m commerce and its applications
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M-COMMERCE AND ITSAPPLICATIONS
Jul 03, 2009 • By Dr. R. Rajeswari • 5,888 ViewsCOLLEGE AND UNIVERSITY
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M COMMERCE AND ITS APPLICATIONS
Dr. (Mrs).R. RAJESWARI, Reader in Commerce,
Sri Sarada College for Women (Autonomous), Salem 16.
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INTRODUCTION
"Mobile Commerce is any transaction, involving the transfer ofownership or rights to use goods and services, which is initiated and/orcompleted by using mobile access to computermediated networks with the helpof an electronic device."
DEFINITION
"Mobile Commerce is the use of information technologies andcommunication technologies for the purpose of mobile integration ofdifferent value chains an business processes, and for the purpose ofmanagement of business relationships.”
Webagency, 2001
MOBILE DEVICES
Mcommerce is not just about using mobile phones as end user devices. Thefollowing list gives an overview of different kinds of mobile devices.
Mobile phonePDA (Personal Digital Assistant)Smart phonethe smart phone combines mobile phone and PDA technology intoone device.LaptopEarpiece (as part of a personal area network)MCOMMERCE VERSUS ECOMMERCE
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In comparison to ecommerce, mcommerce offers both advantages anddisadvantages. The following list summarises the advantages of mcommerce:
¨ Ubiquity: The use of wireless device enables the user to receiveinformation and conduct transactions anywhere, at anytime.
¨ Accessibility: Mobile device enables the user to be contacted at virtuallyanytime and place. The user also has the choice to limit their accessibility toparticular persons or times.
¨ Convenience: The portability of the wireless device and its functions fromstoring data to access to information or persons.
¨ Localization: The emergence of locationspecific based applications willenable the user to receive relevant information on which to act.
¨ Instant Connectivity (2.5G): Instant connectivity or "always on" isbecoming more prevalent will the emergence of 2.5 G networks, GPRS orEDGE. Users of 2.5 G services will benefit from easier and faster access to theInternet.
¨ Personalization: The combination of localization and personalization willcreate a new channel/business opportunity for reaching and attractingcustomers. Personalization will take the form of customized information, meetingthe users’ preferences, followed by payment mechanisms that allow for personalinformation to be stored, eliminating the need to enter credit card information foreach transaction.
¨ Time Sensitivity – Access to realtime information such as a stock quote
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that can be acted upon immediately or a sale at a local boutique.
¨ Security – depending on the specific end user device, the device offers acertain level of inherent security.
The following list summarises the disadvantages of mcommerce:
Mobile devices offer limited capabilities (such as limited display). Betweenmobile devices these capabilities vary so much that end user services will needto be customized accordingly.The heterogeneity of devices, operating systems and network technologies is achallenge for a uniform end user platform. For this reason, standardizationbodies consisting of telecommunication companies, device manufacturers andvalue added service providers integrate their work.Mobile devices are more prone to theft and destruction.The communication over the air interface between mobile device and networkintroduces additional security threats.AREAS / USES OF MCOMMERCE
In the current commerce industry, mobile commerce or MCommerce has beenentered in finance, services, retails, telecommunication and informationtechnology services. In these sectors, MCommerce is not only being widelyaccepted but also it is being more used as a popular way of business/commerce.
Finance SectorsTelecommunication SectorsService / Retail sectors
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The general mcommerce applications are:
1. Mobile ticketingTickets can be sent to mobile phones using a variety of technologies. Users arethen able to use their tickets immediately by presenting their phones at thevenue.
Tickets can be booked and cancelled on the mobile with the help of simpleapplication downloads or by accessing WAP portals of various Travel agents ordirect service providers. Mobile ticketing for airports, ballparks, and trainstations, for example, will not only streamline unexpected metropolitan trafficsurges, but also help users remotely secure parking spots (even while in theirvehicles) and greatly facilitate mass surveillance at transport hubs.
