The term mobile commerce was originally coined in 1997 by Kevin Duffey at the launch of the Global Mobile Commerce Forum, to mean "the delivery of
electronic commerce
E-commerce (electronic commerce) is the activity of electronically buying or selling of products on online services or over the Internet. E-commerce draws on technologies such as mobile commerce, electronic funds transfer, supply chain manageme ...
capabilities directly into the consumer’s hand, anywhere, via
wireless
Wireless communication (or just wireless, when the context allows) is the transfer of information between two or more points without the use of an electrical conductor, optical fiber or other continuous guided medium for the transfer. The most ...
technology." Many choose to think of Mobile Commerce as meaning "a retail outlet in your customer’s pocket."
Mobile
Mobile may refer to:
Places
* Mobile, Alabama, a U.S. port city
* Mobile County, Alabama
* Mobile, Arizona, a small town near Phoenix, U.S.
* Mobile, Newfoundland and Labrador
Arts, entertainment, and media Music Groups and labels
* Mobile ( ...
commerce is worth US$800 billion, with Asia representing almost half of the market.
History
The Global Mobile Commerce Forum, which came to include over 100 organisations, had its fully minuted launch in London on 10 November 1997. Kevin Duffey was elected as the Executive Chairman at the first meeting in November 1997. The meeting was opened by Dr. Mike Short, former chairman of the
GSM
The Global System for Mobile Communications (GSM) is a standard developed by the European Telecommunications Standards Institute (ETSI) to describe the protocols for second-generation ( 2G) digital cellular networks used by mobile devices such ...
Association, with the very first forecasts for mobile commerce from Kevin Duffey (Group Telecoms Director of
Logica
Logica plc was a multinational IT and management consultancy company headquartered in London and later Reading, United Kingdom.
Founded in 1969, the company had offices in London and in a number of major cities across England, Wales and Scot ...
) and Tom Alexander (later CEO of
Virgin Mobile
Virgin Mobile is a wireless communications brand used by seven independent brand-licensees worldwide. Virgin Mobile branded wireless communications services are available in the United Kingdom, Ireland, Canada, Colombia, Chile, Kuwait, Saudi Ara ...
and then of Orange). Over 100 companies joined the Forum within a year, many forming mobile commerce teams of their own, e.g. MasterCard and Motorola. Of these one hundred companies, the first two were Logica and
Cellnet
O₂ UK (legally incorporated as Telefonica UK Limited, stylized as O₂) is a British telecommunications services provider, headquartered in Slough, England. It operates under the O2 brand. It is owned by Virgin Media O2, a 50:50 joint ventu ...
(which later became O2). Member organisations such as
Nokia
Nokia Corporation (natively Nokia Oyj, referred to as Nokia) is a Finnish multinational corporation, multinational telecommunications industry, telecommunications, technology company, information technology, and consumer electronics corporatio ...
, Apple,
Alcatel Alcatel may refer to:
* Alcatel, a former French telecommunications equipment company, which became Alcatel-Lucent and is now part of Nokia
* Alcatel Mobile, a brand of mobile phones, tablets and wearables, formerly a joint venture between Alcatel ...
, and
Vodafone
Vodafone Group Public limited company, plc () is a British Multinational corporation, multinational Telephone company, telecommunications company. Its registered office and Headquarters, global headquarters are in Newbury, Berkshire, England. It ...
began a series of trials and collaborations.
Mobile commerce services were first delivered in 1997, when the first two mobile-phone enabled
Coca-Cola
Coca-Cola, or Coke, is a carbonated soft drink manufactured by the Coca-Cola Company. Originally marketed as a temperance drink and intended as a patent medicine, it was invented in the late 19th century by John Stith Pemberton in Atlanta ...
vending machines were installed in the
Helsinki
Helsinki ( or ; ; sv, Helsingfors, ) is the Capital city, capital, primate city, primate, and List of cities and towns in Finland, most populous city of Finland. Located on the shore of the Gulf of Finland, it is the seat of the region of U ...
area in
Finland
Finland ( fi, Suomi ; sv, Finland ), officially the Republic of Finland (; ), is a Nordic country in Northern Europe. It shares land borders with Sweden to the northwest, Norway to the north, and Russia to the east, with the Gulf of B ...
