M-Commerce

INTRODUCTION
Mobile Commerce is any transaction, involving the transfer of ownership or rights to use goods and
services, which is initiated and/or completed by using mobile access to computer-mediated networks with
the help of an electronic device.
"Mobile Commerce is the use of information technologies and communication technologies for the
purpose of mobile integration of different value chains an business processes, and for the purpose of
management of business relationships.”

M-commerce is a term that is used to refer to the growing practice of conducting financial and
promotional activities with the use of a wireless handheld device. The term m-commerce is short for
mobile commerce, and recognizes that the transactions may be conducted using cell phones, personal
digital assistants and other hand held devices that have operate with Internet access. While still in its
infancy, the concept of m-commerce has been refined in recent years and is beginning to become more
popular.

Mobile Devices
M-commerce is not just about using mobile phones as end user devices. The following list gives an
overview of different kinds of mobile devices.
 Mobile phone
 PDA (Personal Digital Assistant)
 Smart phone-the smart phone combines mobile phone and PDA technology into one device.
 Laptop
 Earpiece (as part of a personal area network)

M-COMMERCE VERSUS E-COMMERCE

In comparison to e-commerce, m-commerce offers both advantages and disadvantages. The following list
summarises the advantages of m-commerce:
¨ Ubiquity: The use of wireless device enables the user to receive information and conduct
transactions anywhere, at anytime.
¨ Accessibility: Mobile device enables the user to be contacted at virtually anytime and place. The user
also has the choice to limit their accessibility to particular persons or times.
¨ Convenience: The portability of the wireless device and its functions from storing data to access to
information or persons.
¨ Localization: The emergence of location-specific based applications will enable the user to receive
relevant information on which to act.
¨ Instant Connectivity (2.5G): Instant connectivity or "always on" is becoming more prevalent will
the emergence of 2.5 G networks, GPRS or EDGE. Users of 2.5 G services will benefit from easier and
faster access to the Internet.
¨ Personalization: The combination of localization and personalization will create a new
channel/business opportunity for reaching and attracting customers. Personalization will take the form of
customized information, meeting the users’ preferences, followed by payment mechanisms that allow for
personal information to be stored, eliminating the need to enter credit card information for each
transaction.
¨ Time Sensitivity – Access to real-time information such as a stock quote that can be acted upon
immediately or a sale at a local boutique.

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¨ Security – depending on the specific end user device, the device offers a certain level of inherent
security.

Limitation of M-Commerce

Despite the fact that the use of M-Commerce is growing rapidly there are still limitation that causes
limited use of M-Commerce:

1. Bandwidth: The limited bandwidth that can be support by mobile devices currently is very small
which causes web developers to reduce the usage of rich data.
2. Screens Size: The screen size of a mobile device is very limited. This also limits the viewing
capacity of the user.
3. Less Powerful Processors: Due to the slow processing speed web developer would have to use
server side scripting which will bring more load to the servers.
4. Cost of Wireless Connection: As wireless connection of a mobile device to the internet is still a
relatively new technology the cost of using such connection is also expensive as the technology is
still under heavy development
5. Additional Security Threats: The communication over the air interface between mobile device
and network introduces additional security threats.
6. Heterogeneous Devices: The heterogeneity of devices, operating systems and network
technologies is a challenge for a uniform end user platform. For this reason, standardization
bodies consisting of telecommunication companies, device manufacturers and value added service
providers integrate their work
7. Mobile devices are more prone to theft and destruction.

Comparison between E-Commerce and M-Commerce

 E-Commerce is believed to have started off in 1994 when the first ever banner appeared on the
internet but electric commerce not using the internet must have originated as far back as the 1970s
when technologies such as Electronic Funds Transfer and Electric Data Interchange were being used.
M-Commerce on the other hand stands for Mobile Commerce and refers to commercial transactions
being conducted over cellular and mobile devices. M-Commerce originated sometime during the
1990s. The methods of payment used are normally calling numbers with premium rates, reduction of
the caller's credit and charging the user's bill.
 M-commerce means using mobile phone with Internet access, while e-commerce needs a laptop or
desktop, but both are performed online.
 The ‘m’ in m-commerce means mobile phone, while the ‘e’ in e-commerce means electronic.
 M-commerce is more portable compared to e-commerce, because mobile phones are easy to carry.

 E-commerce is available to only those places where we have net connectivity, but with m-commerce
we are free from all such boundaries.
 Video conferencing has become possible with m-commerce even in places where there is no internet.

 E-commerce not only needs internet but also electricity whereas there is no such requirement with m-
commerce.

 M-commerce is easier to get to in comparison to e-commerce but at present, using m-commerce is

costlier than using e-commerce.

