M-commerce

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M-commerce or mobile commerce stands for electronic commerce made through mobile devices.

M-commerce is currently mainly used for the sale of mobile phone ring-tones and games, although as 3G/UMTS services roll out it is increasingly used to enable payment for location-based services such as maps, as well as video and audio content, including full length music tracks. Other services include the sending of information such as football scores via SMS.

Currently the main payment methods used to enable m-commerce are:

premium-rate calling numbers,
charging to the mobile telephone user's bill or
deducting from their calling credit, either directly or via reverse-charged SMS.

'M-commerce' was coined in the late 1990s during the dot-com boom. The idea that highly profitable M-commerce applications would be possible though the broadband mobile telephony provided by 2.5G and 3G cellphone services was one of the main reasons for hundreds of billions of dollars in licensing fees paid by European telecommunications companies for UMTS and other 3G licenses in 2000 and 2001.

Other examples of M-commerce applications are information-on-demand systems like news services or stock tickers, banking and stock brokerage applications by SMS, WAP or iMode.

[edit] Trends in Mobile Commerce

PDA’s and cellular phones have become so popular that many businesses are beginning to use m-commerce as a more efficient method of reaching the demands of their customers. Although most trends and advances are seen in Asia and in Europe, North America (Canada and the United States) is also beginning to take advantage of m-commerce.

Banks and other financial institutions 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, stock quotes and financial advice, from anywhere, but also the possibility to make transactions, e.g. purchasing stocks, remitting money, via mobile phones. This service is often referred to as Mobile Banking or M-Banking. The stock market services offered via mobile devices have also become more popular and are known as Mobile Brokerage, as they allow the subscriber to react to market developments in a timely fashion and irrespective of their physical location.

News information is also becoming more popular with subscriptions to daily headlines from anywhere in the world being transmitted to mobile devices. Sports and entertainment are areas that have also grown with the demand for mobile related services. 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.

[edit] Future implications

Financial Institutions such as Banks see mobile commerce as offering new channels of service to customers as well as offering them new and innovative products. These financial institutions are working to design and implement new applications that will offer mobile payment (ie. being able to pay for groceries) and mobile brokering. The travel industry, in realizing the possible benefits of m-commerce, is working on technologies that will take care of travel arrangements, update customers on flight status, notify them when this information changes and will offer to make new arrangements based on preset user preferences requiring no input from the user. Therefore, a customer’s entire trip can be scheduled and maintained using only their mobile device. The retail sector is also looking into the possibility of using mobile commerce for making the purchase of merchandize easier. Customers will be able to browse and order products while using a cheaper more secure payment method. An example of this is; instead of using paper catalogues, retailers can send customers a list of products that the customer would be interested in, directly to their mobile device. Additionally, retailers will also be able to track customers at all times and notify them of discounts at local stores in which that customer would be interested in. Shopping will also be easier. Soon, phones will be equipped with “bar-code scanners” and shoppers could scan an item and find out its pricing and availability. In the entertainment industry, m-commerce could be used for the purchasing of movie tickets, verify someone's ID or authorize their reservation information. This industry will also be able to promote wireless gaming and music.