A

PRESENTA
TION ON
M-COMME
RCE

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 What is Commerce
✔Commerce is a division of trade or production which

deals with the EXCHANGE OF ECONOMIC VALUES

from producer to final consumer.

✔It comprises the trading of economic value such as

goods, services, information, or money between two or

more entities.

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✔ M-commerce is the buying and selling of goods
and services through wireless handheld devices.
✔ M-Commerce is the process of paying for services
using a mobile phone or personal organizer.
✔ Use of mobile devices to-
1. Transact.
2. Communicate.
3. Entertain.

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Is the ability to conduct commerce using a mobile
device.
such as
Mobile phone.
PDA,smart phone

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M-commerce
=
E-commerce
+
Wireless
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 Mobile Commerce Services were first delivered 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.
The M-Commerce server developed in late 1997 by
Kevin Duffey at Logica.
Since the launch of the iPhone, mobile Commerce has
moved away from SMS systems and into actual
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 Mobile Commerce from the Customer‘ s point of view
✔ The customer wants to access
information, goods and
services any time and in any
place on his mobile device.
✔ He can use his mobile device
to purchase tickets for events
or public transport, pay for
parking, download content
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and even order books and
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 Mobile Commerce from the Provider`s point of view
✔ The future development of the
mobile telecommunication
sector is heading more and
services. Analysts morethat
forecast towards half
value-added
of mobile
soon
operators‘ will be earned through mobile
revenue
✔ Innovative service scenarios will be needed that meet the
Commerce.
customer‘s expectations and business models that satisfy
all partners involved.
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✔ M-commerce and E-commerce are business
transactions done online.

✔ M-commerce stands for Mobile Commerce

while E-commerce stands for Electronic
Commerce.

✔ M-commerce uses mobile devices for

commercial transactions while E-commerce
uses Computers.
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✔ M-commerce is available anyplace you go,
even if there is no Internet. For E-commerce,
you still need to go to a place where there is
Internet to access your online transactions.

✔ M-commerce is very handy and easy to carry

while E-commerce you cannot always bring
with you ,your computer or laptop anywhere.

✔ M-commerce however is costly compared to

E-commerce.
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0
Ubiquity
Convenience
Interactivity
Personalization
Localization

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 Ubiquity—easier information access in
real-time
Convenience—devices that store data and
have Internet, intranet, extranet
connections
Instant connectivity—easy and quick connection to
Internet, intranets, other mobile devices.
Personalization—preparation of information for individual
consumers
Localization of products and services—knowing where the
user is located at any given time and match service to them.

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User:-
User is defined as a person who is authorized to use his
Personal Trusted Device (PTD). Every user of M-Commerce is
associated one or more PTDs. Users of m-commerce can be
divided into two main categories:
End users or system users: Retail subscribers of mobile
phone services who uses mobile phones for commercial
activity comes under this category. Here the benefit or the
end-result is received by the subscriber.
Suppliers: In this category the end-result or benefit is
obtained by an organization that utilizes M- Commerce for
increasing the productivity and efficiency of its activities.
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Network Operators:-
Network operators offer the transport facility for data to
pass across from the end-user to the destination and
vice-versa. Operators enable this by providing network
infrastructure with technologies such as GSM, GPRS
and 3G.
Service Providers:-
Service providers typically involve in activities that
develops new services on the common platforms
providing standardized functional interface to
application developers, and utilizes the network
infrastructure provided by the Network Operator to
provide the data in a consistent and user-friendly format
for the end-user.
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Content Providers:-
Content providers aggregate mobile device content
from different sources. They also link up with
Commerce Mediators to handle the payment activities.
Commerce Mediator:-
Any organization that provides payment solutions or
services comes under this category. These
organizations act as mediators between content
providers and financial industry. This category also
includes firms providing security solutions for
payment.

