Académique Documents
Professionnel Documents
Culture Documents
SUBMITTED TO:
MR.GAURAV CHANDIOK
DEPT : CA/M&S
SUBMITTED BY:
ANISH KUMAR
MBA M&S,SECTION-C
ROLL NO -21
(October2010)
CERTIFICATE
It is to certify that the work is original. The project
is submitted to Amity University and not to any
other institute or university.
Anish Kumar
Email-sanish.sinha29@gmail.com
310C21
CONTENTS
1. INTRODUCTION
2. HISTORY
3. CURRENT SCENARIO
Products and Services
• Mobile Ticketing
• Information Services
• Mobile Banking
• Mobile Browsing
• Mobile Purchasing
• Auction
4. FUTURE PERSPECTIVE
• Location Determination
• Biometrics
• WAP
5. INDIAN PERSPECTIVE
6. CONCLUSION
M-Commerce (Mobile commerce)
INTRODUCTION
Mobile Commerce, also known as M-Commerce or m-Commerce, is the ability
to conduct commerce using a mobile device, such as a mobile phone, a Personal
digital assistant PDA, a smart-phone, or other emerging mobile equipment such as
dash-top mobile devices. Mobile Commerce has been defined as follows:
"Mobile Commerce is any transaction, involving the transfer of ownership or rights
to use goods and services, which is initiated and/or completed by using mobile
access to computer-mediated networks with the help of an electronic device
The development of the cellular telephones and related personal handheld
communication devices is very interesting (particularly in the aspect of how this
increased communication has advanced commerce and economic activity by
lowering transaction, menu, distribution, and transportation costs).
M-Commerce lowers transaction costs by expanding the distance between buyer
and seller and the speed at which they can connect. They do not have to be in the
same city or even the same continent in order to complete their order or payment.
The buyer simply types their PIN into the keypad or signs the receipt after
whatever device is being used has verified the availability of the funds. This
method of commerce lowers menu cost (the cost of updating prices) by allowing
the seller or another interested party may conveniently update a website or some
other centrally-located information storage center and then that pricing information
can be instantly updated through satellite and network connections to the vast
majority of people who are interested in the relevant prices.
HISTORY
Mobile commerce was born in 1997 when the first two mobile-phone
enabled Coca Cola vending machines were installed in the Helsinki area
in Finland. The machines accepted payment via SMS text messages. The first
mobile phone-based banking service was launched in 1997 by Merita Bank of
Finland, also using SMS.
In 1998, the first sales of digital content as downloads to mobile phones were made
possible when the first commercial downloadable ringtones were launched in
Finland by Radiolinja (now part of Elisa Oyj).
Two major national commercial platforms for mobile commerce were launched in
1999: Smart Money (http://smart.com.ph/money/) in the Philippines, and NTT
DoCoMo's i-Mode Internet service in Japan , I-Mode offered a revolutionary
revenue-sharing plan where NTT DoCoMo kept 9 percent of the fee users payed
for content, and returned 91 percent to the content owner.
Mobile-commerce-related services spread rapidly in early 2000. Norway launched
mobile parking payments. Austria offered train ticketing via mobile
device. Japan offered mobile purchases of airline tickets.
The first conference dedicated to mobile commerce was held in London in
July 2001.
The first book to cover mobile commerce was Tomi Ahonen's M-profits in 2002.
The first university short course to discuss mobile commerce was held at
the University of Oxford in 2003, with Tomi Ahonen and Steve Jones lecturing. As
of 2008, UCL Computer Science and Peter Bentley ran dedicated courses in
mobile commerce.[2]
PDAs and cellular phones have become so popular that many businesses[specify] 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 are working
with carriers such as AT&T Wireless and Sprint to develop WAP-enabled
smartphones. Smartphones offer fax, e-mail, and phone capabilities.
"Profitability for device vendors and carriers hinges on high-end mobile devices
and the accompanying killer applications," said Burchett.[who?] 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 , mobile commerce has moved away from SMS
systems and into actual applications. SMS has significant security vulnerabilities
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.
