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M-COMMERCE Md. Rashedul Hasan. The Wireless Revolution We are seeing a widespread convergence in wireless technology and the services it offers. If content.

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Presentation on theme: "M-COMMERCE Md. Rashedul Hasan. The Wireless Revolution We are seeing a widespread convergence in wireless technology and the services it offers. If content."— Presentation transcript:

1 M-COMMERCE Md. Rashedul Hasan

2 The Wireless Revolution We are seeing a widespread convergence in wireless technology and the services it offers. If content can be digitized it can be transmitted over wireless networks. That includes voice, documents, photographs, music, movies, television shows, you name it. Why should we wait to show pictures of our vacation until we get home when we can instantly transmit them over the Internet via a photo- equipped cell phone? Why can't we take a thousand songs loaded on a wireless device with us wherever we go?

3 Business Value of Wireless Networking IBM provided its sales force with mobile computing appliances, sent them out on the road to get closer to customers, and completely closed one of its major office buildings. Not only did it save the cost of housing all the employees but it increased sales. Wireless devices are not limited to computers and cell phones but include telematics such as global positioning systems and handheld computing devices that can instantaneously track products and provide data to the company inventory network,

4 MOBILE PHONE – A NEW WAY TO CONQUER There are over 3 billion mobile phones worldwide. This means that over 40% of the world’s population carries a mobile phone, far more than use a computer or have access to the internet. In many developed countries, mobile phone penetration is above 90% and developing countries are catching up fast. Closer, more personalized relationships between businesses and consumers are possible via mobile phones.

5 MOBILE PHONE – A NEW WAY TO CONQUER During the second quarter of 2008, a typical U.S. mobile subscriber placed or received 204 phone calls each month. The average mobile customer sent or received 357 text messages per month. 450% increase over the number of text messages circulated monthly during the same period in million people are using their handsets to go online at some point during a given month, representing 71% growth over last year. In addition, the number of users with daily Internet access has more than doubled from 2008 due to the availability of mobile internet access. Data Released February 7, 2009 Source: Nielson Wire

6 Cellular Network Standards and Generations Two major standards used in the world are: Global System for Mobile Communication (GSM): bandwidth is based on time division multiple accesses and is used in Europe, China, and Asia, and some regions of the United States. GSM communications is the most popular standard for mobile phones in the world. Its promoter, the GSM Association, estimates that 82% of the global mobile market uses the standard. Over 2 billion people use GSM phones across more than 200 countries and territories. Its ubiquity makes international roaming very common between mobile phone operators, enabling subscribers to use their phones in many parts of the world. Code Division Multiple Access (CDMA): transmits over several radio frequencies and randomly assigns users to a range of frequencies over time. It is used mostly in the United States.

7 Cellular Generations We can allocate generational labels to wireless phone systems. A short review of their characteristics may help you distinguish among them: First generation (1G): first appeared in the 1980s and were analog based. Mostly supported only voice transmissions. Second generation (2G): appeared in the 1990s and supported better voice quality and short message services. Interim generation (2.5G): appeared in the late 1990s and early 2000s and provides increased data transmissions based on the 2G technology. It's an interim fix until 3G technology is more fully refined. Third generation (3G): appeared in the early 2000s and are based on packet-switch technology that allows large amounts of data transmission. Supports voice, video, and graphics

8 MOBILE COMMERCE: BEYOND E-COMMERCE Businesses took the opportunity to automate many processes that before would have been handled manually, from ordering to customer service. One clear example is the way that spending on advertising has begun to shift from traditional off-line media to online and digital media as advertisers have seen an opportunity to better connect with their target audience. IBM forecasts 22% growth in mobile, digital and interactive advertising formats between 2006 and 2010 against 4% growth in traditional advertising formats.

9 Example – Banner Ad

10 DEFINE M-COMMERCE Mobile Commerce, also known as M- Commerce or mCommerce, is the ability to conduct commerce using a mobile device, such as a mobile phone, a Personal Digital Assistant (PDA), a smartphone or other emerging mobile equipment such as dashtop 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."

11 THE ADVANTAGES OF M- COMMERCE 1- Providing wider reach. 2- Reducing transaction cost 3- Streamline business processes. 4- Competitive pricing. 5- Reducing time to order.

12 THE DISADVANTAGES OF M- COMMERCE 1- Small screens of most devices still limit types of file and data transfer (i.e. streaming videos, etc.) 2- WAP and SMS limited to small number of characters and text. 3- Use of graphics limited 4- Less functionality for mobile Internet over mobile phones and existing generation of handhelds than for mobile computers (laptops and next generation handhelds) 5- User interface is often difficult to learn how to use 6- Limited bandwidth 7- Limited roll out of higher bandwidth mobile networks and devices (i.e. 3g networks and wireless broadband networks are predominantly located in cities) 8- Cost of establishing mobile and wireless broadband infrastructure 9- Security of data moved across some mobile and wireless networks 10- Businesses investment in hardware and infrastructure is seen as riskier as rapid evolution of mobile and wireless technologies continues.