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Finance Organizations:-
Any commercial transaction on a media requires
framework and infrastructure to complete it with
payment for the item transacted on. Financial industry
has unique positioning and role in M- Commerce value
chain. It provides necessary facility to carry out such a
transaction.
PTD:-
For M-Commerce, the mobile phone is regarded as a
user centered Personal Trusted Device (PTD). The
mobile phone is small, personal, familiar, secure and
available at all times. As a PTD, the mobile phone will
be able to handle all transaction-related functions in
both the online world and the physical world.
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This PTD may include mechanisms for user
verification, an area for secure key
storage and cryptographic processing, a
certificate database, and a transaction
database.

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 Apps Contents
Application developer Content providers Other service
Equipments Equipments providers.
Contents
Eqiupment vendors Transaction
request
Wireless service
providers
transaction
response
App info.
Eqipuments
Users

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 ✔ Mobile ticketing

✔ Mobile Money Transfer

✔ Content purchase and delivery

✔ Information services

✔ Mobile banking

✔ Mobile Browsing

✔ Mobile Purchase

✔ Mobile marketing and advertising

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 ✔ Mobile Ticketing is the process where the customers
can order, pay for, obtain and validate tickets from
any location and at any time using Mobile phones .

✔ Tickets can be booked and cancelled on the mobile

device with the help of simple application downloads.

✔ Delivery of tickets to mobile phones can be done in

the form of a SMS or by a MMS.

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✔Mobile Tickets can be purchased in a variety of
ways including online, via text messaging or in a
secure mobile application.

✔Mobile Ticketing is used in many applications like:

1.Airline ticketing

2.Cinema ticketing

3.Railway & Bus ticketing

4.Concert/Event ticketing

5.Consumer voucher distribution

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 Benefits to the ticket buyer

✔ Instant delivery of mobile tickets at thetime of

purchase.

✔ Individual mobile tickets can be forwarded to a friend.

✔ Quicker entry with no waiting in lines.

Benefits to the Event organizer

✔ Reduced will call lines and staffing.

✔ Guaranteed security, only one entry per barcode.

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✔ Event is 'greener' with reduced paper
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✔ Mobile Money Transfer refers to payment services

which are performed by using a mobile phone.

✔ By using this service we can transfer money from one

person to other by using a mobile phone.

Ex: ICICI bank has started IMPS - Interbank Mobile

Payment Service. It is an interbank electronic instant
mobile money transfer service through mobile phones.

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✔ 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.

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 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

✔Traffic reporting

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✔ 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, receive
notifications, transfer money to other banks.

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 Mobile Banking Services are:
1.Mini-statements and checking of account history

2.Checking the balance

3.Recent transactions
4.PIN provision, Change of PIN and reminder
over the Internet

5.Cash-in, cash-out transactions on an ATM

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✔ The location of the mobile phone user is an important

piece of information used during Mobile Commerce or

M-Commerce transactions.

✔ Knowing the location of the user allows for location-

based services such as:

1. Local discount offers

2. Tracking and monitoring of people

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✔ Some merchants provide mobile websites that are
customized for the smaller screen and limited user
interface of a mobile device.

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✔ Mobile marketing is
highly responsive sort
of marketing campaign,
especially from brands’
experience point of
view.
✔ Corporations are now
using M-Commerce to
expand everything from
services to marketing
and advertisement.
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✔ Types of M-marketing and
advertising:
• Mobile Web Poster
• SMS advertising
• MMS advertising
• Mobile games
• Mobile videos
• Audio Advertisements

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✔ The voucher, coupon, or loyalty card is represented by

a virtual token that is sent to the mobile phone.

Presenting a mobile phone with one of these tokens at
the point of sale allows the customer to receive the
same benefits as another customer who has a loyalty
card or other paper coupon/voucher.

