E-Commerce Unit-7: M-Commerce

Mobile Commerce or M-Commerce or M-Business

Mobility is one of the key factors which help business thrive. Businesses that grip the idea of
Mobile Information Society will reinvent themselves as real-time organizations, where access
and interaction can be instant.
A wireless business is one that involves exchanging Internet contents with a network of mobile
people via wireless devices. Businesses can substantially benefit from anywhere and have
anytime access to information and services with the use of mobile phones. Tightening
competition, globalization and changes in customer behavior present new challenges to many
service organizations. Combined with advances in technology, they have put several industries
into round-the-clock operations. Financial institutions are no exception. Their distribution
systems and customer interfaces have gone through major changes. By innovatively combining
mobile technology with other distribution channels, financial services providers can establish
closer, more profitable, and more stable customer relationships.
For financial services providers, the mobile phone has introduced a new channel to reach
customers–one that is personal, easy-to-use, secure, location and time independent. Bank
branches are becoming increasingly expensive to operate, and the established self-service
solutions, such as ATMs and Internet banking, cannot provide competitive efficiency or satisfy
the needs of the new generation of customers who want to do business when it is most
convenient for them.

Growth of Mobile Commerce

M-commerce (mobile commerce) is the buying and selling of goods and services through
wireless handheld devices such as cellular telephone and mobile phones. Known as next-
generation e-commerce, m-commerce enables users to access the Internet without needing to
find a place to plug in. The emerging technology behind m-commerce, which is based on the
Wireless Application Protocol (WAP), has made far greater pace in Europe, where mobile
devices equipped with Web-ready micro-browsers are much more common than in the United
States.
As content delivery over wireless devices becomes faster, more secure, and scalable, there is
wide assumption that m-commerce will surpass wireline e-commerce as the method of choice
for digital commerce transactions. The industries affected by m-commerce include:
• Financial services, which includes mobile banking (when customers use their
handheld devices to access their accounts and pay their bills) as well as brokerage
services, in which stock quotes can be displayed and trading conducted from the same
handheld device
• Telecommunications, in which service changes, bill payment and account reviews can
all be conducted from the same handheld device
• Service/retail, as consumers are given the ability to place and pay for orders on-the-
fly
• Information services, which include the delivery of financial news, sports figures and
traffic updates to a single mobile device
IBM and other companies are experimenting with speech recognition software as a way to
ensure security for m-commerce transactions. Hence, we can say that m-commerce is
becoming the next big thing.
Followings are the reasons why mobile commerce is growing at such a pace:
1) Exponential growth of consumer interest and adoption of the Internet and e-commerce.
2) Tremendous growth in mobile telephony; however, voice has become a commodity and
will no longer fuel revenue growth for operators.
3) Development of real-time transfer of data over 2.5G and 3G networks will enable faster
data transmission and ‘always-on’ connectivity.

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E-Commerce Unit-7: M-Commerce

4) The evolution of the handheld devices incorporating WAP and now GPRS.
5) Cost of entry into mobile e-commerce is low for most entrants; for example, a bank can
implement a sophisticated m-banking solution in under six months for around $1 million.
6) The unique features of the mobile device such as its compactness for convenience and
personalized functions; subsequently, people have become quite attached to their devices.

Wireless Devices
Wireless technology turns e-business into m-business, or mobile business. First generation
(1G) wireless technology was the cellular phone. Second generation (2G) wireless technology,
which includes digital cellular phones, is currently in use worldwide. Third generation (3G)
technology will enable wireless devices to send and receive data as much as seven times faster
than a standard 56K modem. Every wireless device runs a wireless application. A wireless
application is software that runs on a wireless device that exchanges content over a wireless
network. The actual wireless applications are distinguished from one another based on the
wireless devices, networks and application families, which can be summarized as:
• Web phones. The most common device is the Internet-ready cellular phone, which we
call a Web phone. With Web phones, you can exchange short messages, access the Web
with a microbrowser, and run personal service applications. Most Web phones work only
when they have a network connection. Newer advanced Web phones can run
applications.
• Wireless handhelds. Another common device, the wireless handheld, such as a Palm, can
also message and use a microbrowser. The industrial handhelds, such as Symbol or Psion,
can perform very complex operations such as completing orders and taking customer
signatures. They have the advantage of working offline.
• Two-way pagers. A device used often in business is the pager. The most popular is the
two-way pager because it lets you receive and send a message as well as use a
microbrowser.
• Voice portals. A recent innovation is the voice portal, which lets you have a conversation
with an information service by using a kind of telephone or mobile phone.
• Communicating appliances. Such electronic devices are fitted with wireless technology
that can participate in the Internet. Examples include wireless cameras, watches, radios,
pens, and many other devices.
• Web PCs. The standard Internet-connected personal computer is still used as an access
method to mobile accounts, wirelessly or otherwise.