. The machines accepted payment via
SMS
Short Message/Messaging Service, commonly abbreviated as SMS, is a text messaging service component of most telephone, Internet and mobile device systems. It uses standardized communication protocols that let mobile devices exchange short text ...
text messages. This work evolved to several new mobile applications such as the first mobile phone-based banking service was launched in 1997 by
Merita Bank of Finland, also using SMS.
Finnair
Finnair ( fi, Finnair Oyj, sv, Finnair Abp) is the flag carrier and largest airline of Finland, with its headquarters in Vantaa on the grounds of Helsinki Airport, its hub. Finnair and its subsidiaries dominate both domestic and international ...
mobile check-in was also a major milestone, first introduced in 2001.
The m-Commerce(tm) server developed in late 1997 by Kevin Duffey and Andrew Tobin at Logica won the 1998
Financial Times
The ''Financial Times'' (''FT'') is a British daily newspaper printed in broadsheet and published digitally that focuses on business and economic current affairs. Based in London, England, the paper is owned by a Japanese holding company, Nik ...
award for "most innovative mobile product," in a solution implemented with De La Rue, Motorola and Logica. The Financial Times commended the solution for "turning mobile commerce into a reality." The trademark for m-Commerce was filed on 7 April 2008.
In 1998, the first sales of digital content as downloads to mobile phones were made possible when the first commercial downloadable
ringtone
A ringtone, ring tone or ring is the sound made by a telephone to indicate an incoming call. Originally referring to and made by the electromechanical striking of bells, the term now refers to any sound on any device alerting of a new incoming ...
s were launched in Finland by
Radiolinja
Radiolinja was a Finnish GSM operator founded on September 19, 1988. On March 27, 1991, the world's first GSM phone call was made on Radiolinja's network. The network was opened for commercial use on July 1, 1991.
Radiolinja's slogan was ''So tha ...
(now part of
Elisa Oyj
(English trade name Elisa Corporation) is a Finnish telecommunications company founded in 1882. Its previous names were Helsingin Puhelin (until July 2000) and Elisa Communications Oyj (until 2003). Elisa is a telecommunications, ICT and onli ...
).
Two major national commercial platforms for mobile commerce were launched in 1999: Smart Money in the
Philippines
The Philippines (; fil, Pilipinas, links=no), officially the Republic of the Philippines ( fil, Republika ng Pilipinas, links=no),
* bik, Republika kan Filipinas
* ceb, Republika sa Pilipinas
* cbk, República de Filipinas
* hil, Republ ...
, and
NTT DoCoMo's
i-Mode
NTT DoCoMo's i-mode is a mobile internet (distinct from wireless internet) service popular in Japan. Unlike Wireless Application Protocols, i-mode encompasses a wider variety of internet standards, including web access, e-mail, and the packet- ...
Internet service in
Japan
Japan ( ja, 日本, or , and formally , ''Nihonkoku'') is an island country in East Asia. It is situated in the northwest Pacific Ocean, and is bordered on the west by the Sea of Japan, while extending from the Sea of Okhotsk in the north ...
. i-Mode offered a revenue-sharing plan where NTT DoCoMo kept 9 percent of the fee users paid for content, and returned 91 percent to the content owner.
Mobile-commerce-related services spread rapidly in early 2000.
Norway
Norway, officially the Kingdom of Norway, is a Nordic country in Northern Europe, the mainland territory of which comprises the western and northernmost portion of the Scandinavian Peninsula. The remote Arctic island of Jan Mayen and t ...
launched mobile parking payments.
Austria
Austria, , bar, Östareich officially the Republic of Austria, is a country in the southern part of Central Europe, lying in the Eastern Alps. It is a federation of nine states, one of which is the capital, Vienna, the most populous ...
offered train ticketing via mobile device.
Japan
Japan ( ja, 日本, or , and formally , ''Nihonkoku'') is an island country in East Asia. It is situated in the northwest Pacific Ocean, and is bordered on the west by the Sea of Japan, while extending from the Sea of Okhotsk in the north ...
offered mobile purchases of airline tickets.