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 Entertainment Communications
• Music
• Short Messaging
• Games
• Multimedia Messaging
• Graphics
• Unified Messaging
• Video
• e-mail
• Chatrooms
• Video - conferencing
M- commerce
Transactions Information
• News
•Banking
• City guides
•Broking
• Directory Services
•Shopping
• Maps
•Auctions
• Traffic and weather
•Betting
• Corporate information
•Booking & reservations
• Market data
•Mobile wallet

•Mobile purse

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 ✔ Consumers can use many forms of payment
in mobile Commerce. They are:

1. Premium SMS / Premium MMS transaction.

2. Direct Mobile Billing.

3. Mobile WAP.

4. Macro payment and Micro payment Services.

5. Mobile Wallet.

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 In the predominant model for SMS payments, the
consumer sends a payment request via an SMS text
message or an USSD to a short code and a premium
charge is applied to their phone bill. The merchant
involved is informed of the payment success and can
then release the paid for goods.
Some mobile payment services accept “Premium
SMS payments." Here is the typical end user payment
process:-
1.User sends SMS with keyword and unique number to
a premium short code.
2.User receives a PIN (User billed via the short code
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 3. User uses PIN to access content
or services.
Inhibiting factors of Premium SMS include:-
Poor reliability - transactional premium SMS payments
can easily fail as messages get lost.

Slow speed - sending messages can be slow and it can

take hours for a merchant to get receipt of payment.
Consumers do not want to be kept waiting more than a
few seconds.

Security - The SMS/USSD encryption ends in the

radio interface, then the message is a plaintext.
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4. High cost - There are many high costs associated with
this method of payment. The cost of setting up short
codes and paying for the delivery of media via a
Multimedia Messaging Service and the resulting
customer support costs to account for the number of
messages that get lost or are delayed.

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 The consumer uses the mobile billing option during
checkout at an e-commerce site to make a payment.
After two-factor authentication involving a PIN and
One-Time-Password (often abbreviated as OTP), the
consumer's mobile account is charged for the
purchase.
It is a true alternative payment method that does not
require the use of credit/debit cards or pre-
registration at an online payment solution such as
PayPal, thus bypassing banks and credit card
companies altogether. This type of mobile payment
method, provides the following benefits:
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✔ Security - Two-factor authentication and a risk

management engine prevents fraud.

✔ Convenience - No pre-registration and no new mobile

software is required.

✔ Fast - Most transactions are completed in less than 10

seconds.

✔ Proven - 70% of all digital content purchased online in

some parts of Asia uses the Direct Mobile Billing method

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 ▪The consumer uses web pages displayed or
additional applications downloaded and installed
on the mobile phone to make a payment. It uses
WAP (Wireless Application Protocol) as
underlying technology.
▪Benefits include:-
1.Follow-on sales where the mobile web payment can
lead back to a store or to other goods the consumer
may like. These pages have a URL and can be
bookmarked making it easy to re-visit or share.
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2.High customer satisfaction from quick and
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 Macro payments:
✔This kind of payments is used by

traditional electronic Commerce and

they usually involve for large
amounts transactions.

✔Payments by credit cards are the

most common method for Macro

payments.
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 ✔ These usually involve for lesser amounts which are

too small to be economically processed by credit

cards.

✔ The amounts are usually charged to user’s phone

bills.

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 ✔ A mobile wallet based payment strategy deals with
how, where and when the payments can be accepted
and processed using the user’s wallet accounts.
✔ A mobile wallet payment option includes the
following:
• Prepaid – Here the users top up their mobile wallet
accounts upfront and such mobile wallet accounts are
used to make the payments in context of the mobile
sales transactions.

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 • Post-paid – In this case, a user’s mobile wallet
account is linked to his or her carrier billing account.
The mobile sales transactions are paid with the user’s
mobile wallet account, which in turn is charged to the
associated mobile billing account that is usually paid
on a monthly or quarterly basis.
• Card linked mobile wallets – In this mobile wallet
strategy, the mobile wallet accounts are linked to
user’s debit or credit cards. In a mobile sales
transaction, with card linked mobile wallet payment,
the final payment is made from the wallet account
that is linked to user’s cards.

