v) wired networks, and vi) host computers. Related research on mobile
commerce systems can be found in the article by Varshney, Vetter, & Kalakota (2000).
Users

Users

MC applications

User interface

Mobile devices

Internet-enabled PDAs

Mobile middlew are

WAP

Wireless networks

Wireless LAN

Wired netw orks

Wired LAN/WAN

Host computers

Host computers

Web servers

MC application programs

Database servers
Databases
association
bidirectional data/control flow
optional component

Databases

An MC System Structure

A Typical Implemention

2

Figure 2: A mobile commerce system structure

Mobile Commerce Applications

The applications of electronic commerce are already widespread; mobile commerce
applications not only cover these but also include new ones. For example, some tasks
that are not feasible for electronic commerce, such as mobile inventory tracking and
dispatching, are possible for mobile commerce. Table 1 lists some of the major mobile
commerce applications (Sadeh, 2002).
Mobile Category
Commerce

Major Applications
Mobile transactions and payments

Clients
Businesses
Schools and training
centers

Education

Mobile classrooms and labs

Enterprise resource
planning

Resource management

All

Entertainment

Games/images/music/video downloads
and on-line gaming

Entertainment industry

Health care

Accessing and updating patient records

Inventory tracking
and dispatching

Product tracking and dispatching

Traffic

Global positioning, directions, and

traffic advisories

Travel and ticketing

Travel management

Hospitals and nursing

homes
Delivery services and
transportation
Transportation and
auto industries
Travel industry and
ticket sales

Table 1: Major mobile commerce applications

Mobile Middleware
The term middleware refers to the software layer between the operating system and the
distributed applications that interact via the networks. The primary mission of a
middleware layer is to hide the underlying networked environment's complexity by
insulating applications from explicit protocol handling disjoint memories, data
replication, network faults, and parallelism (Geihs, 2001). Mobile middleware translates
requests from mobile stations to a host computer and adapts content from the host to the
mobile station (Saha, Jamtgaard, & Villasenor, 2001).
WAP and i-mode

According to an article in Eurotechnology.com (2000), 60 percent of the worlds wireless

Internet users use i-mode, 39 percent use WAP, and 1 percent use Palm middleware.
Table 3 compares i-mode and WAP, along with details of each.
WAP

i-mode

Developer

WAP Forum

Function

A protocol

Host Language

WML (Wireless Markup

Language)

CHTML (Compact HTML)

WAP Gateway

TCP/IP modifications

Widely adopted and flexible

Highest number of users and easy

to use

Major
Technology
Key Features

NTT DoCoMo
A complete mobile Internet
service

Table 2: Comparisons of two major kinds of mobile middleware

WAP (Wireless Application Protocol). WAP (Open Mobile Alliance

Ltd, n.d.) is an open, global specification that allows users with mobile stations to
easily access and interact with information and services instantly. The most
important technology applied by WAP is probably the WAP Gateway, which
translates requests from the WAP protocol stack to the WWW stack, so they can be
submitted to Web servers.
i-mode. i-mode (NTT-DoCoMo, n.d.) is the full-color, always-on, and packetswitched Internet service for cellular phones offered by NTT DoCoMo. The i-mode
network structure not only provides access to i-mode and i-mode-compatible
contents through the Internet, but also provides access through a dedicated leasedline circuit for added security. Users are charged based on the volume of data
transmitted, rather than the amount of time spent connected.

Wireless and Wired Networks

Network infrastructure provides essential voice and data communication capability for
consumers and vendors in cyberspace. Wireless networking technologies are advancing
at a tremendous pace and each represents a solution for a certain phase, such as 1G, 2G,
and 3G, in a particular geographical area, such as the United States, Europe, or Japan. In
this subsection, we will categorize them from the perspective of radio coverage into three
networks:
Wireless Local Area Network: Devices used in wireless local area
network (WLAN) technologies are light-weight (easy to carry) and flexible in
network configuration. In a one-hop WLAN environment, where an access point
(AP) acting as a router or switch is a part of a wired network, mobile devices connect
directly to the AP through radio channels. Data packets are relayed by the AP to the
other end of a network connection. If no APs are available, mobile devices can form

