M-commerce: an example of interactive media developments

1. M-commerce: an example of interactive media developments Gary Akehurst

2. m-commerce E-commerce: “Electronic commerce is an emerging concept that describes the process of buying, selling, or exchanging products, services and information via computer networks, including the Internet”. Turban, King, Lee, Warkentin and Chung, (2002) M-commerce: “Mobile commerce is referred to as ‘transactions with monetary value, conducted using the mobile Internet’. This definition covers business to business, business to consumer and consumers to consumer transactions. Mobile commerce is a sub-set of e-commerce in terms of technical issues. Additionally, m-commerce is not a truncated form of e-commerce but a new, innovative way of conducting time-critical transactions regardless of location”. Paavilainen (2002)

3. m-commerce E-commerce appears to be moving towards m-commerce • Fast growth of mobile market generated in part by prepaid contracts • Mobile phones are affordable items of personal equipment • Mobile phones becoming smarter and promise a closer integration of online activity with other tasks (e.g. Apple iPhone) • Using the web has become an habitual, daily part of life and work for many people in developed countries • The mobile phone is becoming a Personal Trusted Device (PTD) enabling secure banking, payment and ticketing transactions

4. m-commerce • Seeing mobile phones becoming digital wallets, useful for a wide range of mobile transactions either remotely, over digital mobile networks or locally at points of sale such as parking meters • Mobile commerce will be used for buying goods, financial services, purchasing different types of digital content (e.g. ringing tones, graphics, music files, picture messages from content providers) • Games, downloadable phone applications, music and video feeds have ararived • Do not confuse this future m-commerce with the poor WAP format (Wireless Application Protocol) • Bluetooth wireless technology and other wireless technologies has revolutionised personal connectivity with various devices and systems (although Bluetooth currently has a limited 10 to 30 metre range)

5. m-commerce • In order to support future m-commerce applications a new generation network is needed. General Packet Radio Service (GPRS) will replace today's circuit switching technology enabling continuous connection to data networks, information and entertainment services • GPRS enables multimedia messaging, imaging and browsing and will enable migration to enhanced data for GSM evolution • The much talked-about 3G networks will enable convergence of content, Internet and telecommunications, delivering media rich content (including audio and video)

6. m-commerce • The key drivers for mobile commerce service adoption will be ease of use and security • Too complex and time-consuming applications and services will discourage consumers from going mobile • The challenge is to implement a secure payment system that is convenient and simple to use • Winning the trust of consumers will take time given e-commerce security scares from time to time • Fast wireless internet access hotspots appearing at railway stations, coffee shops, airports, motorway service stations and other public places

7. m-commerce M-commerce characteristics • Mobility (based on users carrying a cell phone or mobile device everywhere they go, so users can initiate a contact with commercial and other systems whenever they feel a need to do so) • Broad accessibility (people can be reached at any time, breaking geographic and time barriers) • Ubiquity (availability of smartphones, Blackberrys and personal digital assistant (PDA) fulfills needs for real-time information and communication anywhere independent of user’s location) • Convenience (stored data always at hand and increasingly easy to use, enabling connection to the Internet, intranets and databases) • Localisation of products and services - when a Global Positioning System (GPS) is attached to a wireless device, precise location information is known. When the mobile operator knows the user’s location then localisation of services can be arranged

8. m-commerce • Privacy is an issue. Phones will soon be able to “sense” where the user is and offer customised information relevant to that location (e.g. location of the nearest ATM or fast food outlet) • There is potential for misuse of this personal data such as bombarding users with adverts for their local restaurant • M-commerce may offer a way of avoiding queue waiting or carrying cash as well as gaining greater control over expenditures

9. m-commerce • Consumers want simplicity: • Ring the car parking machine, parking ticket emerges, £1.80 debited to your mobile bill • What you currently get is: • Complications, open this account • Register • Remember passwords • Must have a credit card • Multiple key strokes

10. m-commerce • Identity management is crucial • Currently we have to remember countless PINs, passwords, usernames and pass codes • If we can log on to any service using a phone, punching in the same PIN or thumb print each time, then take-up of services will increase rapidly • Once authenticated, we could browse services with operators passing on a standard digital identity (a mobile passport)

11. m-commerce Financial Applications Stockbroking • Time sensitive alerts and notifications based on pre-defined factors such as price movements • Real-time personalised news headlines • Instant advisory services • Portfolio management • Quote checks • Buying and selling stock • Security by SmartTrust technology based on Public Key Infrastructure using digital signatures