CURRENT SCENARIO
The expectations for mobile commerce products and services is coloured by the
hype generated by various consulting companies. The reports published show
inflated growth figures in markets-to-be for unlikely mobile commerce products
and services. In order to focus serious research and development work it will be
necessary to build a good methodology and to find sound and solid market
estimates.
IAMSR in co-operation with HHL, ENPC (Paris), City University of Hong Kong,
North Carolina State University and Nankiang Technological University of
Singapore has in 2001-2002 carried out a series of surveys of expert companies
(the sample in each country was 50 companies) in search of potential mobile
commerce products and services, possible business models and most promising
markets. The results are interesting and can be used as a basis for a focused effort
to build market scenarios.
Market scenarios can be built with a scanning and scenario agent technology
developed by IAMSR as part of the Imagine21 project [E28732 (ESPRIT)]. The
agents work from a hyperknowledge platform residing on a secure server at
IAMSR. The material to be collected is selected on the basis of a scenario
storyline, which has been constructed on the basis of insight in mobile commerce
products and services built through the expert surveys conducted in 2001. The
scanning agents work on a 24/7 basis and may be activated to scan tens or
hundreds of data sources and will deposit the take into a data warehouse. The
scanning agents have filters to screen out irrelevant material and are built to
retrieve only new material from scanned data sources. The scenario agents extract
material from the data warehouse and update the scenario reports semi-
automatically. The partners of the research consortium have identified the best data
sources in each country. The main data sources used so for are Reuters Business
Briefing (now replaced by Factiva) and Economist On Line for overall market
reports. The combination of surveys of expert companies and the market scenarios
outlines the future mobile commerce markets in terms of products and services.
The first results of this work will undoubtedly serve to shape the m-commerce
vision in the future.
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
Stock quotes
Sports scores
Financial records
Traffic reporting
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 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, 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[when?] mobile reverse auction solutions have grown in
popularity.[by whom?] Unlike traditional auctions, the reverse auction (or low-bid
auction) bills the consumer's phone each time they place a bid. Many
mobile SMS 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 browser on a mobile device—
customers can shop online without having to be at their personal computer.
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. Some
merchants provide mobile websites that are customized for the smaller screen and
limited user interface of a mobile device.
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.
FUTURE PERSPECTIVE
LOCATION DETERMINATION
Location determination is seen to be an indispensable feature for mobile
commerce. Network-based positioning is carried out by terrestrial systems through
various techniques, such as cell of origin, time of arrival, angle of arrival, and
enhanced observed time difference. The device-based positioning is carried out by
satellite systems typically using three or four MEO satellites, also known as GPS.
However, a hybrid approach delivering the accuracy of device-centric option,
while avoiding a line-of-sight requirement as well as increased cost, size, and
power consumption, is also used. Though FCC does not require the mobile
network operators to use a specific technology, it has indicated specific
performance metrics for location-enabled technology. For network-based
technology, location information accuracy is required to be within 100 meters 67%
of the time and within 300 meters 95% of the time [27]. But for the device-centric
technology, these distances must be halved. In view of possible launches of LEO
satellites and the significant increase in the processing capabilities of the wireless
devices, as well as the fact that the cell sizes are shrinking from macro to micro to
pico, the location-based technologies are expected to become more accurate and
less costly in the future
Biometrics
Biometrics as an essential security measure will play an imperative role in the next-
generation m-commerce services. Traditionally, most security systems authenticate
the user based on something that he/she knows, such as a password. However,
where security really matters, it makes sense to add a second layer, which could be
something that he/she has (e.g., a smartcard). Also, as a third option, and probably
the most authentic method, could be something that he/she is, something that, at
least theoretically, would be virtually impossible to forge. Biometric control
measuring physical characteristics and behavioral patterns will be widely
employed to allow the user to access his/her own wireless device, to enable the
user to access certain places, and to allow the user to monitor assets. Of course,
depending on their effectiveness, cost, intrusiveness, and accuracy, more than one
biometric controls may be simultaneously employed. Biometric control may
include finger imaging, palm print, hand geometry, iris and retina vascular pattern,
facial recognition and thermography, signature and handwriting, key stroke
dynamics, and voice recognition and speech patterns
INDIAN PERSPECTIVE
In India, Mobile Commerce is still in the development phase as the use of mobile
phones for carrying out transactions is very limited. However, the development is
taking place at a nice speed and in the coming years, Mobile Commerce is most
likely to make its presence feel as companies and businesses have started
understanding the benefits of Mobile Commerce.