a wireless ad hoc network among themselves and exchange data packets or perform
business transactions as necessary.
Wireless Metropolitan Area Network: The most important technology
in this category is the cellular wireless network. Cellular system users can conduct
mobile commerce operations through their cellular phones. Under this scenario, a
cellular phone connects directly to the closest base station, where communication is
relayed to the service site through a radio access network (RAN) and other fixed
networks.
Wireless Wide Area Network: In large geographic areas lacking the
infrastructure of wireless cellular networks, satellite systems can be utilized to
provide wireless communication services. Communication through satellites is very
similar to the scenario in cellular systems, apart from the differences in transmission
distance and coverage range.

Wired networks is optional for a mobile commerce system. However, most computers
(servers) usually reside on wired networks such as the Internet, so user requests are
routed to these servers using transport and/or security mechanisms provided by wired
networks.

Host Computers

A host computer processes, produces, and stores all the information for mobile commerce
applications. This component is similar to that used in an electronic commerce system
because the host computers are usually not aware of differences among the targets,
browsers or microbrowsers they serve. It is the application programs that are responsible
for apprehending their clients and responding to them accordingly. Most of the mobile
commerce application programs reside in this component, except for some client-side
programs such as cookies. This component contains three major components:
Web servers: A Web server is a server-side application program that runs on a
host computer and manages the Web pages stored on the Web sites database. There
are many Web server software applications, including public domain software from
NCSA and Apache, and commercial packages from Microsoft, Netscape, and others.
Apache was developed in early 1995 based on code and ideas found in the most
popular HTTP server of the time, NCSA httpd 1.3.
Database servers: A database server manages database access functions, such
as locating the actual record being requested or updating the data in databases. Some
popular databases are Oracle10g, Microsoft Access, and IBM DB2. Other than the
server-side database servers, a growing trend is to provide a mobile database or an
embedded database to a handheld device with a wide range of data-processing
functionality. Some leading embedded-databases are Progress Software databases,
Sybases Anywhere products, and Ardent Softwares DataStage (Ortiz, 2000).
Application Programs and Support Software: Web and database
servers are mandatory for mobile commerce systems; application programs handle
all server-side processing. However, to facilitate mobile commerce applications,
some other support software is needed. For example, various programming
languages, including Perl, Java, Visual Basic, C/C++, etc., and the CGI (Common

Gateway Interface) are necessary to transfer information between Web interfaces and
CGI scripts are necessary.

Mobile Handheld Devices

Mobile users interact with mobile commerce applications by using small wireless
Internet-enabled devices, which come with several aliases such as handhelds, palms,
PDAs, pocket PCs, and smart phones. Mobile handheld devices are small generalpurpose, programmable, battery-powered computers, but they are different from desktop
PCs or notebooks due to the following special features:
Limited network bandwidth,
Small screen/body size, and
Mobility.
Figure 3 shows a typical system structure for handheld devices, which includes the
following six major components: i) a mobile operating system, ii) a mobile central
processing unit, iii) a microbrowser, iv) input/output devices, v) a memory, and vi)
batteries.
Data
Mobile
users

I/O devices

Wireless adapter

Instructions
I/O bus

Mobile CPU

Mobile OS

System
bus

I/O bridge

Memory
bus

Microbrowser

Memory

Batteries

Figure 3: System structure of mobile handheld devices

A typical system structure for handheld devices includes the following six major
components: i) a mobile operating system, ii) a mobile central processing unit, iii) a
microbrowser, iv) input/output devices, v) a memory, and vi) batteries, which will be
detailed in the following sub-sections.

Mobile Operating Systems

Simply adapting desktop operating systems for mobile handheld devices has proved to be
a futile endeavor; an example of this effort is Microsoft Windows CE. A mobile
6

operating system needs a new architecture and different features in order to provide
adequate services for handheld devices. Several mobile operating systems are already
available and each employs a different architecture and implementation. Figure 4 shows
a generalized mobile operating system structure, which can be visualized as a six-layer
stack.
1.

Applications

2.
3.
4.
5.
6.