13 KEY ACTORS IN MOBILE COMMERCE ActorStakeholdersExpected roles ConsumersInteract with businesses through mobile CompaniesManufacturers Distribution / Wholesalers Logistics / Transporters Retailers Relevant applications, provide content and transact with consumers Mobile Industry & Service Providers Mobile Phone Manufacturers Mobile Network Operators/Carriers Service Providers (IT companies) Marketing Agencies Develop technology Device Data Source Network RegulatorsGovernment Agencies Standards Organizations Consumer / user associations Provide regulations, standards and guidelines

14 HISTORY First thought up by Matt Wilson. 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).

15 HISTORY Two major national commercial platforms for mobile commerce were launched in 1999: Smart Money (http://smart.com.ph/money/) in the Philippines, 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 paid for content, and returned 91 percent to the content owner.

16 HISTORY Mobile-commerce-related services spread rapidly in early Norway launched mobile parking payments. Austria offered train ticketing via mobile device. Japan offered mobile purchases of airline tickets.

17 M-COMMERCE SERVICES AND APPLICATION

18 BUSINESS-TO-CONSUMER APPLICATIONS 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 phones at the venue. Tickets can be booked and cancelled on the mobile device with the help of simple application downloads, or by accessing the WAP portals of various travel agents or direct service providers. 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 services to determine when the customer is nearby.

19 BUSINESS-TO-CONSUMER APPLICATIONS CONTENT PURCHASE AND DELIVERY Currently, mobile content purchase and delivery mainly consists of the sale of ring-tones, wallpapers, 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 transactions. Knowing the location of the user allows for location-based services such - Local discount offers - Local weather - Tracking and monitoring of people

20 BUSINESS-TO-CONSUMER APPLICATIONS 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.

21 BUSINESS-TO-CONSUMER APPLICATIONS 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 STORE FRONT ABI Research, predicting that in 2015, $119bn worth of goods and services will be purchased via a mobile phone. 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.

22 BUSINESS-TO-CONSUMER APPLICATIONS AUCTIONS Over the past three years mobile reverse auction 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 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.

23 BUSINESS-TO-CONSUMER APPLICATIONS 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. Advertising and promotional information is sent direct to mobile phones

24 Business-to-Business Applications ORDERING/RE-ORDERING Mobile phones are used to reorder products with orders sent to the supplier in a standard format By scanning a bar code on a product with a mobile phone and using a simple application to state quantity required, the owner of a small shop can automatically re-order goods. DELIVERY CONFIRMATION Mobile phones are used to report or retrieve information about the status of orders during the transport and delivery process STOCK CONTROL Mobile phones can be used to keep track of stock and send updates to a central database. By using a mobile phone to scan bar codes or RFID tags on products, employees are able to supply the business with real-time stock updates to their business.

25 Business-to-Business Applications SUPPLY CHAIN INFORMATION Information about the supply chain processes is available via a mobile device. By scanning an RFID tag with a mobile phone, anyone in the supply chain can check information about a product’s past and future states in the supply chain.

26 CATEGORIZATION OF M- PAYMENT SYSTEMS SOFTWARE ELECTRONIC COINS – Electronic money stored on the mobile in file format. In this case, monetary value is stored on the mobile device and the customer has full control of his/her money wherever he/she goes and whatever he/she does. An electronic coin is represented as a file containing, among other information, a value, a serial number, a validity period and the signature of the issuing bank. Since software electronic coins are easy to copy, the validity of an electronic coin depends on its uniqueness in terms of its serial number. The customer transfers electronic coins to the merchant, who forwards them to the issuing bank for the “double spending test.”

27 CATEGORIZATION OF M- PAYMENT SYSTEMS HARDWARE ELECTRONIC COINS Electronic money stored on the mobile device on a smart card. In this case, monetary value is stored on a secure hardware token, typically a smart card, in the mobile device. The presentation of electronic money 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 to get to the money, the customer’s smart card and the merchant’s payment server authenticate each other and a secure channel is set up between them. Then, electronic money can be transferred from one to the other. This approach is quite attractive because smart cards provide an additional level of mobility. That means the payment smart card can also be used in POS transactions. E.g., Geldkarte, Mondex and Barclay card.

28 CATEGORIZATION OF M- PAYMENT SYSTEMS BACKGROUND ACCOUNT Electronic money stored in a remote account at a trusted third party. Here, the money is stored remotely on an account at a trusted third party. Depending on the specific payment system, the account could be a credit card account, a bank account, or an account held at the network operator. For example, in some cases this data is sent in the clear (e.g. a credit card authorization) not providing any security against eavesdropping and in some cases this information is encrypted and digitally signed, providing anonymity to the customer (e.g. SET – Secure Electronic Transactions).

29 What do people do when they receive a mobile ad? 33% of Americans with mobile phones said they recalled seeing mobile advertising. Among those with iPhones, the figure was even higher, at 41 percent. Most of these ads were SMS text messages. One-third of those who recalled getting such ads said they "responded in some way," with the most common form of response being to call a toll-free number included in the message. Women were almost twice as likely as men to say they responded in some way to a mobile ad they'd received year olds were the most likely to report having done so. 1 in 7 people reported that they had bought a product or visited a store as a result of seeing a mobile advertisement.


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