Some of the companies have even incorporated this technology. Airtel, ICICI,
Reliance are some of the companies/businesses that are using this technology as
their users are allowed to make limited purchases from their phones. For now, the
users are mainly allowed to pay phone bills, utility bills, book movie tickets, book
travel tickets with their cell phones. However, more services will be introduced in
coming years. Security is one of the main concerns of Mobile Commerce as it’s
very important to offer secure transactions and this is the reason why Mobile
Commerce is still in the development phase in India.
For now, users are mainly allowed to do Mobile Banking i.e. to access the bank
account with a cell phone in order to pay the utility bills. With the current rate of
development, users will be soon allowed to purchase products, advertise, to take
part in auctions and pay bills with the help of a cell phone, while they are on the
move. Mobile commerce, which in India has been limited primarily to basic
banking transactions, purchase of travel tickets and payment of some utility bills, is
finally taking off with banks, cellular operators and payment service providers
coming together to find solutions that comply with regulatory guidelines.
Security, a prime concern with banking regulators, has been a hindrance to the
growth of mobile commerce services such as the so-called mobile wallet, which
helps make payments at retail outlets through text messages or Internet-enabled
phones.
The Reserve Bank of India, for one, had issued guidelines against creation of the
mobile wallet, a derivative of a phone firm’s master bank account, from which
millions of subscribers can be served on their mobile phones.
Californian mobile payment service provider Obopay Inc. and Bangalore’s mChek
India Payment Systems Pvt. Ltd are among a fast-expanding breed of mobile
payment service providers which have planned offerings that work within the
guidelines and bring the convenience of mobile transactions.
Obopay, for instance, has a debit card-like model in place. “Here, the wallet is not
created, but the (customer’s) bank account itself is linked with the mobile phone,”
says Balachandran Unni, vice-president, business development and
alliances, Obopay Payment Services Pvt. Ltd, the local unit of Obopay Inc. The
firm offers mobile wallet-based transactions in the US and plans to launch the bank
account-linked services in India, too. “Respective banks with whom we have
partnered will be launching this in three to four weeks,” says Unni.
Western Union typically charges customers around $4, or about Rs158, to transfer,
say, $1,000 from Dubai, which is considerably less than the cost of a bank transfer:
$15 to send $1,000 from, say, the US and other countries. Mobile payment service
providers won’t say exactly how much, but transfers through mobile phones are
expected to lower the transaction costs.
MChek India, meanwhile, is looking a broader reach for its offerings. It plans to
launch payment solutions for common-day uses such as paying auto or taxi fares
through mobile phones. The application can transfer small amounts from one bank
account to another via the mobile phone.
“Auto and taxi drivers could never take electronic payment, so it will bring a
complete breakthrough,” says Sanjay Swamy, chief executive of mChek, which
provides such facilities for retailers in Sri Lanka and has done trial runs for the
service with taxi drivers in India. The service is expected to launch later this year.
Another Bangalore mobile content service provider, OnMobile Global Ltd, which
concluded an initial share sale recently, plans to offer customers the option of
topping up prepaid accounts of a limited number of people. “We have worked with
a couple of banks; we are going to launch this with one or two operators in three to
six months,” says a spokesperson of OnMobile, a spin-off from software giant
Infosys Technologies Ltd.
Banks in India have already started tapping this market with ICICI Bank Ltd, the
country’s largest private lender, making all of its Internet banking service available
on mobile phones from early January.