Graphical user interface (GUI)

Application programming interface (API) framework
Multimedia
Computer kernel

Communication infrastructure
Power management

Security

Real-time kernel

Hardware controller
Figure 4: A generalized mobile operating system structure

Although a wide range of mobile handheld devices are available in the market, the
operating systems, the hub of the devices, are dominated by just three major
organizations. The following two lists show the operating systems used in the top three
brands of smart cellular phones and PDAs in descending order of market share:
Smart cellular phones: Microsoft Smartphone 2002, Palm OS 5, and
Symbian OS 7. (Vaughan-Nichols, 2003)
PDAs (Personal Digital Assistants): Palm OS 5, Microsoft Pocket
PC 2002, and Symbian OS 7. (PCTechGuide, n.d.)
The market share is changing frequently and claims concerning the share vary
enormously. It is almost impossible to predict which will be the ultimate winner in the
battle of mobile operating systems.

Mobile Central Processing Units

The core hardware in mobile handheld devices is the mobile processors, and the
performance and functionality of the devices are largely dependent on the capabilities of
the processors. There used to be several brands available, but recently mobile processors

designed by ARM Ltd. have begun to dominate the market. Handheld devices are
becoming more sophisticated and efficient every day and mobile users are demanding
more functionality from the devices. For example, In-Stat/MDR (2002) predicted that
worldwide mobile Internet access device unit shipments would increase from
approximately 430 million that year to approximately 760 million in 2006. To achieve
this advanced functionality, in addition to the obvious feature, low cost, todays mobile
processors must have the following features: i) high performance, ii) low power
consumption, iii) multimedia capability, and iv) real-time capability.

Microbrowsers
Microbrowsers are a miniaturized version of desktop browsers such as Netscape
Navigatorsand Microsoft Internet Explorers. They provide graphical user interfaces that
enable mobile users to interact with mobile commerce applications. Due to the limited
resources of handheld devices, microbrowsers differ from traditional desktop browsers in
the following ways:
smaller windows,
smaller footprints, and
fewer functions and multimedia features.
Figure 5 shows a typical microbrowser, a Mobile Browser version 7.0 from Openwave
Systems, which includes the following features: compatibility with WAP or i-mode,
multimedia support, color images and animation, and dual network stack, HTTP and
WSP, support (Openwave Systems Inc., n.d.).

Figure 5: Openwave Mobile Browser version 7

Input/Output Devices
Various I/O devices have been adopted by mobile handheld devices. The only major
output device is the screen, whereas there are several popular input devices, including:

Keyboards: There are two kinds of keyboards: built-in keyboards and external,
plug-in keyboards. The problem with the former is that they are too small for touchtyping, whereas the latter suffers from inconvenience. Fabric keyboards that can be
rolled up or folded around the handheld devices are being developed to relieve the
problem of external keyboards.
Touch screens/writing areas with a stylus: A touch screen is a
display that is sensitive to human touch, allowing a user to interact with the
applications by touching pictures or words on the screen, and a stylus is an input
device used to write text or draw lines on a surface as input to a handheld device.

Memory
Desktop PCs or notebooks usually have between 64 to 256 Mbytes of memory available
for users, whereas handheld devices typically have only 4 to 64 Mbytes. PDAs normally
have more storage space than smart cellular phones. The former commonly have 16
Mbytes, and the latter may have a memory size as low as a few Kbytes. Three types of
memory are usually employed by handheld devices: i) random access memory, ii) readonly memory, and iii) flash memory. It is expected that hard disks, which provide much
more storage capacity, will be adopted by handheld devices in the near future. A
comprehensive survey of storage options can be found in Scheible (2002).

Batteries
Rechargeable Lithium Ion batteries are the batteries most commonly used by handheld
devices. The life of this kind of battery is short, generally only a few hours of operating
time. Battery technology will not significantly improve unless and until manufacturers
begin to switch to fuel cells, which is unlikely in the near future. A fuel cell operates like
a battery, but unlike a battery, a fuel cell does not run down or require recharging and
will continue to produce energy in the form of electricity and heat as long as fuel is
supplied. Since the fuel cell relies on chemical energy rather than combustion, emissions
would be much lower than emissions from the cleanest existing fuel combustion
processes.

