M Commerce
By John Karanja, Sat Dec 10th
INTRODUCTION DEFINITION OF M-COMMERCE Mobile commerce stands forelectronic trading of goods and services made through mobiledevices.M-Commerce is the wave of electronic commerce beingbrought about by wireless technology. It is not a new way ofprocessing credit and debit cards this method has been aroundfor a few years, but is just really starting to make a largeimpact on how we do business away from our offices.
TECHNOLOGY BEHIND M-COMMERCE M-Commerce first started with theuse of wireless Point Of Sale swipe terminals and has since thenmade its way into cellular phones and Personal DigitalAssistants. Wireless POS swipe terminals are much more expensivethen regular "wired" terminals which require you to be nearby aphone jack and electrical outlet in order to connect to theonline transaction systems. Mcommerce in the past has mainlybeen used for micropayments that is payments under 10 USdollars. However it has in the recent past been used to handlelarger amonts. This was largely to security fears and thenewness of the technology. In Kenya mcommerce is used fropurchase of ringtones and now recently pay electricity bills.The increase in popularity of PDA's and cellular phones hasresulted in more and more businesses beginning to use m-commerceas a more efficient method of reaching their customers. TYPES OFMCOMMERCE M-commerce should can be divided into three types i.e.premium content, remote payment and point-of-sale applications.Of those, premium content will be the most important, generatingmore than three-fourths of all m-commerce revenues by 2006.
1.Premium content This is where special or expensive content isoffered to the phone subscriber on his phone. It depends a loton the phone technology that is 3g(third generation) or 4g(4thgeneration). 3g phones are available even in Kenya however thereare only a few countries like Japan and South Korea with 4gtechnologies enabled. These services include like video andmusic. Mobile phone companies also offer premium content likestock exchange information.
2.Remote payment This is largely similar to ecommerce on theweb. It basically refers to the online payment of money wherebythe one paying is in a different location from the onereceiving. This is supported in mcommerce through secure paymentconnections.
3.Point-of-sale This refers to commerce in which the mobiledevice is used as a point of sale. This is possible if thedevice can access the online store. These devices are not thetypical mobile devices but are capable of accessing highercontent. They are usually WAP enabled and can access xml andjava components as well.
MANAGEMENT ISSUES AND MCOMMERCE ROLE IN ORGANISATIONS Formanagers mcommerce provides the opportunity for streamliningorganizations operations and increasing revenues at the sametime. This has resulted in top level managers of very many largeorganizations spending considerable effort including time andmoney in investigating the potential of this technology. Forinstance Safaricom has spent millions of Kenya shillings inacquiring state of the art mcommerce enabled technologies andwill hence be able to offer premium services to Safaricom phonesubscribers like stock updates in the near future. There is alarge organization known as the Mobile Content Rights ManagementGroup which consists of Mobile phone manufacturers Intel, mm02,Nokia, Panasonic, RealNetworks, Samsung and Warner Bros. Studioswho have launched a licensing and compliance framework calledContent Management License Administrator (CMLA). Thisorganization has been formed to address necessary businessconcerns and enable the rapid delivery of high-quality digitalcontent to mobile handsets and other devices that deploy whichalso includes mcommerce services as well as broadband servicesUSES OF MCOMMERCE AND CASES OF USE IN KENYA For instance banksand other financial institutions like cooperative bank areexploring the use of M-Commerce to broaden/retain their businessby allowing their customers to not only access accountinformation, e.g. bank balances from anywhere, but also thepossibility to make transactions, e.g. like paying electricitybills and remitting money via mobile phones. This service isoften referred to as Mobile Banking or M-Banking. In westerncountries stock market services are offered via mobile devicesthis has come to be known as Mobile Brokerage. News
informationis also becoming more popular with subscriptions to dailyheadlines from Kenya's daily newspapers such as Nation beingsent to your mobile phone in a service known as get the 411.Safaricom and Kencell also offer Sports and entertainment for 5shillings of your credit Shopping and reservation services arenow more accessible when using mobile devices. Corporations arenow using m-commerce to expand everything from services tomarketing and advertisement. Although there are currently veryfew regulations on the use and abuses of mobile commerce, thiswill change in the next few years. With the increased use ofm-commerce comes increased security. Cell phone companies arenow spending more money to protect their customers and theirinformation from online intrusions and hackers. M-commerce isbeing used for the sale of mobile phone ring-tones andgames.Soon M-Commerce will facilitate the mobile shopping anddownloading of music tracks from your mobile device.Seehttp://www.buyafricanmusic.com.
Advantages of M-Commerce 1.Customers are very easily accesiblesince most mobile phone users walk around with their gadgets.Hence sellers can communicate with the almost immediately. 2.M-Commerce increases customer satisfaction, cost savings,and newbusiness opportunities. 3.M-commerce is available anywhere withrelatively small devices that is mobile phones and PDA's 4.Mobile commerce can be highly personalized and user has controlover data. 5.Enhance customer seller relationships becausecommunication is easier. Limitations of M-Commerce 1.Mobiledevices have lower processing speeds than conventional PC'S 2.Small visual displays limit access to multimedia contents 3.Noreal standards in M-commerce .That is there is a lotdifferentiation in M-commerce solutions offered. GENERAL ISSUESREGARDING M-COMMERCE Security As electronic commerce comes tomobile phones, people will demand more security than the creditcard. But even traditional e-commerce lacks the security tohandle the billions of dollars in transactions made over theInternet. As more and more users access the Internet remotely --away from their own desktop -- their interest in protectingtheir data increases proportionately. Smartcards especiallythose enhanced with biometrics "offer data protection andauthentication for e-shoppers and could serve as the newbackbone for safe electronic transactions. Smart cards, widelyused in Europe and Asia, contain low-cost, low-memorymicroprocessors and are employed in a range of everydaytransactions: prepaid phone calls, ATM banking, and publictransportation. The embedded technology also can be found innational identity cards, driver's licenses, and health insurancecards. While smartcards typically require a password or PIN,proponents of biometrics say the science of measuring physicalcharacteristics to verify a person's identity offers greaterprotection in the e-commerce era. Biometrics include: voicerecognition, iris and face scans, and fingerprint authentication.
AREAS OF POTENTIAL GROWTH AND THE FUTURE FOR M-COMMERCETECHNOLOGIES New Channels of Service Banks are working onmcommerce technologies that will facilitate deposits, payments,transfers and withdrawals. If successful banks will reduceoperational costs drastically and will also be able to increaseefficiency of transaction processing. The travel industry inturn is realizing the possible benefits of m-commerce which willallow customers to schedule, reschedule, plan trips throughtheir mobile devices. Traders in the retail sector will be ableto locate customers more easily and will also be able to providesecure payment methods, perhaps through mobile digitalcertificates or voice recognition. Easier access to customerswill enable these retails to send targeted marketing messagesinforming the customers of newly available products or eveninvoicing customers. Courier Companies will for instance allowcustomers to track the transportation of packages much like itis in FEDEX where one can track a package moving from Nairobi toHong Kong.
References ·Laudon K C, Traver C G: E- Commerce: Business,Technology, Society; Pearson 2004. ·http://www.cellular.co.za/mcommerce.htm viewed on 7th September2005 ·http://en.wikipedia.org/wiki/M-commerce ·www.freecreditcardprocessing.com/html/glossary.html
About the author:John Karanja is a student at Strathmore University BBIT