“For the first two-three months we are looking for 30,000-50,000 customers; then
we will scale it up,” says Manindra Juneja, head of mobile commerce business at
ICICI Bank. “Because of the convenience and the way the mobile network is
spread across the country, it will quickly gather the speed,” he added.
There are more than 220 million wireless subscribers in India—a market that adds
more than six million customers every month.
Bharti Telesoft Ltd, a software products and solutions provider to mobile operators
and a subsidiary of Bharti Enterprises Ltd, which controls India’s largest mobile
phone services firm, Bharti Airtel Ltd, is working on providing solutions for
microfinance operations, especially in data collection work.
The company, whose technology runs mobile commerce offerings of phone firms
in France and Egypt, plans to help microfinance firms update their data which, in
turn, will help in collecting funds from remote areas using mobile phones. “This
will help microfinance companies improve their efficiency for data entry by 15-
20%,” says Ashish Desai, its vice-president for mobile commerce.
Mobile commerce (m-commerce) is taking off in India, and one of the companies
leading the way is PayMate, a Mumbai-based wireless-transaction platform
provider. It is not surprising that India has become a thriving center for m-
commerce. The Telecom Regulatory Authority of India reports that the number of
mobile subscribers has already reached 185 million, far surpassing the country’s 9
million online customers.
Ajay Adiseshann, managing director and founder of PayMate, says his country is
leapfrogging the internet revolution and going straight to the mobile experience.
“The first experience people will have of digital shopping, or e-shopping, will
probably not be over the internet but rather on the mobile,” he says. “That is where
the opportunity lies, and that is why businesses are now looking at the mobile
phone as the next channel for providing their services to customers.”
PayMate launched its payment service last year, after spending two years
developing an “ecosystem” that connects banks, retailers and customers using
SMS. The service has been recognized both in India and abroad for its simplicity
and ease of use. It works like this: You register for PayMate with your bank by
calling or sending a text message. Once your phone number has been verified by
the bank, you are given a unique personal identification number (PIN) that you use
whenever you make a payment online, through your phone or over the counter.
PayMate’s ecosystem has more than 3000 retailers in various categories; to make a
purchase, all you have to do is share your phone number. You then instantly
receive an SMS from the retailer asking for authorization of payment, which you
do with your PIN and by reentering a code sent in the SMS. Once you reply to the
SMS, your bank confirms the details and debits the amount from your account,
sending both you and the retailer an SMS confirming the purchase. The service
works with any phone and is free of charge. The only cost is the SMS, which, in
India, means an average of USD 0.05 (2 rupees).
People who sign up to PayMate usually use the service to buy items such as
flowers and movie tickets, but Adiseshann hopes they will use it for a lot more in
the future. “We are introducing the possibility for people to pay their utility bills
with their phone, and we anticipate that this will be a key driver from a user-uptake
perspective,” he says.
Another initiative that Adiseshann hopes will encourage people to use PayMate is
the introduction of the mobile airline ticket, or m-ticket. With the “FlyBuySMS”
service, launched in partnership with Kingfisher Airlines, all the customer has to
do is send an SMS, and then the details of all Kingfisher Airlines flights for the
dates specified will be sent to the mobile phone. To book a ticket, the customer
replies to the SMS with the preferred flight option. “You use this m-ticket to check
in at the airport,” Adiseshann says. “You don’t even have to go online.”
The next big thing for PayMate is to offer its service at restaurants, which means
people can use their mobile phones to pay for meals. “You receive an SMS that
you reply back to, the restaurant receives your payment, and you are free to leave,”
Adiseshann says. “You will also be able to use this for home deliveries and even
groceries, which means you don’t have to give out sensitive credit-card details over
the phone.”
Adiseshann is positive about the future of m-commerce but says innovation and
partnerships are needed to make it a viable payment option. “When you are
changing consumer behavior, you have to make it as simple as possible. That’s
what we have been working on and we are seeing the benefits of this now,” he
says.
