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Mobile Commerce Guide

Mobile Commerce Guide

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Published by Sara Khan

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Published by: Sara Khan on Nov 29, 2011
Copyright:Attribution Non-commercial


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By Rodger Desai

However as this space heats up and adoption increases,
today’s consumers and merchants are increasingly

presented with, and at times bafed, by the variety of

mobile payment and billing options available.

The industry now defnes mobile payments across online

and ofine methods of payment.

For example, online methods of mobile payments are now
allowing consumers to buy an app in an app store, shoes
online, digital weapons for their avatars and transfer
money using just their mobile phone number.

Other ofine mobile payments methods, such as near feld

communication, are also rapidly evolving, with the largest
areas of growth including retail and ticketing.

However, while mobile payment and billing options
abound, the most successful will be those that
reduce transaction abandonment, encourage billing
transparency and accuracy and avoid the need for
operator care.

Barriers to adoption

Security, privacy fears, fraud, slow and failed payment
transactions and billing errors are considered some the
biggest obstacles to consumer and merchant adoption.

A recent report by Mobio Identity Systems cited security
concerns as the largest barrier to market, stating 94
percent of consumers would make a mobile payment if
guaranteed it was secure.

As a result, better education will be needed in order to
establish greater trust, an exercise not too dissimilar to
what the online payments industry underwent years ago.

The mobile payment industry has seen considerable

growth over the last year with global mobile
payments forecasted to increase from $162 billion in
2011 to $984 billion in 2014 (Yankee Group 2010), and the
United States mobile payments market forecasted to reach
$612 billion by 2015 (Aite Group, 2010).

Additionally, while premium SMS has historically served
the industry well, in order to meet today’s growing
demands, a more intelligent mobile payment and
billing system that is more closely integrated with
the wireless carrier’s network assets will be needed to
ensure the same level of security, balances and checks
that consumers and merchants want and have come
to expect.

Best practice

While challenges remain, new developments in the mobile
payments and billing space are making progress.

Key success factors and best practices for the future include:



Payment choice

- Mobile payments adoption and success for operators
and merchants hinders on ofering consumers multiple
payment choices.

To avoid transaction abandonment and ensure greater
conversion rates, the industry will need to provide the same
level of choice that consumers have become accustomed
to at a bricks-and-mortar level.

By ofering fexible mobile payment options such as
subscription, try-before-you-buy, gifting, pay-per-event,
lay-away, freemium and discounting bundles consumers
are more inclined to buy, therefore increasing conversion
rates and merchant revenues.

Intelligent billing

- To avoid abandoned transactions and reduce risks at the
merchant and carrier level, it will be important to ofer

intelligent billing and routing options.

For instance, legacy technologies such as PSMS are unable
to support new content types such as physical goods or
low margin/revenue share goods e.g. digital albums, tracks
or services.

Therefore, it will be important to ofer multiple payment
methods in order to convert sales.

Other important factors to consider include enforcing
regulatory limits, monitoring insufcient pre-paid funds,
instilling merchant location permissions and establishing
over-credit allowance for post-paid subs.

This, in turn, reduces fraud, while ensuring a seamless
user experience.

Transparency and accuracy

- Billing transparency will also play a fundamental role in
the industry’s crusade to instill consumer confdence and
trust in mobile payments.

For instance, when a consumer makes a payment,
it will be necessary to create a more familiar billing
experience, similar to what consumers have become
accustomed to with credit cards, such as seeing the
correct merchant name, detailed item description and
merchant customer care number on a consumer’s mobile
phone bill.

Establishing key authentication measures will also be
critical in ensuring the right transaction is delivered and
billed to the right consumer to eliminate need for carrier
care, chargebacks and merchant refunds.

With the huge growth in consumer virtual goods purchases,
it will be important for carriers and merchants to review
their current mobile payment and billing strategies to
ensure they are not only delivering a seamless, secure,
user-friendly experience, but also ensuring that consumers
are provided with choice and that billing is intelligent,
transparent and accurate.

Rodger Desai is CEO of Payfone, New York. Reach him at



Generating consumer confdence in mobile commerce transactions

By Janet Jaiswal

To capitalize on this exploding market, companies are
experimenting with new features to build out their
mobile commerce channel and drive trafc to both their
ecommerce and physical store.

In the past year, mobile commerce has doubled in vol-

ume and by 2015 consumers in the United States alone
are expected to spend nearly $24 billion annually from
Internet-enabled mobile devices.

Ebay Inc. and Amazon.com Inc. have already sold
billions of dollars of merchandise through their mobile
commerce sites and applications.

Marketers are looking to increase mobile application
revenue through new and innovative methods that include
geolocation-based services and behaviorally-targeted

Additionally, businesses are looking at how they
can transform mobile phones into fnancial
payment platforms.

All of this requires consumer trust and confdence.

Users are understandably nervous about conducting
mcommerce transactions.

A Harris and TRUSTe survey of U.S. adults, for example,
found that a whopping 82 percent are concerned about
privacy or security on mobile devices.

In such a nascent market, retailers need to do as much as
they possibly can to build trust among consumers.

Businesses must build strong security and privacy
protections into their mobile commerce sites and
applications from the very start and – also importantly –
need to promote that protection to consumers.

All other things being equal, when customers feel a
company is taking their security and privacy seriously,
they are less likely to turn to the competition.

The four top consumer concerns for mobile commerce
– and how to address them

Below are the four biggest areas of security concerns
for consumers in regards to mobile commerce, as well
as concrete steps that businesses can take today to
address them.

1. Payment – If you ask for credit card information,
fnd a secure commerce platform provider that
understands mobile commerce and ofers protections,
such as SSL-encrypted transaction support and
alternative payments such as PayPal and Amazon’s
payment system.



Alternative payment systems reduce transactions steps
and help improve the process for small devices that have a
limited screen size. Plus, they give customers the ability to
pay with platforms they already trust.

2. Secure information collection – Only ask for
information that you absolutely need and do not collect
extra information until after you have established a
trusted relationship. Consumers value convenience and
simplicity in mobile commerce so apply this principle to
your information collection practices.

When you collect Personally Identifying Information
(PII) such as credit card numbers, be sure that the data
is encrypted during transmission and remains encrypted
where it is stored, including when it is turned over to
other vendors.

3. Geo-location – A consumer’s geo-location is
considered a gold mine – especially when tied with profle

information – because it allows a retailer to tailor an ofer
so it is more relevant and timely.

However, be sure to ask permission before you collect this
information and explain why you are collecting it.

For many people, sharing their location data is extremely
sensitive, and they will need a good reason to do so, as
well as your assurances that data will be protected.

4. Behavioral-based advertising - Collecting behavior
based information through your mobile site or mobile
application can often enhance the service you provide
to customers.

However, be aware that this information should not be
shared with a third party unless it is used to support the
primary service that you are providing the customer.

If the data is for other third party purposes, make sure
you obtain customers’ permission before you collect
that information.

Mobile commerce is growing and holds a lot of promise
for the retail industry.

Partners such as security and privacy experts can be used
to make sure that you adhere to the highest industry
practices to meet its growing potential.

By addressing security, trust and privacy issues upfront,
businesses can give their mobile commerce channel the
best possible chance for success.

Eighty-fve percent of consumers restrict at least
one type of information when interacting with a
mobile application.

Limit the information you request early on and later
– when you have gained their trust – request a more
detailed profle where you can collect additional
information through incentives such as user discounts and
exclusive perks.

Janet Jaiswal is a senior director of global product
marketing at Tealeaf Techology. Reach her at



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