In April 2002, building on the work of the Global Mobile Commerce Forum (GMCF), the
European Telecommunications Standards Institute
The European Telecommunications Standards Institute (ETSI) is an independent, not-for-profit, standardization organization in the field of Information and communications technology, information and communications. ETSI supports the developmen ...
(ETSI) appointed Joachim Hoffmann of Motorola to develop official standards for mobile commerce. In appointing Mr Hoffman, ETSI quoted industry analysts as predicting "that m-commerce is poised for such an exponential growth over the next few years that could reach US$200 billion by 2004".
As of 2008, UCL Computer Science and
Peter J. Bentley demonstrated the potential for medical applications on mobile devices.
PDAs and
cellular phone
A mobile phone, cellular phone, cell phone, cellphone, handphone, hand phone or pocket phone, sometimes shortened to simply mobile, cell, or just phone, is a portable telephone that can make and receive calls over a radio frequency link while ...
s have become so popular that many businesses are beginning to use mobile commerce as a more efficient way to communicate with their customers.
In order to exploit the potential mobile commerce market, mobile phone manufacturers such as Nokia, Ericsson, Motorola, and
Qualcomm
Qualcomm () is an American multinational corporation headquartered in San Diego, California, and incorporated in Delaware. It creates semiconductors, software, and services related to wireless technology. It owns patents critical to the 5G, 4 ...
are working with carriers such as AT&T Wireless and Sprint to develop
WAP
WAP or Wap may refer to:
Music
* "WAP" (song), a 2020 song by Cardi B featuring Megan Thee Stallion
Organizations
* Weatherization Assistance Program, for US energy costs
* Western Australia Party, a political party founded in 2016
* Western A ...
-enabled smartphones. Smartphones offer fax, e-mail, and phone capabilities.
"
Profitability
In economics, profit is the difference between the revenue that an economic entity has received from its outputs and the total cost of its inputs. It is equal to total revenue minus total cost, including both explicit and implicit costs.
It i ...
for device vendors and carriers hinges on high-end mobile devices and the accompanying killer applications," said Burchett. Perennial early adopters, such as the youth market, which are the least price sensitive, as well as more open to premium mobile content and applications, must also be a key target for device vendors.
Since the launch of the
iPhone in 2007, mobile commerce has moved away from SMS systems and into actual applications. SMS has significant
security vulnerabilities
Vulnerabilities are flaws in a computer system that weaken the overall security of the device/system. Vulnerabilities can be weaknesses in either the hardware itself, or the software that runs on the hardware. Vulnerabilities can be exploited by ...
and congestion problems, even though it is widely available and accessible. In addition, improvements in the capabilities of modern mobile devices make it prudent to place more of the resource burden on the mobile device.
Unlike online banking using bank websites, mobile banking allows a smaller number of operations based on short messages or applications installed on mobile devices. At present, it is estimated that by 2022, the number of customers adopting mobile banking will increase to 2 billion, and banks are investing more and more in improving mobile applications to improve security and customer satisfaction.
More recently,
brick and mortar business
Brick and mortar (also bricks and mortar or B&M) refers to a physical presence of an organization or business in a building or other structure. The term ''brick-and-mortar business'' is often used to refer to a company that possesses or leases ...
owners, and
big-box retailers
A big-box store (also hyperstore, supercenter, superstore, or megastore) is a physically large retail establishment, usually part of a chain of stores. The term sometimes also refers, by extension, to the company that operates the store. The t ...
in particular, have made an effort to take advantage of mobile commerce by utilizing a number of mobile capabilities such as
location-based service
A location-based service (LBS) is a general term denoting software services which use geographic data and information to provide services or information to users. LBS can be used in a variety of contexts, such as health, indoor object search, ent ...
s,
barcode scanning, and
push notifications
Push technology or server push is a style of Internet-based communication where the request for a given transaction is initiated by the publisher or central server. It is contrasted with pull/get, where the request for the transmission of informat ...
to improve the customer experience of shopping in physical stores. By creating what is referred to as a 'bricks & clicks' environment, physical retailers can allow customers to access the common benefits of shopping online (such as product reviews, information, and coupons) while still shopping in the physical store. This is seen as a bridge between the gap created by e-commerce and in-store shopping, and is being utilized by physical retailers as a way to compete with the lower prices typically seen through online retailers. By mid summer 2013, "omnichannel" retailers (those with significant e-commerce and in-store sales) were seeing between 25% and 30% of traffic to their online properties originating from mobile devices. Some other pure play/online-only retail sites (especially those in the travel category) as well as flash sales sites and deal sites were seeing between 40% and 50% of traffic (and sometimes significantly more) originate from mobile devices.