India has a huge population of unbanked and unbankable population, given the vast
geography and infrastructural constraints which has resulted in less than 59% of
the total Indian population having access to any kind of banking services. With
electricity continuing to be a pressing challenge in many parts of rural India,
mobile forms the ideal device to access the common man living in the remote
villages of India.
Recognizing the need for financial inclusion and riding on the growing mobile
telephony penetration, the Reserve Bank of India issued the guidelines for mobile
banking transactions in October 2008 permitting banks to provide banking services
on the mobile phone, which is a step in the right direction. Of course, it is still up
to the banks to convert these guidelines into a secured framework prior to rolling
out their mobile banking services.
These guidelines were largely SMS based until recently when RBI relaxed the
norms allowing domestic remittances and funds transfers through mobile phone.
The domestic remittances market in India has a huge growth potential with over
30% Indians being migrants, working far away from their home town and can now
easily remit to their dependents in a secured manner. The new guidelines have
eased the domestic remittances/funds transfer process as the receiver no longer
needs to have a bank account and can simply collect cash at the nearest bank or its
agent's (ie, business correspondent) outlet upon producing the PIN received via
SMS and a valid ID proof.
Having said this, the entire gamut of banking services is yet to be offered on the
mobile phone, which will significantly fuel the growth and success of m-commerce
in India. While most banks are yet to develop their m-payment gateway, the need
for a robust m-payment gateway on the lines of the e-payment gateway, cannot be
undermined.
While, regulations and guidelines are being evolved by the policy makers, it is also
the assumed responsibility of banks and financial institutions to educate the
common man to this effect and build trust. Banks must also come forward and take
a bold step towards reducing the cost of transactions on mobile phones.
The role of media in making m-commerce a success can be broadly classified into
two: (a) in taking the issues of the 'value creators' viz, content developers, telcos,
etc, and getting them heard by the regulators/government. This is a significant and
yet peculiar role, which only media can deliver, especially in the case of m-
commerce where the industry is evolving and policy makers by and large would
wait for the signals from the market players before they frame the guidelines.
Industry players need to come together to establish industry standards for m-
commerce transactions and as 'opinion builders', media has a well defined role to
play. This also calls for an unbiased approach and hence a responsible media alone
can deliver. (b) in creating the curiosity and confidence in the mindsets of the
consumers to trial and experience so that m-commerce becomes a 'cannot do
without it' or 'must have' service. This is critical for m-commerce, given the
dynamics of its vast geography and population and who better than the media can
reach the common man?
Government, Regulators and Policy Makers
The impact of the global recession and economic slowdown in the recent past was
minimal on India and Indian companies mainly because of our regulatory
framework, corporate laws and the existence of effective policy guidelines and tax
regime. Therefore, the role of a regulator and the regulatory framework cannot be
undermined more so for an evolving industry-m-commerce. While stringent laws
and guidelines have to be in place, there is nothing wrong if these are determined
as the market evolves.
Trai has done a yeomen service to the development and growth of Indian telecom
industry for we have a much evolved telecom industry at world's envy.
Regulations and guidelines are like medicines and have to be administered based
on the intensity and scale at the time of need. Typically, with m-commerce
growing, the mobile usage is only expected to grow. The government should also
consider, extending financial support to application developers, easing the tax laws
for service providers engaged in m-commerce and offering special tax rates for m-
commerce transactions.
CONCLUSION
Mobile phones have already forever changed how people interact in their daily
lives. There is no denial of the fact that majority of the population are ready to
embrace m-commerce and that mobile phones have a greater penetration than the
Internet in India.
When mobile phone was introduced not even the biggest telecom experts had
predicted the impact of SMS on an average Indian's life. From relationships to
reporting to just about every small communication is now textual. With m-
commerce, even payments and transactions are facilitated through SMS. The future
is here. The issues of physical presence at an outlet, access to the Internet, amongst
others are fast getting eliminated, giving the consumer the opportunity to transact
anytime, anywhere. As things progress we should see mobile phone becoming the
de facto commerce tool.