Today I was in a confusing discussion – what is the difference between e- and m-commerce? At first glace it seemed obvious, “e” is done on the Internet via a laptop the traditional way and “m” via a mobile device over a radio network. But then we came into the device issue, if you have a smartphone running on a LAN or an iPad via an operator. What then?
Worldwide, nearly 1 in 3 phones sold in 2011 was a smartphone. Couple this with the wide uptake of tablets and other portable devices; it’s obvious to see that consumers have incredibly advanced technology available for their mobile lifestyle. Increasingly, what used to be strictly e-commerce is now becoming m-commerce, or a combination of both.
We concluded that regardless of the transaction, we would need a wallet that could be accessed from many devices. I should be able to transfer money to friends and family, pay for physical and virtual goods and services and pay in shops in any way I want. Similar to how m-commerce has created opportunities, the next generation of digital wallets will enable the lifestyle we want and need.
The market for e-commerce and in particular mobile commerce is rapidly growing. Market reports such as Juniper indicate that mobile commerce transactions will reach more than 700 M$ in 5 years from now. This growth is fostered by new developments in the mobile and Internet industries, providing consumers with new, convenient and secure ways to transfer money or make payments. Particularly worth mentioning in this landscape are mobile wallets, plugins that turn mobile phones into point-of-sales devices and the expansion of smartphones & tablets.
In emerging markets, mobile wallet technology has provided unbanked consumers with access to financial services using a mobile phone. This has enabled services such as money transfer, bill payment, goods purchase, airtime top-up and other services like insurances. One of the factors driving further uptake of mobile wallets is the ”payment reach” provided to consumers with wallet services. Therefore, by 2015 we will see interoperability between wallet schemes to make transfer of money between subscribers of different wallet providers as seamless as sending an SMS is today.
A mobile wallet :
A mobile wallet is more than just your regular bank account accessed from your mobile phone.It’s your bank account, combined with your Internet banking, your credit card, your expense tracker, your loyalty cards, your coupons, your pre-paid items, and your savings accounts all in one.
What are the advantages?
Everything is in real-time. This means the freedom to transfer money to your family or friends on the go, even if they don’t have a bank account. Imagine your friend is buying movie tickets, you can easily transfer them the money needed.
A mobile wallet means real-time interaction between supplier and the customer, which means you are able to receive and use location based coupons or promotions issued with the help of NFC technology. You are instantly rewarded for being exactly where you are.
Even more than that, a mobile wallet is linked to several different cards and accounts, so everything gets integrated. Your bonus cards, your loyalty cards, your coupons and your gift vouchers all in one place so they are always with you.
A mobile wallet can also be used in a variety of different purchase situations. Physical POS, online or mobile, it does not require you to switch to a different means of payment.
It also frees you up from carrying cash, something that can be stolen or lost and because it is strictly tied to your identity there is added safety and peace of mind.
So it’s not just a wallet. And neither is it just your regular bank account. It combines these two, adds even more functions, information and finally also increases the security of your assets. A mobile wallet gives me financial control and I always have it with me
Furthermore, as merchant acquisition is a cost for mobile operators and not all merchants may sign up for a wallet to receive payments, interconnection with existing payment networks to enable
consumers to pay (in-store or online) with a debit card linked to a wallet, will be widespread by 2015.
Another driver for m-commerce is the development of card reader plug-ins that can turn mobile phones into point-of-sales devices. In this way the investment required by a merchant is reduced, stimulating payments with cards especially in markets where the cost of traditional point of sales devices is a hurdle. The first solutions are appearing in the market (for example Square and PayPal) and by 2015 these plug-ins will be commonly used.
The next step in payment is driven by the rapid market penetration of smart phones and tablets. It is estimated (e.g. by In-Stat and Parks Associates) that 1 Billion smart phones will be shipped by 2015 and that more than 80% of all mobile subscribers in the US and Europe will have a smart phone. This gives endless possibilities to make payments more convenient and to provide consumers with more attractive marketing offers.
