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M COMMERCE

By: John Karanja, Sat Dec 10th, 2005 11:15:51 AM

INTRODUCTION DEFINITION OF M-COMMERCE Mobile commerce stands for electronic trading of goods and services made through mobile devices.M-Commerce is the wave of electronic commerce being brought about by wireless technology. It is not a new way of processing credit and debit cards this method has been around for a few years, but is just really starting to make a large impact on how we do business away from our offices.

TECHNOLOGY BEHIND M-COMMERCE M-Commerce first started with the use of wireless Point Of Sale swipe terminals and has since then made its way into cellular phones and Personal Digital Assistants. Wireless POS swipe terminals are much more expensive then regular "wired" terminals which require you to be nearby a phone jack and electrical outlet in order to connect to the online transaction systems. Mcommerce in the past has mainly been used for micropayments that is payments under 10 US dollars. However it has in the recent past been used to handle larger amonts. This was largely to security fears and the newness of the technology. In Kenya mcommerce is used fro purchase of ringtones and now recently pay electricity bills. The increase in popularity of PDA's and cellular phones has resulted in more and more businesses beginning to use m-commerce as a more efficient method of reaching their customers. TYPES OF MCOMMERCE 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, generating more than three-fourths of all m-commerce revenues by 2006.

1. Premium content This is where special or expensive content is offered to the phone subscriber on his phone. It depends a lot on the phone technology that is 3g(third generation) or 4g(4th generation). 3g phones are available even in Kenya however there are only a few countries like Japan and South Korea with 4g technologies enabled. These services include like video and music. Mobile phone companies also offer premium content like stock exchange information.

2. Remote payment This is largely similar to ecommerce on the web. It basically refers to the online payment of money whereby the one paying is in a different location from the one receiving. This is supported in mcommerce through secure payment connections.

3. Point-of-sale This refers to commerce in which the mobile device is used as a point of sale. This is possible if the device can access the online store. These devices are not the typical mobile devices but are capable of accessing higher content. They are usually WAP enabled and can access xml and java components as well.

MANAGEMENT ISSUES AND MCOMMERCE ROLE IN ORGANISATIONS For managers mcommerce provides the opportunity for streamlining organizations operations and increasing revenues at the same time. This has resulted in top level managers of very many large organizations spending considerable effort including time and money in investigating the potential of this technology. For instance Safaricom has spent millions of Kenya shillings in acquiring state of the art mcommerce enabled technologies and will hence be able to offer premium services to Safaricom phone subscribers like stock updates in the near future. There is a large organization known as the Mobile Content Rights Management Group which consists of Mobile phone manufacturers Intel, mm02, Nokia, Panasonic, RealNetworks, Samsung and Warner Bros. Studios who have launched a licensing and compliance framework called Content Management License Administrator (CMLA). This organization has been formed to address necessary business concerns and enable the rapid delivery of high-quality digital content to mobile handsets and other devices that deploy which also includes mcommerce services as well as broadband services USES OF MCOMMERCE AND CASES OF USE IN KENYA For instance banks and other financial institutions like cooperative bank are exploring the use of M-Commerce to broaden/retain their business by allowing their customers to not only access account information, e.g. bank balances from anywhere, but also the possibility to make transactions, e.g. like paying electricity bills and remitting money via mobile phones. This service is often referred to as Mobile Banking or M-Banking. In western countries stock market services are offered via mobile devices this has come to be known as Mobile Brokerage. News information is also becoming more popular with subscriptions to daily headlines from Kenya's daily newspapers such as Nation being sent to your mobile phone in a service known as get the 411. Safaricom and Kencell also offer Sports and entertainment for 5 shillings of your credit Shopping and reservation services are now more accessible when using mobile devices. 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. M-commerce is being used for the sale of mobile phone ring-tones and games.Soon M-Commerce will facilitate the mobile shopping and downloading of music tracks from your mobile device.See http://www.buyafricanmusic.com.

Advantages of M-Commerce 1. Customers are very easily accesible since 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 new business opportunities. 3. M-commerce is available anywhere with relatively small devices that is mobile phones and PDA's 4. Mobile commerce can be highly personalized and user has control over data. 5. Enhance customer seller relationships because communication is easier. Limitations of M-Commerce 1. Mobile devices have lower processing speeds than conventional PC'S 2. Small visual displays limit access to multimedia contents 3. No real standards in M-commerce .That is there is a lot differentiation in M-commerce solutions offered. GENERAL ISSUES REGARDING M-COMMERCE Security As electronic commerce comes to mobile phones, people will demand more security than the credit card. But even traditional e-commerce lacks the security to handle the billions of dollars in transactions made over the Internet. As more and more users access the Internet remotely -- away from their own desktop -- their interest in protecting their data increases proportionately. Smartcards especially those enhanced with biometrics "offer data protection and authentication for e-shoppers and could serve as the new backbone for safe electronic transactions. Smart cards, widely used in Europe and Asia, contain low-cost, low-memory microprocessors and are employed in a range of everyday transactions: prepaid phone calls, ATM banking, and public transportation. The embedded technology also can be found in national identity cards, driver's licenses, and health insurance cards. While smartcards typically require a password or PIN, proponents of biometrics say the science of measuring physical characteristics to verify a person's identity offers greater protection in the e-commerce era. Biometrics include: voice recognition, iris and face scans, and fingerprint authentication.

AREAS OF POTENTIAL GROWTH AND THE FUTURE FOR M-COMMERCE TECHNOLOGIES New Channels of Service Banks are working on mcommerce technologies that will facilitate deposits, payments, transfers and withdrawals. If successful banks will reduce operational costs drastically and will also be able to increase efficiency of transaction processing. The travel industry in turn is realizing the possible benefits of m-commerce which will allow customers to schedule, reschedule, plan trips through their mobile devices. Traders in the retail sector will be able to locate customers more easily and will also be able to provide secure payment methods, perhaps through mobile digital certificates or voice recognition. Easier access to customers will enable these retails to send targeted marketing messages informing the customers of newly available products or even invoicing customers. Courier Companies will for instance allow customers to track the transportation of packages much like it is in FEDEX where one can track a package moving from Nairobi to Hong 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 September 2005 · 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

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