12. m-commerce Banking services • Basic services include the same functions as fixed Internet banking services • Advanced services are designed specifically for mobile users offering location-independent and time sensitive instant messages and integration with mobile shopping services • Advanced services • Automatic balance notification according to predefined limits • Credit line notifications • Downloadable exchange rate calculator • Instant credit agreements • Direct integration between mobile merchants and banking services

13. m-commerce Mobile Payment Systems • Three players – mobile operators, financial institutions and device manufacturers • Mobile operators would like to become middlemen collecting a small cut for providing security and debt recovery • Financial institutions see mobile payments as their core business since they provide credit and payment systems • Device manufacturers are concerned about the threat of slow development of payment methods that slows down demand for mobile phones

14. m-commerce • Micro payments (user calls a certain number where per minute charges equal the cost of the purchased item or call the number with a prefix) • M-wallet designed to offer single-click payment mechanisms to wireless application providers, portals and e-merchants, and they in turn provide for their customers • The m-Wallet stores all a customer’s key information including PIN (personal identification number), multiple credit card details and multiple billing and shipping addresses (at the choice of the customer) • Enables users to make transactions via smart phones

15. m-commerce Smart Cards • Mobile consumers are already using a variety of smart cards • Usedfor buying groceries to movie tickets • Easy to securely store information for mobile banking, transport, health care and corporate network security • Will challenge existing business models especially in retailing

16. m-commerce Shopping • Mobiles are generally used quickly when additional information is not needed (suited to impulse buying) • The transaction must therefore be easy and user friendly • The time for the shopping process needs to be considered • What information does the customer need to key in? • The length of product descriptions and graphics • Retailers experimenting with secure server storage of mobile customer details

17. m-commerce Advertising • Around 1.5 billion mobile subscribers worldwide and growing • Enormous opportunities for targeted and personalised one-to-one advertising • To stop bombardment of offers consumers may be able to specify preferences for certain product categories, certain stores and brands – so an offer from a preferred store with preferred product category for sale has the highest priority • “Peoples” a mobile operator in Hong Kong has launched the mSpot service that uses location-based advertising in return for subsidising free calls • Estimated some 37 billion adverts and alerts are sent to European mobile devices, and 65% of users are prepared to accept these

18. m-commerce Individual Consumer Services • Short message (SMS) and multimedia message services (MMS) – SMS existed since 1991 • News and information - pull applications where the user asks for information by sending a keyword or message; push applications news sent to subscribers automatically according to pre-configured settings • Ticketing and reservations – one of the first applications as the purchasing process is straightforward and only small amounts of information transferred • Ticketmaster offers sports, concert, theatre and other tickets via a fixed Internet interface but a wireless service “Local Intelligence” is available in 32 metropolitan areas short messaging to a variety of mobile devices. More advanced personalised profiles and reminders have been introduced. Revenue generated from ticket surcharges, sponsorship and advertising

19. m-commerce • Hotel, restaurant, taxis and car rental – the ability to search for these services on the move and make reservations • Hotelguide provides a mobile version of Hotelguide.com; through a mobile device users can search for information of more than 60,000 hotels around the world (users type in hotel preference and city, can choose links to more information about a hotel such as prices, contact, location, etc. and can make a reservation by calling) • Bluetooth-enabled mobiles can be instantly recognised when interacting with the reserved hotel system; after confirming the guest is properly registered the guest can use a password to open the room door, checkout, buy from vending machines, mini bars, pay the bill and get loyalty points

20. m-commerce • Betting and gambling – time sensitive, suitable for large target groups • Participants can offer bets in the middle of sports games and races but whether networks could handle sudden increases of demand (say just before a free kick in a football match) is debateable • Mobile entertainment • Ringing tones and icons to customise devices • Mobile music, pay as you listen • Mobile imaging and video • Mobile games • Mobile electronic pets

21. m-commerce Telematics • Wireless data and voice systems for vehicles normally combined with Global Positioning Systems • Applications include: • Roadside assistance • Emergency services such as automatic airbag notification • Remote engine diagnostics • Location-based navigation and maps • M-commerce applications such as traffic reports and ticket reservations • Stolen car tracking • Remote door lock and unlock • Concierge services • Services linked to voice recognition technology