The Google Wallet Mobile App launched in September 2011 and the m-Commerce joint venture formed in June 2011 between Vodafone, O2, Orange and T-Mobile are recent developments of note. Reflecting the importance of m-Commerce, in April 2012 the Competition Commissioner of the European Commission ordered an in-depth investigation of the m-Commerce joint venture between Vodafone, O2, Orange and T-Mobile. A recent survey states that 2012, 41% of smartphone customers have purchased retail products with their mobile devices.
Products and services available
Mobile money transfer
In
Kenya
)
, national_anthem = "Ee Mungu Nguvu Yetu"()
, image_map =
, map_caption =
, image_map2 =
, capital = Nairobi
, coordinates =
, largest_city = Nairobi
, ...
money transfer is mainly done through the use of mobile phones. This was an initiative of a multimillion shillings company in Kenya named Safaricom. Currently, the companies involved are Safaricom and Airtel. Mobile
money transfer services in Kenya are now provided by the two companies under the names M-PESA and Airtel Money respectively.
A similar system called
MobilePay
MobilePay is a mobile payment application developed by Danske Bank. The service allows payments by means of a smartphone application and was published on May 7, 2013, after Danske Bank discontinued its cooperation with other Danish banks on a commo ...
has been operated by
Danske Bank
Danske Bank A/S is a Danish multinational banking and financial services corporation. Headquartered in Copenhagen, it is the largest bank in Denmark and a major retail bank in the northern European region with over 5 million retail customers. ...
in
Denmark
)
, song = ( en, "King Christian stood by the lofty mast")
, song_type = National and royal anthem
, image_map = EU-Denmark.svg
, map_caption =
, subdivision_type = Sovereign state
, subdivision_name = Danish Realm, Kingdom of Denmark
...
since 2013. It has gained considerable popularity with about 1.6 million users by mid-2015. Another similar system called
Vipps
Vipps is a Norwegian mobile payment application designed for smartphones developed by DNB. Vipps was released May 30, 2015 and, having reached 1 million users by November 5, 2015, Vipps became Norway's largest payment application. Although Vipps ...
was introduced in
Norway
Norway, officially the Kingdom of Norway, is a Nordic country in Northern Europe, the mainland territory of which comprises the western and northernmost portion of the Scandinavian Peninsula. The remote Arctic island of Jan Mayen and t ...
in 2015.
Mobile automated teller machine (ATM) is a special type of ATM. Most ATMs are meant to be stationary, and they're often found attached to the side of financial institutions, in stores, and in malls. A mobile ATM, on the other hand, is meant to be moved from location to location. This type of ATM is often found at special events for which ATM service is only needed temporarily. For example, they may be found at carnivals, fairs, and parades. They may also be used at seminars and workshops when there is no regular ATM nearby.
Mobile ATMs are usually self-contained units that don't need a building or enclosure. Usually, a mobile ATM can be placed in just about any location and can transmit transaction information wirelessly, so there's no need to have a phone line handy. Mobile ATMs may, however, require access to an electrical source, though there are some capable of running on alternative sources of power. Often, these units are constructed of weather-resistant materials, so they can be used in practically any type of weather conditions. Additionally, these machines typically have internal heating and air conditioning units that help keep them functional despite the temperature of the environment.ion of mobile money services for the unbanked, operators are now looking for efficient ways to roll out and manage distribution networks that can support cash-in and cash-out. Unlike traditional ATM, sicap Mobile ATM have been specially engineered to connect to mobile money platforms and provide bank grade ATM quality.
In Hungary, Vodafone allows cash or bank card payments of monthly phone bills. The Hungarian market is one where direct debits are not standard practice, so the facility eases the burden of queuing for the postpaid half of Vodafone's subscriber base in Hungary.