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✔ Security:-
There are security issues at several levels:-
Data Security: One of the concerns is the data security
among the different entities. There are no standard
interfaces which have been defined till now. This has
slowed down the developments in these areas.
Device Security: A Personal Trusted Device has limited
liability for a subscriber. The question is, if a user can
use someone else’s phone (he pays the browsing costs)
but pays for the purchase of goods/services. SIM is a
legal identity, as the subscriber signs a contract with the
operator.
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The operator owns the card (like a bank card is owned
by the bank). If the equipment cannot be legally used by
multiple people, then this would put a restriction on the
popularity.
Service Security: Additional security features apart
from what is provided by the standard protocols are
needed for commercial organizations and other entities
to entrust their applications on mobiles. For e.g., banks
want personal devices with a second control (e.g. a PIN
number) to ensure that the person who pays can confirm
his willingness to pay the amount displayed/negotiated.

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Usability
small size of mobile devices (screens, keyboards,
Problem
etc).
limited storage capacity of devices.
hard to browse sites.
Technical Limitations
lack of a standardized security protocol.
insufficient bandwidth.

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✔ Technology Growth:-
Perceived Security: Perceived security is important for
success of M-Commerce. People are willing to give a
credit card in a restaurant but will not pay by card over
internet. This would reflect more in the case of M-
commerce where the user gets lesser information
compared to internet. However, mobile phone is more
secure than a PC and hence require lesser security
systems.
Security Overhead for M-Commerce security: Initial
systems must be highly conservative in terms of security
overheads for transactions. 5
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 Already these type of solutions have been introduced in
the market. The Telenor solution uses SMS or a data call
as a bearer to send authentication (PKI certificates) from
a mobile to a server (concatenated SMS messages).
✔Variations in security policies:-
Different security policies have to be formulated
according to scenarios. For e.g., for “small
payments” using a mobile device, an user would not
like to tolerate a long authentication procedure. For
large payments (e.g. airline tickets), a more
comprehensive security system would be appropriate.

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✔ M-commerce using wireless technology:-
There is an increasing tendency to associate M- commerce
with mobile technology alone. There is a definite roll for
fixed wireless systems like WLAN and also short-range
communication systems like a Bluetooth protocol
device.
✔ Development of applications:-
Hence applications needs to be created for two categories of
users:
Users having low bit rate connectivity or narrow band
connectivity: All 2G mobile users would come in this
category. For e.g., a GSM end-user can obtain a data rate of
upto 9.6kbps.

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 Broadband mobile connectivity: This category would
involve all 2.5G and 3G users. The data rate of this
category of users would vary between 20kbps to 365kpbs
depending on the technology and network.
✔ Opportunities:-
M-Commerce offers highly lucrative opportunities for all
entities in telecom sector. Some of the key opportunities
are listed below. These have to be communicated so as to
develop interest and motivation for organizations to
contribute to the development of M-Commerce-
Network Operators: With increase in data traffic, there
would be increased efficiency in the network. This can be
catered to by the current systems. Mobile operators can
also provide technical support for financial services
across their network.

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Equipment Vendors: With increase in data traffic
there is more demand for upgrade and next
generation products. This would trigger development
of more innovative products which could handle data
traffic more efficiently.

Service Providers: M-commerce provides an

opportunity for service providers to move up the
value chain by providing data and commerce
applications. This also opens up a new value chain
for service providers.
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Financial Sector: There is increased for financial
institutions and banks that can provide additional
services and also expand their reach. It also give more
opportunities for other related organizations to assume
additional roles of a Commerce mediator.
Billing and Customer care vendors: New billing systems
and customer care systems are required for the new
systems developed. There is a Herculean task of
developing highly efficient billing systems for the
equipments.
Other wireless equipment vendors: WLAN and short
term wireless vendors can find new applications for their
products. This would increase the usage and hence boost
the industry.
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