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 E-commerce uses computer and laptops whereas m-commerce uses wireless mobile devices like
mobile and smart phone.

Areas / Uses of M-Commerce

In the current commerce industry, mobile commerce or M-Commerce has been entered in finance,
services, retails, tele-communication and information technology services. In these sectors, M-Commerce
is not only being widely accepted but also it is being more used as a popular way of business/ commerce.
 Finance Sectors
 Telecommunication Sectors
 Service / Retail sectors
 Information Sector

M-COMMERCE APPLICATIONS
The general m-commerce applications are:
1. Mobile ticketing
Tickets can be sent to mobile phones using a variety of technologies. Users are then able to use their
tickets immediately by presenting their phones at the venue.
Tickets can be booked and cancelled on the mobile with the help of simple application downloads or by
accessing WAP portals of various Travel agents or direct service providers. Mobile ticketing for airports,
ballparks, and train stations, for example, will not only streamline unexpected metropolitan traffic surges,
but also help users remotely secure parking spots (even while in their vehicles) and greatly facilitate mass
surveillance at transport hubs.
2. Mobile vouchers, coupons and loyalty cards
Mobile ticketing technology can also be used for the distribution of vouchers, coupons and loyalty cards.
The voucher, coupon, or loyalty card is represented by a virtual token that is sent to the mobile phone.
Presenting a mobile phone with one of these tokens at the point of sale allows the customer to receive the
same benefits as another customer who has a loyalty card or other paper coupon/voucher. Mobile delivery
enables:
 economy of scale
 quicker and easier delivery
 effective target marketing
 privacy-friendly data mining on consumer behaviour
 environment-friendly and resources-saving efficacy
3. Content purchase and delivery
Currently, mobile content purchase and delivery mainly consists of the sale of ring-tones, wallpapers, and
games for mobile phones. The convergence of mobile phones, mp3 players and video players into a single
device will result in an increase in the purchase and delivery of full-length music tracks and video.
Download speeds, if increased to 4G levels, will make it possible to buy a movie on a mobile device in a
couple of seconds, while on the go.
4. Location-based services
Unlike a home PC, the location of the mobile phone user is an important piece of information used during
mobile commerce transactions. Knowing the location of the user allows for location based services such
as:
 local maps
 local offers
 local weather
 people tracking and monitoring
5. Information services

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A wide variety of information services can be delivered to mobile phone users in much the same way as it
is delivered to PCs. These services include:
 news services
 stock data
 sports results
 financial records
 traffic data and information
Particularly, more customized traffic information, based on users' travel patterns, will be multicast on a
differentiated basis, instead of broadcasting the same news and data to all Users. This type of multicasting
will be suited for more bandwidth-intensive mobile equipment.
6. Mobile Banking
Banks and other financial institutions are exploring the use of mobile commerce to allow their customers
to not only access account information, but also make transactions, e.g. purchasing stocks, remitting
money, via mobile phones and other mobile equipment. This service is often referred to as Mobile
Banking or M-Banking. More negative issues like ID theft, phishing and pharming are lurking when it
comes to mobile banking, particularly done on the mobile web. Net security technology free from
redundancy and paradigm shifts away from mobile web-based banking will be an optimal solution to
mobile banking in the near future.
7. Mobile brokerage
Stock market services offered via mobile devices have also become more popular and are known as
Mobile Brokerage. They allow the subscriber to react to market developments in a timely fashion and
irrespective of their physical location.
8. Auctions
Over the past three years Mobile reverse action solutions have grown in popularity. Unlike traditional
auctions, the reverse auction (or low-bid auction) bills the consumer's phone each time they place a bid.
Many mobile PSMS commerce solutions rely on a one-time purchase or one-time subscription; however,
reverse auctions are high return applications as they allow the consumer to transact over a long period of
time.
9. Mobile purchase
Mobile purchase allows customers to shop online at any time in any location. Customers can browse and
order products while using a cheap, secure payment method. Instead of using paper catalogues, retailers
can send customers a list of products that the customer would be interested in, directly to their mobile
device or consumers can visit a mobile version of a retailer’s ecommerce site. Additionally, retailers will
also be able to track customers at all times and notify them of discounts at local stores that the customer
would be interested in.
10. Mobile marketing and advertising
Mobile marketing is an emerging concept, but the speed with which it's growing its roots is remarkable.
Mobile marketing is highly responsive sort of marketing campaign, especially from brands’ experience
point of view. And almost all brands are getting higher campaign response rates. Corporations are now
using m-commerce to expand everything from services to marketing and advertisement. Although there
are currently very few regulations on the use and abuses of mobile commerce, this will change in the next
few years. With the increased use of m-commerce comes increased security. Cell phone companies are
now spending more money to protect their customers and their information from online intrusions and
hackers.

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