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 numbers of users are now moving towards this technology. Best example would be
IRCTC
Indian Railway Catering and Tourism Corporation (IRCTC) is an Indian public sector undertaking that provides ticketing, catering, and tourism services for the Indian Railways. It was initially wholly owned by the Government of India and operated ...
where ticket comes as SMS to users. New technology such as
RFID
Radio-frequency identification (RFID) uses electromagnetic fields to automatically identify and track tags attached to objects. An RFID system consists of a tiny radio transponder, a radio receiver and transmitter. When triggered by an electromag ...
can now be used to directly provide a single association digital ticket via the mobile device hardware associated with relevant software.
Mobile vouchers, coupons and loyalty cards
Mobile ticketing technology can also be used for the distribution of vouchers, coupons, and loyalty cards. These items are represented by a virtual token that is sent to the mobile phone. A customer presenting a mobile phone with one of these tokens at the
point of sale receives the same benefits as if they had the traditional token. Stores may send coupons to customers using
location-based service
A location-based service (LBS) is a general term denoting software services which use geographic data and information to provide services or information to users. LBS can be used in a variety of contexts, such as health, indoor object search, ent ...
s to determine when the customer is nearby. Using a connected device and the networking effect can also allow for gamification within the shopping experience.
Content purchase and delivery
Currently, mobile content purchase and delivery mainly consist of the sale of ring-tones, wallpapers, apps, and games for mobile phones. The convergence of mobile phones, portable audio players, and video players into a single device is increasing the purchase and delivery of full-length music tracks and video. The download speeds available with
4G networks make it possible to buy a movie on a mobile device in a couple of seconds.
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 service
A location-based service (LBS) is a general term denoting software services which use geographic data and information to provide services or information to users. LBS can be used in a variety of contexts, such as health, indoor object search, ent ...
s such as:
* Local discount offers
* Local weather
* Tracking and monitoring of people
* Data driven mashups targeting at a hyper-local level
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
News is information about current events. This may be provided through many different Media (communication), media: word of mouth, printing, Mail, postal systems, broadcasting, Telecommunications, electronic communication, or through the tes ...
*
Stock quotes
* Sports scores
* Financial records
*
Traffic reporting
Traffic reporting is the near real-time distribution of information about road conditions such as traffic congestion, detours, and traffic collisions. The reports help drivers anticipate and avoid traffic problems. Traffic reports, especially in ...
* Emergency Alerts
*
Location Based Notifications
Customized traffic information, based on a user's actual travel patterns, can be sent to a mobile device. This customized data is more useful than a generic traffic-report broadcast, but was impractical before the invention of modern mobile devices due to the
bandwidth
Bandwidth commonly refers to:
* Bandwidth (signal processing) or ''analog bandwidth'', ''frequency bandwidth'', or ''radio bandwidth'', a measure of the width of a frequency range
* Bandwidth (computing), the rate of data transfer, bit rate or thr ...
requirements.
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
Mobile banking is a service provided by a bank or other financial institution that allows its customers to conduct financial transactions remotely using a mobile device such as a smartphone or tablet. Unlike the related internet banking it uses ...
'', or m-banking.
Mobile brokerage
Stock market services offered via mobile devices have also become more popular and are known as Mobile Brokerage. They allow the subscriber to react to market developments in a timely fashion and irrespective of their physical location.
Auctions
Over the past three years
mobile reverse auction
Mobile may refer to:
Places
* Mobile, Alabama, a U.S. port city
* Mobile County, Alabama
* Mobile, Arizona, a small town near Phoenix, U.S.
* Mobile, Newfoundland and Labrador
Arts, entertainment, and media Music Groups and labels
* Mobile ( ...
solutions have grown in popularity. Unlike traditional auctions, the reverse auction (or low-bid auction) bills the consumer's phone each time they place a bid. Many mobile
SMS
Short Message/Messaging Service, commonly abbreviated as SMS, is a text messaging service component of most telephone, Internet and mobile device systems. It uses standardized communication protocols that let mobile devices exchange short text ...
commerce solutions rely on a one-time purchase or one-time subscription; however, reverse auctions offer a high return for the mobile vendor as they require the consumer to make multiple transactions over a long period of time.