2. Mobile vouchers, coupons and loyalty cardsMobile ticketing technology can also be used for the distribution of vouchers,coupons and loyalty cards. The voucher, coupon, or loyalty card is representedby a virtual token that is sent to the mobile phone. Presenting a mobile phonewith one of these tokens at the point of sale allows the customer to receive thesame benefits as another customer who has a loyalty card or other papercoupon/voucher. Mobile delivery enables:
economy of scalequicker and easier deliveryeffective target marketing
privacyfriendly data mining on consumer behaviourenvironmentfriendly and resourcessaving efficacy3. Content purchase and deliveryCurrently, mobile content purchase and delivery mainly consists of the sale ofringtones, wallpapers, and games for mobile phones. The convergence ofmobile phones, mp3 players and video players into a single device will result inan increase in the purchase and delivery of fulllength music tracks and video.Download speeds, if increased to 4G levels, will make it possible to buy a movieon a mobile device in a couple of seconds, while on the go.
4. Location-based servicesUnlike a home PC, the location of the mobile phone user is an important piece ofinformation used during mobile commerce transactions. Knowing the location ofthe user allows for location based services such as:
local mapslocal offerslocal weatherpeople tracking and monitoring5. Information servicesA wide variety of information services can be delivered to mobile phone users inmuch the same way as it is delivered to PCs. These services include:
news servicesstock datasports resultsfinancial recordstraffic data and information
Particularly, more customized traffic information, based on users' travel patterns,will be multicast on a differentiated basis, instead of broadcasting the same newsand data to all Users. This type of multicasting will be suited for more bandwidthintensive mobile equipment.
6. Mobile BankingBanks and other financial institutions are exploring the use of mobile commerceto allow their customers to not only access account information, but also maketransactions, e.g. purchasing stocks, remitting money, via mobile phones andother mobile equipment. This service is often referred to as Mobile Banking or MBanking. More negative issues like ID theft, phishing and pharming are lurkingwhen it comes to mobile banking, particularly done on the mobile web. Netsecurity technology free from redundancy and paradigm shifts away from mobilewebbased banking will be an optimal solution to mobile banking in the nearfuture.
7. Mobile brokerageStock market services offered via mobiledevices have also become more popularand are known as Mobile Brokerage. They allow the subscriber to react tomarket developments in a timely fashion and irrespective of their physicallocation.
8. AuctionsOver the past three years Mobile reverse action solutions have grown inpopularity. Unlike traditional auctions, the reverse auction (or lowbid auction)bills the consumer's phone each time they place a bid. Many mobile PSMScommerce solutions rely on a onetime purchase or onetime subscription;
however, reverse auctions are high return applications as they allow theconsumer to transact over a long period of time.
9. Mobile purchaseMobile purchase allows customers to shop online at any time in any location.Customers can browse and order products while using a cheap, secure paymentmethod. Instead of using paper catalogues, retailers can send customers a list ofproducts that the customer would be interested in, directly to their mobile deviceor consumers can visit a mobile version of a retailer’s ecommerce site.Additionally, retailers will also be able to track customers at all times and notifythem of discounts at local stores that the customer would be interested in.
10. Mobile marketing and advertisingMobile marketing is an emerging concept, but the speed with which it's growingits roots is remarkable. Mobile marketing is highly responsive sort of marketingcampaign, especially from brands’ experience point of view. And almost allbrands are getting higher campaign response rates. Corporations are now usingmcommerce to expand everything from services to marketing andadvertisement. Although there are currently very few regulations on the use andabuses of mobile commerce, this will change in the next few years. With theincreased use of mcommerce comes increased security. Cell phone companiesare now spending more money to protect their customers and their informationfrom online intrusions and hackers.