Technologies for Mobile Commerce

Mobile commerce (m-commerce) is built on several key technologies. Some are very well
established, others are much newer and less common. Mobile phones in the UK have gone
through a number of changes in the standards that they use:
First-generation (1G) or analogue phones - good for voice calls.
Second-generation (2G) phones – use digital technology and are typical of the average phone
in use today.
2.5G digital phones - support the transmission of data using general packet radio service
(GPRS).
Third generation (3G) digital phones - support voice and data transmission at greatly
increased speeds.
3G supports services that are not possible with earlier technologies:
• Video calls can be made and received from other 3G users
• Video and other types of media can be downloaded to play on your phone

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• 3G phones often have cameras, so you can take and transmit digital pictures
• Location-based services can be accessed in order to see a map of where you are, or
find out the nearest garage, restaurant, bank, etc.

M-commerce developments are focused very strongly on the use of 3G phone technology.
Wireless Spectrum: All wireless communications signals travel over the air via radio
frequency, aka spectrum. The TV broadcast you watch, the radio program you listen to, the
GPS device that helps get you where you're going, and the wireless phone service you use to
make phone calls and check Facebook from your smartphone -- all use invisible airwaves to
transmit bits of data through the air.
Wireless Application Protocol (WAP): It builds on digital phone technology and allows users
to access information instantly. WAP enables mobile devices to browse the Internet because
the web browsers built into these devices support hypertext markup language (HTML) and
extensible markup language (XML) - the key languages used for internet content.
WAP-enabled devices run microbrowsers. These are applications that suit the small memory
size of handheld devices and the low-bandwidth constraints of a wireless-handheld network.
SMS: Another important m-commerce technology is short message service (SMS), or
"texting". This popular service allows short text messages to be sent from and to mobile
devices at low cost. This has a wide application in m-commerce technology.
Bluetooth: A wireless technology that provides short-range, high-speed voice and data
communication between digital devices. It is conceived by Ericsson in 1994. It provides up to 1
Mbps (megabits per second) of data transfer capability between devices as much as 30 feet
apart. It can also be used to create wireless offices.
General Packet Radio Service (GPRS) is a new packet-based technology that has been
introduced on many GSM (Global System for Mobile Communication) and CDMA (Code
Division Multiple Access) mobile networks from the year 2000 onwards. It is an exciting new
technology because it is immediate (there is no dial-up connection), relatively fast, and
supports virtual connectivity, allowing relevant information to be sent from the network as and
when it is generated.

Benefits of Mobile Commerce

Mobile commerce gives several advantages. If you’re thinking of going mobile or creating an
application for your business, this might interest you:
1. Major accessibility. Thanks to the use of mobile phones users will be able not only to
connect to the online store 24h, but they will also be able to do it from anywhere. This way
the possibility of making sales will increase considerably.
2. Easy purchase process. This innovative process makes it easier for consumers the task of
purchasing products, since the applications designed for mobile phones are simpler and
shows the consumer the specific information of the product he/she needs to buy.
3. Instant updating of the information. Thanks to the use of mobile phones, the user can be
contacted in whichever moment, the user being able to receive and read instantly the new
update sent by the company, without the necessity of being connected to a PC or laptop.
This way transactions are speeded up and a lot of time is saved.

Applications of M-Commerce
Nowadays brands and agencies are constantly developing mobile applications to keep up with
technologically-savvy consumers. Nevertheless, very few companies have really firmed up and
included the necessary characteristics to have consumers coming back.

