About a decade ago, eCommerce took the world by storm by allowing consumers to buy their favorite products online. With only a credit card and a click, shoppers can order items from groceries to electronics, all without leaving the comfort of their own home. Nowadays, with consumers constantly on the move, eCommerce must evolve in order to accommodate shoppers’ ever-changing lifestyles. This next generation in eCommerce is already on the horizon, and it is known as mCommerce.
Mobile commerce, or mCommerce for short, is any transaction that takes place on a mobile device, such as a cell phone or PDA. If you have ever downloaded a ring tone or wallpaper from your cellular provider, then you are already familiar with mCommerce in its simplest form. Typical payment methods for purchasing ring tones and wallpapers include charging the price of the download to the customer’s monthly bill, deducting the price from pre-paid calling credits, billing to a credit card linked to the mobile device’s SIM card, and billing a credit card through a secure interface. The latter method is expected to grow rapidly as mCommerce as a whole continues to grow.
Technology Behind mCommerce
The ability to interface with an electronic storefront through a mobile device is made possible through technology based on the Wireless Application Protocol (WAP). WAP’s main use is to enable access to the Internet through mobile devices. When you access the Internet through your cell phone, chances are you are using what is known as a WAP browser. In layman’s term, WAP is the standard that allows mobile users to browse the Internet on a smaller screen and with more simplified commands than a computer’s browser (for example, button input is used instead of mouse input).
Although the use of WAP browsers is on the rise worldwide, the use of these browsers for mobile commerce has been
slow to progress in the United States. European and Asian countries are further along in mCommerce development for several reasons, one of which is that more web-ready browsers are equipped on more phones in Europe and Asia than on phones in the United States. For example, in Japan, most phones are equipped with built-in bar-code readers, which enables consumers to scan a bard code from a magazine advertisement, which in turn launches the mobile device’s browser and delivers the consumer to the advertiser’s mCommerce storefront.
Although phone manufacturers, such as Nokia and Motorola, are working with providers in the United States to develop more WAP browser enabled phones, there is another important reason why mCommerce has been slow to gain acceptance in the United States. Security on mobile browsers is still shaky, and many Americans are hesitant to send their personal information into mobile space.
Security and Privacy Concerns
Currently, the main concern with privacy and security using mCommerce is a lack of mobile payment providers. When a consumer sends their money online, they are used to paying through an established provider, such as PayPal. Also, consumers are provided extra assurance that their payment is occurring on a secure site when they view the “lock” icon in the bottom of their browser. Many mobile devices do not utilize the same secure technology that is used on our computers.
Experts have suggested that mCommerce will not fully catch on until more mCommerce applications are developed that are dedicated solely to transferring payments over mobile devices. Facebook has already taken a step towards establishing its name in mCommerce by announcing a virtual mobile payment deal with Zong, an mCommerce payment service that allows customers to pay simply by entering their mobile number, as opposed to directly entering their credit card information. When a Facebook user purchases Facebook credits, they need only to enter their number, as their credit card information has already been stored and verified through Zong.
Mastercard is also making efforts towards making mCommerce more secure through their MoneySend service using Obopay. With Obopay, consumers are able to transfer money from their bank or credit card using only their mobile number, much like Zong. Obopay already powers Nokia’s new money transfer service, which allows customers to send money to other users via their mobile device, pay bills, and refill prepaid SIM cards. It is expected that having the Mastercard name behind this service will help to develop trust in mobile payments, but for now, this service is only launching in Asia and Africa.
The Future of mCommerce
Although mCommerce will give retailers the ability to sell to anyone, anywhere at anytime, more privacy and security standards must be set before the mCommerce sector can take off. With the development of smartphones which can handle applications, such as the iPhone and Blackberry, it is likely that more mCommerce applications will be developed and become more widely available to consumers.
eCommerce platforms are also starting to accommodate for the expansion into mCommerce. Magento, for example, provides a free iPhone store template for businesses looking to expand into the mobile market. Developers are also working on iPhone templates for osCommerce storefronts as well.
Even though mCommerce must still gain acceptance in order for more consumers and retailers to take advantage of this emerging market, sellers who set up an mCommerce-friendly storefront now will find themselves ahead of the game when the mCommerce wave finally hits. mCommerce is here to stay, and its future is looking bright worldwide.
Melissa likes the Web and building things that live there. We ask her to do something, she disappears for a while, comes up with an intelligent design, then builds a Web site around that design that will not only do her bidding, but will do the bidding of their new owners. Over the past few years she has worked on (often single-handedly) the design, production and launch of 100s of websites. She usually does this quietly, efficiently, and with a smirk that makes everyone else wonder what she's up to. And, if you ask her nicely, she might also agree to design a tattoo for you, although that will have to wait until after work.