MOBILE or M-COMMERCE COMES OF AGE ?


What is mobile commerce you may well ask?   Well mobile payments comprise two categories – 1) payments for digital (virtual) goods usually done online and 2)  payments for physical goods usually done at a POS.   The latter usually being of larger transaction value.   So  when will we use our mobiles (in any real number) to make these day to day payments and also use them for online banking ?    My view is that this will be driven by both;  1) the adoption of  technologies like NFC by the handset manufacturers and the POS manufacturers and the merchants;  and 2)  the acceptance by users of these new technologies.    I suspect that the latter will take longer  - as people are naturally cautious about adopting new  technologies particularly when money is involved.

The major handset manufacturers have started building NFC chips into their handsets as the GSMA have finalized the specification for NFC on GSM phones.   Apple recently ‘leaked’ the news that the iPhone 5 will be NFC enabled and all the big names – Samsung/Nokia/Motorola/Ericsson/ZTE have announced NFC phones for launch this year.  Google are very optimistic about the prospects for mobile commerce. (http://www.mobilemarketingwatch.com/google-ceo-says-nfc-mobile-payments-will-prove-profitable-13258/) 

 Users will take a bit longer to get used to scanning their phones (not Oyster cards) at the readers on the Underground or at retail checkouts.    It is mainstream in Japan and will become the same in the rest of the World. (http://www.nma.co.uk/news/japan-leads-global-mobile-commerce-market/3023422.article)   The mobile device has become  (and will increasingly continue to become) the medium where we consume advertising now more focused and bespoke to our individual requirements.   Gaming manufacturers recognise the power of the mobile platform for their products and with the increasing trend towards social gaming have become another very important commerce layer on the mobile. 

Security is an issue.   Hackers have recognized that the adoption of mobile commerce is growing rapidly and they have turned their attention to this platform for the spread of malware, ID theft and online fraud.    However this will be a much bigger challenge for them because of the diversity of platforms (unlike in the desk/laptop world where 75% of Operating Systems are Microsoft).    Anti-virus software will be less important than appropriate authentication solutions which will enable trusted transactions to take place.    These solutions will of necessity need to be light weight and not require the user to interface with any additional physical devices like dongles/ card readers/ USB keys etc which proliferate in the desktop world.

Of course mobiles will be used for more than just banking – remittances, money transfer and voucher redemptions will become mainstream.   Expect smart-phones to get even smarter and to form a greater and greater proportion of all phones as the old ones die out and are replaced.   By 2014 50% of mobile phone users will be using their phones to make payments according to Juniper – so the trend is strong and it is here to stay.  

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