Handheld Computing
Handheld computing is the future of computer science because 650 million smart cellular
phones, not including PDAs, will be used by 2006. Handheld computing is the
programming for handheld devices and it includes two kinds: client- and server- side
handheld programming.

Client-Side Handheld Programming

9

Client-side handheld programming is to develop embedded applications such as an

address book on handheld devices. Some of the popular mobile environments/languages
for this kind of programming are listed below:
BREW (Binary Runtime Environment for Wireless): It is an opensource on-line application development platform for wireless CDMA (Code Division
Multiple Access) devices from Qualcomm Inc. (n.d.). Because BREW runs in
between the application and the chip operating system software, the application can
use the device's functionality without the developer needing to code to the system
interface or even having to understand wireless applications.
J2ME (Java 2 Platform, Micro Edition): It is a technology
developed by Sun Microsystem that allows programmers to use the Java
programming language and related tools to develop programs for mobile wireless
information devices such as cellular phones and personal digital assistants (Sun
Microsystem, Inc., n.d.). J2ME consists of programming specifications and a special
virtual machine, the K Virtual Machine, that allows a J2ME-encoded program to run
in the mobile device. J2ME consists of two elementsconfigurations and profiles
PalmOS: Palm OS (Palm Source, Inc., n.d.) runs on almost two out of every three
mobile stations. Its popularity can be attributed to its many advantages, such as its
long battery life, support for a wide variety of wireless standards, and the abundant
software available. The plain design of the Palm OS has resulted in a long battery
life, approximately twice that of its rivals. It supports many important wireless
standards, including Bluetooth and 802.11b local wireless and GSM, Mobitex, and
CDMA wide-area wireless networks.
Windows mobile: Microsoft Windows CE, introduced in 1996, was not well
received primarily because of battery-hungry hardware and limited functionality,
possibly due to the way that Windows CE was adapted for mobile stations from
other Microsoft 32-bit desktop operating systems. Microsoft later introduced Pocket
PC (n.d.) and Smartphone (n.d.), which were designed with better service for mobile
users in mind and offers far more computing power than Windows CE.
Symbian: EPOC16 from Psion Software is a 16-bit version of an operating system
that has been available for several years and is embedded in many mobile stations;
EPOC32 is a 32-bit open operating system that supports preemptive multitasking. In
mid-1998, Psion joined forces with Ericsson, Nokia, and Motorola to form a new
joint venture called Symbian OS (2004), with the aim of establishing EPOC as the de
facto operating system for mobile stations.

Server-Side Handheld Programming

Server-side handheld programming is to develop handheld applications such as mobile
Web contents for mobile handheld devices. Many mobile applications such as instant
messaging and emails require the supports of server-side programs. Mobile Web contents
is the most common one of these applications. They are usually implemented by using a
three-tier architecture: i) user interface, ii) functional module, and iii) database

10

management system. Figure 6 shows a generalized system structure of database-driven

mobile Web sites.
Host computer

Mobile
contents
developers

Mobile
applications
design &
implementation:
Host languages
with embedded
SQL
Database design:
E-R modeling or
normalization

Web server
DB application
programs

Web-host
connectivity

WWW
GUI

Database server
Results
Database
implementation:
SQL

Database

Queries

End
users

Figure 6: A generalized system structure of database-driven mobile Web sites

Mobile Commerce Payment Methods

Mobile commerce security is defined as the technological and managerial procedures

applied to mobile commerce to provide security properties. Among the many issues that
arise with mobile commerce security, mobile payment methods are the most important.
They are the methods used to pay for goods or services with a mobile handheld device.