Mobile browsing
Using a mobile browser—a
World Wide Web
The World Wide Web (WWW), commonly known as the Web, is an information system enabling documents and other web resources to be accessed over the Internet.
Documents and downloadable media are made available to the network through web se ...
browser on a mobile device—customers can shop online without having to be at their personal computer. Many
mobile marketing
Mobile marketing is a multi-channel online marketing technique focused at reaching a specific audience on their smartphones, feature phones, tablets, or any other related devices through websites, e-mail, SMS and MMS, social media, or mobile a ...
apps with geo-location capability are now delivering user-specific marketing messages to the right person at the right time.
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
Upselling is a sales technique where a seller invites the customer to purchase more expensive items, upgrades, or other add-ons to generate more revenue. While it usually involves marketing more profitable services or products, it can be simply ...
services and offers. Some merchants provide
mobile web
The mobile web refers to mobile browser-based World Wide Web services accessed from handheld mobile devices, such as smartphones or feature phones, through a mobile or other wireless network.
History and development
Traditionally, the World ...
sites that are customized for the smaller screen and limited user interface of a mobile device.
In-application mobile phone payments
Payments can be made directly inside of an application running on a popular smartphone operating system, such as Google Android. Analyst firm Gartner expects in-application purchases to drive 41 percent of app store (also referred to as mobile software distribution platforms) revenue in 2016. In-app purchases can be used to buy
virtual goods
Virtual goods are non-physical objects and money purchased for use in online communities or online games. Digital goods, on the other hand, may be a broader category including digital books, music, and movies. Virtual goods are intangible by defin ...
, new and other mobile content and is ultimately billed by mobile carriers rather than the app stores themselves. Ericsson's IPX mobile commerce system is used by 120 mobile carriers to offer payment options such as try-before-you-buy, rentals and subscriptions.
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 primary reason for this is the instant nature of customer decision-making that mobile apps and websites enable. 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.
For example, a busy mom tending to her household chores with a baby in her arm could receive a marketing message on her mobile about baby products from a local store. She can and within a few clicks, place an order for her supplies without having to plan ahead for it. No more need to reach for her purse and hunt for credit cards, no need to log into her laptop and try to recall the web address of the store she visited last week, and surely no need to find a babysitter to cover for her while she runs to the local store.
Research demonstrates that consumers of mobile and wireline markets represent two distinct groups who are driven by different values and behaviors, and who exhibit dissimilar psychographic and demographic profiles. What aspects truly distinguish between a traditional online shopper from home and a mobile on-the-go shopper? Research shows that how individuals relate to four situational dimensions- place, time, social context and control determine to what extent they are ubiquitous or situated as consumers. These factors are important in triggering m-commerce from e-commerce. As a result, successful mobile commerce requires the development of marketing campaigns targeted to these particular dimensions and according to user segments.
Influence on youth markets
Mobile media is a rapidly changing field. New technologies, such as
WiMax
Worldwide Interoperability for Microwave Access (WiMAX) is a family of wireless broadband communication standards based on the IEEE 802.16 set of standards, which provide physical layer (PHY) and media access control (MAC) options.
The WiMAX ...
, act to accelerate innovation in mobile commerce. Early pioneers in mobile advertising include
Vodafone
Vodafone Group Public limited company, plc () is a British Multinational corporation, multinational Telephone company, telecommunications company. Its registered office and Headquarters, global headquarters are in Newbury, Berkshire, England. It ...
,
Orange
Orange most often refers to:
*Orange (fruit), the fruit of the tree species '' Citrus'' × ''sinensis''
** Orange blossom, its fragrant flower
*Orange (colour), from the color of an orange, occurs between red and yellow in the visible spectrum
* ...
, and
SK Telecom
SK Telecom Co., Ltd. ( or ) is a South Korean wireless telecommunications operator and former film distributor and is part of the SK Group, one of the country's largest chaebols. It leads the local market with 50.5 percent share as of 2008. ...
. An empirical study shows that over 70% of the mobile commerce users are under age of 25, as of 2019.