For example, instead of carrying around plastic cards, virtual cards can be stored in the phone and the payment app will ask the consumer what payment instrument to use when making an in-store or online payment. These payment credentials can be easily provisioned into the phone over-the-air, making it cheaper, more secure and faster to provide the consumer with a payment instrument. The user-friendly interface of a smartphone will also make it simpler for consumers to view all their loyalty points and coupons and to decide to use some of their points or a coupon for a payment, or to view all incoming bills and keep track of which ones have been paid.
Mobile and Internet technology will dramatically change the way we look at e-commerce and the examples discussed above are just the beginning. What do you think will be the main drivers as we head towards 2015.
Mobile is creating the first level global playing field. For the very first time developing and developed markets will be using a common infrastructure; one that empowers people and provides an increasing degree of equality. Mobile commerce will be a key driver of this. The fastest adoption of these services is expected in developing markets. Here legacy financial services will be leapfroged, rather than a transition from services that consumers have been using for decades, they will move straight from cash to mobile.
Mobile network operators, especially in developing markets, are extremely well positioned to bring about this change. In many of these countries the only infrastructure that exists is the mobile network and the only device that people own is a mobile phone. The brands that are most trusted are the operators and if there are few financial services, cash is still king, allowing for the introduction of these new innovative financial services.
The financially underserved have always had a terrible deal. Either, services haven’t been made available to them at all (I still struggle to comprehend there are 60 million unbanked people in the US) or services have been made available at a significant cost. This is clearly on the brink of changing.
I have always loved disruptive technologies and mobile is a fantastic catalyst for this disruption. Mobile has become part of our everyday lives. Our work life, social life and one of the last bastions that is about to change dramatically – our financial lives. M-commerce is still very much in its infancy and success over the coming years will be driven by partnership and co-operation. Join us here as we discuss the exciting future of mobile commerce and what will be driving it forward.
Worldwide, nearly 1 in 3 phones sold in 2011 was a smartphone. Couple this with the wide uptake of tablets and other portable devices; it’s obvious to see that consumers have incredibly advanced technology available for their mobile lifestyle. Increasingly, what used to be strictly e-commerce is now becoming m-commerce, or a combination of both.
We concluded that regardless of the transaction, we would need a wallet that could be accessed from many devices. I should be able to transfer money to friends and family, pay for physical and virtual goods and services and pay in shops in any way I want. Similar to how m-commerce has created opportunities, the next generation of digital wallets will enable the lifestyle we want and need.
The market for e-commerce and in particular mobile commerce is rapidly growing. Market reports such as Juniper indicate that mobile commerce transactions will reach more than 700 M$ in 5 years from now. This growth is fostered by new developments in the mobile and Internet industries, providing consumers with new, convenient and secure ways to transfer money or make payments. Particularly worth mentioning in this landscape are mobile wallets, plugins that turn mobile phones into point-of-sales devices and the expansion of smartphones & tablets.
In emerging markets, mobile wallet technology has provided unbanked consumers with access to financial services using a mobile phone. This has enabled services such as money transfer, bill payment, goods purchase, airtime top-up and other services like insurances. One of the factors driving further uptake of mobile wallets is the ”payment reach” provided to consumers with wallet services. Therefore, by 2015 we will see interoperability between wallet schemes to make transfer of money between subscribers of different wallet providers as seamless as sending an SMS is today.
A mobile wallet :
A mobile wallet is more than just your regular bank account accessed from your mobile phone.It’s your bank account, combined with your Internet banking, your credit card, your expense tracker, your loyalty cards, your coupons, your pre-paid items, and your savings accounts all in one.
What are the advantages?
Everything is in real-time. This means the freedom to transfer money to your family or friends on the go, even if they don’t have a bank account. Imagine your friend is buying movie tickets, you can easily transfer them the money needed.
A mobile wallet means real-time interaction between supplier and the customer, which means you are able to receive and use location based coupons or promotions issued with the help of NFC technology. You are instantly rewarded for being exactly where you are.
