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What’s Happening in Mobile Commerce?

January 15, 2010

Mobile-commerce has been touted as the next big thing for years. However the reality has failed to materialise. Or has it?

In years gone by whenever I talked to anyone about mobile commerce I often got the impression it would be more realistic to discuss the latest sighting of Nessie, unicorns or alien abductions. Most people believe it to be a myth.

Mobile commerce has been the next big thing for longer than I care to recall. I remember making some very grand claims in 1997 when WAP launched, that the wallet would be obsolete within years. However the reality has failed to materialise. So is the future for m-commerce bleak or is it the next big thing on the verge of taking off? Maybe it’s the Sinclair C5 of the internet.

Last week I was dashing for the Tube and realised I had left my wallet at home. Highly irritating and a complete show stopper, apart from honing my busking skills the only real alternative is to go home. It was this exact moment I understood the power of m-commerce.

Again another example was the time I was away from my computer and remembered that the eBay auction I had been tracking for weeks is ending and I’d forgotten to bid. If either of these situations sound familiar I have good news, there are already mobile commerce solutions that provide solutions to these situations.

In Asia the use of the “mobile wallet” is a reality. The Tokyo subway already allows for contactless payments akin to our Oyster cards. In Finland the mobile manufacturer Nokia is trialling RFID and Bluetooth instant payments. The idea is simple; your phone is connected to your bank or credit card. Then when you go shopping your phone uses contactless technology to pay for the goods. Quite amazingly for a new technology, a single framework has already been agreed. The next step is surely world-wide roll out?

According to Gartner, almost 500 million mobile transactions will occur in Asia during 2009. In the Philippines it’s easier, cheaper and faster to transfer money via text message. South Korea is the world leader in true multi-channel retail, allowing orders to be received in-store, online or via mobile and then sent to friends and family.

However, the West is finally catching up. Looking towards Silicon Valley it’s once again Apple showing the rest of us how m-commerce should work. While many people believe the iPhone revolutionised the mobile industry, it’s the surrounding eco-system that has transformed the company from hardware provider to media vendor. The iPhone app store currently has 70K apps available and 1.5bn apps have been downloaded, and paid for via a mobile device.

So, what’s next?

I believe the mobile is the ultimate ubiquitous device. The facts are obvious; a device that just a few years ago was only being used for making and receiving calls has morphed into a camera, media player, mobile office, wallet and more. What’s more, thanks to the investment of the carriers, advances in wireless connectivity, these devices are online 24/7, and UK penetration of phones is over 100% — more people have two or more than don’t have a mobile.

Starting with payments, how many times have you bought something online and wondered how safe the site you are using is? While the banking industry is pushing schemes such as PCI DSS, I can see a future involving the mobile. The vision is this. When you buy online the store contacts your bank for approval, and this is then sent to your mobile for confirmation.

That’s a completely disconnected device, separate hardware on a separate network. Without approval the payment is rejected. This would make online card fraud virtually impossible.
M-commerce may not be everywhere and it’s certainly not as wide spread as many predicted. However, its growth is being fuelled by the gradual adoption of pragmatic technical solutions to real problems. There are no flights of fancy or Alien abductions involved.

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