Requirements and Properties

The requirements and properties of secure mobile commerce information and systems are
as follows (Lee, Kou, & Hu, 2004):
Confidentiality: The information and systems must not be disclosed to
unauthorized persons, processes, or devices.
Authentication: Ensures parties that a transaction is not an impostor and is
trusted.
Integrity: The information and systems have not been altered or corrupted by
outside parties.
Authorization: Procedures must be provided to verify that a user can make the
requested purchases.
Availability: An authorized user must have timely, reliable access to
information in order to perform mobile commerce transactions.
Non-repudiation: Ensures a user that the transaction performed by him/her can
not be denied.
The requirements for mobile commerce security are:
1. Confidentiality, authentication, integrity, authorization, availability, and nonrepudiation must be rigorously enforced.
11

2. They should be interoperable for most systems.

3. They should be acceptable by the current or future systems with reduced cost.
4. No mobile commerce transactions are deferred/deterred because of the deployment.
The requirements for mobile payment methods are the same as the ones of mobile
commerce security with an additional item:
5. They should allow content providers to provide affordable, easy-to-use, efficient and
interoperable payment methods to users.

Macropayment and Micropayment Methods

They are usually two kinds of mobile commerce payment methods:
Macropayments: This kind of payments is used by traditional electronic
commerce and they usually involve amounts more than US $10.00. Payments by
credit cards are the most common method for macropayments.
Micropayments: These usually involve amounts less than US $10.00, which are
too small to be economically processed by credit cards. The amounts are usually
charged to users phone bills.
2. Third-party processor
verifying the transaction

1. Mobile user entering

credit-card information

5. Payments between
content provider
and bank

4. Payments
between mobile
user and bank

3. Information
sharing between
third-party
processor and bank

Figure 7: A typical macropayment scenario

A typical macropayment/micropayment scenario is as follows and they are illustrated in
Figures 7 and 8, respectively:
1. A mobile user submits his/her credit-card or personal information to the mobile
content via a handheld device.
2. A third-party processor verifies and authorizes the transaction.
3. The third-party processor routes verification and authorization requests to the card
issuing bank or mobile carrier.
4. The user pays his/her monthly credit-card or phone bill.
5. The bank pays the mobile content provider or the mobile carrier pays the mobile
content provider directly or through a bank after deducting transaction fees.

12

3. Information sharing
between third-party
processor and
mobile carrier

4. Payments between
mobile user and
mobile carrier
5. Payments
between mobile
carrier, bank,
and content
provider

1. Mobile user entering

personal information
to mobile content

2. Third-party
processor verifying
the transaction

Figure 8: A typical micropayment scenario

Conclusions
This section gives conclusions of the four mobile commerce themes discussed in this
article:
1. Mobile commerce systems: A mobile commerce system involves a range of
disciplines and technologies. This level of complexity makes understanding and
constructing a mobile commerce system an arduous task. To facilitate this process,
this chapter divided a mobile commerce system into six components: i) mobile
commerce applications, ii) mobile handheld devices, iii) mobile middleware, iv)
wireless networks, v) wired networks, and vi) host computers.
2. Mobile handheld devices: Mobile handheld devices are one of the core
components of mobile commerce systems, as they are needed for mobile users to
directly interact with mobile commerce applications. Understanding the devices and
knowing their functions and capabilities is vital for the success of mobile commerce
applications. A handheld device relies on a wide range of disciplines and
technologies for its success. To facilitate the understanding, this chapter broke down
the functions of a handheld device into six major components: i) mobile operating
systems, ii) mobile central processing units, iii) microbrowsers, iv) input/output
devices, v) memory, and vi) batteries.
3. Handheld computing: Handheld computing is the programming for handheld
devices and it includes two kinds:
Client-side handheld programming: It is to develop embedded
applications such as an address book on handheld devices.
Server-side handheld programming: It is to develop handheld
applications such as mobile Web contents for mobile handheld devices.
4. Mobile payment methods: Another important issue for mobile commerce is
mobile security and payment. Mobile commerce systems can prosper only if
13

information can be securely exchanged among end systems (consumers and vendors).
Security issues (including payment) include data reliability, integrity, confidentiality,
and authentication and are usually an important part of implementation in wireless
protocols/systems. Solutions are updated frequently, due to the lack of a
comprehensive wireless security infrastructure and standard. A unified approach has
not yet emerged. Among the many themes of mobile commerce security, mobile
payment methods are probably the most important. These consist of the methods
used to pay for goods or services with a mobile handheld device, such as a smart
cellular phone or an Internet-enabled PDA. A typical mobile payment process
includes: i) registration, ii) payment submission, iii) authentication and authorization
by a content provider, and iv) confirmation.

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