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A lot of marketers developed mobile applications for a wide variety of platforms including
iOS, Android and Windows Phone. Mobile applications are an amazing way for marketers to
increase sales for their products or services and create an everlasting relationship with clients.
Some applications of m-commerce include:
Mobile money transfer: In Kenya, money transfer is mainly done through the use of
mobile phones. In Hungary, Vodafone allows cash or bank card payments of monthly
phone bills.
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 mobile phone at
the ticket check as a digital boarding pass. Most number of users are now moving
towards this technology. Best example would be IRCTC where ticket comes as SMS to
users.
Location-based services: The location of the mobile phone user is an important piece of
information used during mobile commerce or m-commerce transactions. Knowing the
location of the user allows for location-based services such as local weather, tracking and
monitoring of people, etc.
Information services: 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,
sports scores, financial records, traffic reporting, emergency services, etc.
Mobile banking: Banks and other financial institutions use mobile commerce to allow
their customers to access account information and make transactions, such as purchasing
stocks, remitting money. This service is often referred to as mobile banking, or m-
banking.
Mobile browsing: Using a mobile browser—a World Wide Web browser on a mobile
device—customers can shop online without having to be at their personal computer.
Many mobile marketing apps with geo-location capability are now delivering user-
specific marketing messages to the right person at the right time.
Mobile marketing and advertising: In the context of mobile commerce, mobile
marketing refers to marketing sent to mobile devices. Companies have reported that they
see better response from mobile marketing campaigns than from traditional campaigns.
The consumer can receive a marketing message or discount coupon and, within a few
seconds, make a decision to buy and go on to complete the sale - without disrupting their
current real-world activity.
Mobile purchase: Catalog merchants can accept orders from customers electronically, via
the customer's mobile device. In some cases, the merchant may even deliver the catalog
electronically, rather than mailing a paper catalog to the customer. Consumers making
mobile purchases can also receive value-add upselling services and offers. Some
merchants provide mobile web sites that are customized for the smaller screen and
limited user interface of a mobile device.
Here are some examples of successful m-commerce applications:
Baked by Melissa: Baked by Melissa decided to develop an iPad application instead of going
through iPhone app route. Through the iPad app, clients are also able to post their cupcake
to the Baked by Melissa public gallery, share it on Facebook with friends and family, and
buy cupcakes for orders of 300 or more. (iOS)
Citi: Using this application, clients can access their finances, customizable charts of payee
spending and compare personal spending habits with general consumer data, analyze
personal spending habits, filtering by location, income bracket, age group and purchase
category. (Android, iOS)

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E-Commerce Unit-7: M-Commerce

Domino's Pizza: In 2012, Domino’s not only developed a mobile app for Android devices, but
for Windows Phone 7 as well. At the present time, Domino’s Pizza offers its mobile
ordering app to more than 80% of smartphones. In March, Domino’s has surpassed
140.000 downloads for its Android mobile ordering app. (Android, iOS, Windows Phone)
Ticketmaster: This mobile app is a great way for consumers to browse and search for concerts
and games in their region. The application also includes social media. Consumers can share
their plans with friends and family through social networks such as Twitter, Facebook and
Foursquare. (Android, iOS)
TGI Fridays: This application lets consumers find the nearest location, browse the restaurant’s
menus and a check out the company’s rewards program. What is amazing about the
application is the ability for clients to pay their bills. (Android, iOS)

Differences between E-Commerce and M-Commerce

Comparison E-Commerce M-Commerce
Meaning Any kind of commercial transaction M-commerce refers to the commercial
that is concluded, over the internet activities which are transacted with the
using electronic system is known as help of wireless devices such as cell
e-commerce. phone or laptops.
Device used Computers and Laptops Mobiles, Tablets, PDAs, iPad etc.
Developed In 1970's In 1990's
Superset/Subset Superset Subset
Portability No Yes
Use of internet Mandatory Not mandatory
Reach Narrow i.e. it is available only in Broad (Anywhere) due to its
those places where there is internet portability.
along with electricity.

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