Even more than that, a mobile wallet is linked to several different cards and accounts, so everything gets integrated. Your bonus cards, your loyalty cards, your coupons and your gift vouchers all in one place so they are always with you.
A mobile wallet can also be used in a variety of different purchase situations. Physical POS, online or mobile, it does not require you to switch to a different means of payment.
It also frees you up from carrying cash, something that can be stolen or lost and because it is strictly tied to your identity there is added safety and peace of mind.
So it’s not just a wallet. And neither is it just your regular bank account. It combines these two, adds even more functions, information and finally also increases the security of your assets. A mobile wallet gives me financial control and I always have it with me
Furthermore, as merchant acquisition is a cost for mobile operators and not all merchants may sign up for a wallet to receive payments, interconnection with existing payment networks to enable
consumers to pay (in-store or online) with a debit card linked to a wallet, will be widespread by 2015.
Another driver for m-commerce is the development of card reader plug-ins that can turn mobile phones into point-of-sales devices. In this way the investment required by a merchant is reduced, stimulating payments with cards especially in markets where the cost of traditional point of sales devices is a hurdle. The first solutions are appearing in the market (for example Square and PayPal) and by 2015 these plug-ins will be commonly used.
The next step in payment is driven by the rapid market penetration of smart phones and tablets. It is estimated (e.g. by In-Stat and Parks Associates) that 1 Billion smart phones will be shipped by 2015 and that more than 80% of all mobile subscribers in the US and Europe will have a smart phone. This gives endless possibilities to make payments more convenient and to provide consumers with more attractive marketing offers.
For example, instead of carrying around plastic cards, virtual cards can be stored in the phone and the payment app will ask the consumer what payment instrument to use when making an in-store or online payment. These payment credentials can be easily provisioned into the phone over-the-air, making it cheaper, more secure and faster to provide the consumer with a payment instrument. The user-friendly interface of a smartphone will also make it simpler for consumers to view all their loyalty points and coupons and to decide to use some of their points or a coupon for a payment, or to view all incoming bills and keep track of which ones have been paid.
Mobile and Internet technology will dramatically change the way we look at e-commerce and the examples discussed above are just the beginning. What do you think will be the main drivers as we head towards 2015.
Mobile is creating the first level global playing field. For the very first time developing and developed markets will be using a common infrastructure; one that empowers people and provides an increasing degree of equality. Mobile commerce will be a key driver of this. The fastest adoption of these services is expected in developing markets. Here legacy financial services will be leapfroged, rather than a transition from services that consumers have been using for decades, they will move straight from cash to mobile.
Mobile network operators, especially in developing markets, are extremely well positioned to bring about this change. In many of these countries the only infrastructure that exists is the mobile network and the only device that people own is a mobile phone. The brands that are most trusted are the operators and if there are few financial services, cash is still king, allowing for the introduction of these new innovative financial services.
The financially underserved have always had a terrible deal. Either, services haven’t been made available to them at all (I still struggle to comprehend there are 60 million unbanked people in the US) or services have been made available at a significant cost. This is clearly on the brink of changing.
I have always loved disruptive technologies and mobile is a fantastic catalyst for this disruption. Mobile has become part of our everyday lives. Our work life, social life and one of the last bastions that is about to change dramatically – our financial lives. M-commerce is still very much in its infancy and success over the coming years will be driven by partnership and co-operation. Join us here as we discuss the exciting future of mobile commerce and what will be driving it forward.
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ReplyDeleteThe concept of m-commerce and its place in shaping the world of commerce, cannot be generally overstated. There is growing consensus amongst most experts and industry players that the time has come to put in the work and develop this opportunity to its fullest.
ReplyDeletefor people who are directly involved in the legal and regulatory side of things, the diversity of laws and regulations which sometimes indicate the unpreparedness of some jurisdictions or at times signifies a need for education or reluctance to change, present a real challenge. This is not just a challenge within the market but also a challenge that presents itself internally within organizations.
ReplyDelete