PAYMENT METHODSThe main payment methods used to enable mobile commerce are:
premiumrate calling numbers,
charging to the mobile telephone user's bill orDeducting from their calling credit.Registration of a credit card that is linked to a Sim Card.CATEGORISATION OF MPAYMENT SYSTEMS
Most epayment systems are not suitable for use in a mobile context that is,using a mobile device and communicating over a mobile telecommunicationnetwork. This is due to the special characteristics of mobile devices and mobiletelecommunications. In the following, we categorise mpayment systemsaccording to the whereabouts of the customer’s money:
Software electronic coins – electronic money stored on the mobile in file format.Hardware electronic coins – electronic money stored on the mobile device on asmart card.Background account – electronic money stored in a remote account at a trustedthird party.Software Electronic Coins
In this case, monetary value is stored on the mobile device and thecustomer has full control of his/her money wherever he/she goes and whateverhe/she does. An electronic coin is represented as a file containing, among otherinformation, a value, a serial number, a validity period and the signature of theissuing bank. Since software electronic coins are easy to copy, the validity of anelectronic coin depends on its uniqueness in terms of its serial number. Thecustomer transfers electronic coins to the merchant, who forwards them to theissuing bank for the “double spending test.”
Hardware Electronic Coins
In this case, monetary value is stored on a secure hardware token,typically a smart card, in the mobile device. The presentation of electronicmoney is not important, as long as it is stored securely on the smart card. Electronic money could be represented as a simple numeric counter. In order toget to the money, the customer’s smart card and the merchant’s payment serverauthenticate each other and a secure channel is set up between them. Then,electronic money can be transferred from one to the other. This approach isquite attractive because smart cards provide an additional level of mobility. Thatmeans the payment smart card can also be used in POS transactions. E.g.,Geldkarte, Mondex and Barclay card.
Background Account
Here, the money is stored remotely on an account at a trusted thirdparty. Depending on the specific payment system, the account could be a creditcard account, a bank account, or an account held at the network operator. Forexample, in some cases this data is sent in the clear (e.g. a credit cardauthorisation) not providing any security against eavesdropping and in somecases this information is encrypted and digitally signed, providing anonymity tothe customer (e.g. SET – Secure Electronic Transactions).
KEY ISSUES OF MCOMMERCE
The success of MCommerce depends on:
Evolution: Technology and Business models are constantly evolving which willdemand flexibility and patience on part of all players.Customer loyalty: Who will ‘own’ the customer? Partnerships among players
from various industries will be necessary for most, if not all, mcommerceinitiatives, and, in turn, will alter the nature of any one company to own their owncustomers.Crosssector knowledge gulf, where the different parties will need to learnabout the functions and limitations of the services provided by the other players,for example, operators will need to know about content and applications.Moving up the value chain: To respond to market opportunities somecompanies have develop subsidiaries in order to react more rapidly to marketchallenges. For example, Sonera has developed Sonera Zed, to provide portaland application management services such as location based mobile yellowpages as well Smart Trust, to develop secure solution for mcommercetransactions. And Citicorp has established eCiti to develop a wireless accessgateway strategy for financial service providers.CONCLUSION
As mcommerce applications and wireless devices are evolving rapidly, one willtake forward the other one towards empowering innovation, versatility and powerin them. There are a number of business opportunities and grand challenges ofbringing forth viable and robust wireless technologies ahead for fully realizing theenormous strength of mcommerce in this Internet era and thereby meeting boththe basic requirements and advanced expectations of mobile users andproviders.
There are news articles and pictures displaying people, who are ordering thingsover the Internet while waiting for a bus, downloading merchant coupons on theirPDAs as they enter a store or bidding for the last table at a hot restaurant bydigital phone in a spurofthemoment auction. Actually this process represents atip of a very big iceberg. The advent of mcommerce, as widely referred to
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About the Author
Dr. R. Rajeswari
Dr. (Mrs).R. RAJESWARI, Reader & Head, Department of Commerce, SriSarada College for Women (Autonomous), Salem 16. (show bio)
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among the users, has farreaching implications. But there are many limitations inthe technologies that Once its relevant technologies get matured, widelyavailable and competent, the host of portable devices will be ready to handle thebigger transactional activities not envisioned so far successfully apart from theseminor activities. One of the main feature challenges will be to unify paymentsolutions, providing the highest possible level of security.
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