Mobile devices are heavily used in South Korea to conduct mobile commerce. Mobile companies in South Korea believed that mobile technology would become synonymous with youth lifestyle, based on their experience with previous generations of South Koreans. "Profitability for device vendors and carriers hinges on high-end mobile devices and the accompanying killer applications," said Daniel Longfield.
Payment methods
Consumers can use many forms of payment in mobile commerce, including:
*
Contactless payment
Contactless payment systems are credit cards and debit cards, key fobs, smart cards, or other devices, including smartphones and other mobile devices, that use radio-frequency identification (RFID) or near-field communication (NFC, e.g. Samsun ...
for in-person transactions through a mobile phone (such as
Apple Pay
Apple Pay is a mobile payment service by Apple Inc. that allows users to make payments in person, in iOS apps, and on the web. It is supported on these Apple devices: iPhone, Apple Watch, iPad, and Mac. It digitizes and can replace a cred ...
or
Google Pay). In a system like
EMV
EMV is a payment method based on a technical standard for smart payment cards and for payment terminals and automated teller machines which can accept them. EMV stands for " Europay, Mastercard, and Visa", the three companies that created th ...
, these are interoperable with contactless credit and debit cards.
*
Premium-rate telephone number
Premium-rate telephone numbers are telephone numbers that charge callers higher price rates for select services, including information and entertainment. A portion of the call fees is paid to the service provider, allowing premium calls to be an ...
s, which apply charges to the consumer's long-distance bill
* Mobile-Operator Billing allows charges to be added to the consumer's mobile telephone bill, including deductions to pre-paid calling plans
*
Credit card
A credit card is a payment card issued to users (cardholders) to enable the cardholder to pay a merchant for goods and services based on the cardholder's accrued debt (i.e., promise to the card issuer to pay them for the amounts plus the o ...
s and
debit card
A debit card, also known as a check card or bank card is a payment card that can be used in place of cash to make purchases. The term '' plastic card'' includes the above and as an identity document. These are similar to a credit card, but u ...
s
** Some providers allow credit cards to be stored in a phone's
SIM card
A typical SIM card (mini-SIM with micro-SIM cutout)
A GSM mobile phone
file:Simkarte NFC SecureElement.jpg, T-Mobile nano-SIM card with NFC capabilities in the SIM tray of an iPhone 6s
file:Tf sim both sides.png, A TracFone Wireless SIM card ha ...
or secure element
** Some providers are starting to use
host card emulation
Host card emulation (HCE) is the software architecture that provides exact virtual representation of various electronic identity (access, transit and banking) cards using only software. Prior to the HCE architecture, near field communication (NFC) ...
, or HCE (e.g.
Google Wallet and
Softcard
JVL Ventures, LLC d/b/a Softcard (formerly Isis Mobile Wallet), was a joint venture between AT&T, T-Mobile and Verizon which produced a mobile payments platform known as ''Softcard'', which used near-field communication (NFC) technology to allo ...
)
** Some providers store
credit card
A credit card is a payment card issued to users (cardholders) to enable the cardholder to pay a merchant for goods and services based on the cardholder's accrued debt (i.e., promise to the card issuer to pay them for the amounts plus the o ...
or
debit card
A debit card, also known as a check card or bank card is a payment card that can be used in place of cash to make purchases. The term '' plastic card'' includes the above and as an identity document. These are similar to a credit card, but u ...
information in the cloud; usually in
tokenized
In computer science, lexical analysis, lexing or tokenization is the process of converting a sequence of characters (such as in a computer program or web page) into a sequence of ''lexical tokens'' ( strings with an assigned and thus identified ...
