What is M-Commerce?

There is no precise definition for mobile commerce or mobile e-commerce. Every analyst, vendor and trade magazine appears to have a slightly different interpretation of the term. In fact, there appears to be a consensus now on the meaning of its big brother "e-commerce or e-business" which came first. Perhaps, in another six months or a year, we would come to a similar consensus on m-commerce.

Definitions

Meanwhile, here are a few sample definitions:

"M-Commerce is the use of mobile devices to communicate, inform transact and entertain using text and data via a connection to public and private networks." (Lehman Brothers)

"The core of mobile e-commerce is the use of a terminal (telephone, PDA, PC device, or custom terminal) and public mobile network (necessary but not sufficient) to access information and conduct transactions that result in the transfer of value in exchange for information, services or goods." (Ovum)

M-Commerce Examples

• Purchasing airline tickets
• Purchasing movie tickets
• Restaurant booking and reservation
• Hotel booking and reservation

M-Commerce Shopping Today

According to the Nielsen Company, today already 9 million U.S. mobile subscribers claimed to have used the mobile web to pay for goods and services. While that number appears to be high, it only represents 3.6% of U.S. mobile subscribers, which shows that m-commerce is in its infancy.

The current crop of mobile shoppers is still very much rooted in the early adopter crowd and consists of more men (4.9 million) than women (4.3 million). Out of these early mobile shoppers, adults ages 25-34 are the most likely to have made a purchase.

Of course, when you think of mobile shopping, the image that comes to mind is surfing mobilized versions of web sites via the phone's browser or visiting the customized pages designed just for the growing number of iPhones. Although the number of users shopping this way has increased - up 73% from April 2007 to April 2008 - there's also another growing trend for m-commerce: shopping via SMS.

Some services already exist today that let shoppers send text message to a phone number or mobile shortcode in order to purchase goods or services.

The spammy commercials selling ringtones and wallpaper may be representative of this trend, but other more reputable brands are also venturing into this territory as of late.

Using a second example of managing a parking payment, a consumer who wants to pay for parking using m-commerce would call a certain number to establish an account that would be managed by the telecommunications operator. In order to start using the account, the user would have to make an agreement with an Internet Bank. The consumer would be able to load up the mobile account with funds that would be drawn on to pay for parking as well as any other services that had an agreement with the Internet bank managing the account of that consumer. In this case, the m-commerce arrangement performs more like a debit - or pre-paid account, rather than a credit account

Think about this?

You are at the gas station, you have just filled you car with gas and gone to the cashier to pay for the gas and you realize that you have left your wallet at home.

What do you do?

Solution

If you were a member of a M-Commerce provider, you could get your mobile phone and transfer money to the merchant just by sending a SMS.