. With tokenization, payment verification, authentication, and authorization are still required, but payment card numbers don't need to be stored, entered, or transmitted from the mobile device
*
Micropayment
A micropayment is a financial transaction involving a very small sum of money and usually one that occurs online. A number of micropayment systems were proposed and developed in the mid-to-late 1990s, all of which were ultimately unsuccessful. A s ...
services
*
Stored-value card
A stored-value card (SVC) is a payment card with a monetary value stored on the card itself, not in an external account maintained by a financial institution. This means no network access is required by the payment collection terminals as funds ...
s, often used with mobile-device application stores or music stores (e.g. iTunes)
App design
Interaction design
Interaction design, often abbreviated as IxD, is "the practice of designing interactive digital products, environments, systems, and services." Beyond the digital aspect, interaction design is also useful when creating physical (non-digital) produ ...
and
UX design
User experience design (UX design, UXD, UED, or XD) is the process of defining the experience a user would go through when interacting with a digital product or website. Design decisions in UX design are often driven by research, data analysis, an ...
has been at the core of the m-commerce experience from its conception, producing apps and mobile web pages that create highly usable interactions for users. However, much debate has occurred as to the focus that should be given to the apps. In recent research, Parker and Wang demonstrated that within
fashion
Fashion is a form of self-expression and autonomy at a particular period and place and in a specific context, of clothing, footwear, lifestyle, accessories, makeup, hairstyle, and body posture. The term implies a look defined by the fashion in ...
m-Commerce apps, the degree that the app helps the user shop (increasing convenience) was the most prominent function. Such use examples might be through design cues that help the user find their products with minimal search.
Additionally, shopping for others was a motivator for engaging in m-commerce apps with a great preference for close integration with
social media
Social media are interactive media technologies that facilitate the creation and sharing of information, ideas, interests, and other forms of expression through virtual communities and networks. While challenges to the definition of ''social medi ...
. Research shows that culture makes a significant difference in people's motivation to engage in shopping, where Western consumers - for example - have significantly different motivations to Chinese consumers.
App commerce
The popularity of apps has given rise to the latest iteration of mobile commerce: app commerce. This refers to retail transactions that take place on a native mobile app. App commerce is said to perform better than both desktop and mobile web when it comes to browsing duration and interactions.
[Microsoft UK Small and Medium Business Blog , Rising to the challenge of mobile in retail](_blank)
/ref> Average order value is reportedly greater with retail apps than traditional ecommerce, and conversion rates on apps are twice that of mobile websites.
Mobile Device Shopping Trends
Mobile applications serve as a means to ensure positive user experience, seamless interaction, and increased revenues for e-commerce. According to DesignRush report, mobile applications are expected to generate $189 billion by 2020. Moreover, a study by Forrester shows that mobile devices will be leveraged to facilitate over $1 trillion in sales in 2018.
See also
*E-commerce
E-commerce (electronic commerce) is the activity of electronically buying or selling of products on online services or over the Internet. E-commerce draws on technologies such as mobile commerce, electronic funds transfer, supply chain manageme ...
*Mobile banking
Mobile banking is a service provided by a bank or other financial institution that allows its customers to conduct financial transactions remotely using a mobile device such as a smartphone or tablet. Unlike the related internet banking it uses ...
*Mobile commerce service provider A mobile commerce service provider (mCSP) is an organization (or company) that provides any combination of consulting, software and computer systems for mobile e-commerce platforms, mobile devices (cellular phones, smartphones), mobile commerce
...
*Mobile dial code
A mobile dial code (MDC) is a grouping of 3 to 10 numbers following either a "#" "##" "*" "**" used to create a short, easy to remember phone number. Historically MDCs were used for repair related purposes by landline and wireless carriers. More r ...
*Mobile marketing
Mobile marketing is a multi-channel online marketing technique focused at reaching a specific audience on their smartphones, feature phones, tablets, or any other related devices through websites, e-mail, SMS and MMS, social media, or mobile a ...
*Mobile payment
A mobile payment, also referred to as mobile money, mobile money transfer and mobile wallet, is any of various payment processing services operated under financial regulations and performed from or via a mobile device, as the cardinal class of d ...
*Mobile ticketing
Mobile ticketing is the process whereby customers order, pay for, obtain, and validate tickets using mobile phones. A mobile ticket contains a verification unique to the holder's phone. Mobile tickets reduce the production and distribution costs as ...
*Mobile app
A mobile application or app is a computer program or software application designed to run on a mobile device such as a phone, tablet, or watch. Mobile applications often stand in contrast to desktop applications which are designed to run on d ...
References
Further reading
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{{Mobile phones
E-commerce
Mobile technology