Description
This document describes various mobile phones, cellphones, PDAs etc in India. It talks about uses, areas, challenges etc in the mobile commerce industry.
Mobile commerce in India Introduction
Mobile Commerce refers to wireless electronic commerce used for conducting commerce or business through a handy device like cellular phone or Personal Digital Assistant (PDAs). It is also said that it is the next generation wireless e-commerce that needs no wire and plug-in devices. Mobile commerce is usually called as ‘m-Commerce' in which user can do any sort of transaction including buying and selling of the goods, asking any services, transferring the ownership or rights, transacting and transferring the money by accessing wireless internet service on the mobile handset itself. The next generation of commerce would most probably be mobile commerce or m-commerce. Presuming its wide potential reach all major mobile handset manufacturing companies are making WAP enabled smart phones and providing the maximum wireless internet and web facilities covering personal, official and commerce requirement to pave the way of m-commerce that would later be very fruitful for them. M Commerce is at a very early stage. It is about purchase and sale of goods and services through the mobile with the use of a financial institution. Purchase and sale of VAS content cannot be classified as M – Commerce.
Indian Scenario
In India, Mobile Commerce is still in the development phase as the use of mobile phones for carrying out transactions is very limited. However, the development is taking place at a nice speed and in the coming years, Mobile Commerce is most likely to make its presence feel as companies and businesses have started understanding the benefits of Mobile Commerce. Some of the companies have even incorporated this technology. Airtel, ICICI, Reliance are some of the companies/businesses that are using this technology as their users are allowed to make limited purchases from their phones. For now, the users are mainly allowed to pay phone bills, utility bills, book movie tickets, book travel tickets with their cell phones. However, more services will be introduced in coming years. Security is one of the main concerns of Mobile Commerce as it’s very important to offer secure transactions and this is the reason why Mobile Commerce is still in the development phase in India. For now, users are mainly allowed to do Mobile Banking i.e. to access the bank account with a cell phone in order to pay the utility bills. With the current rate of development, users will be soon allowed to purchase products, advertise, to take part in auctions and pay bills with the help of a cell phone, while they are on the move.Mobile commerce, which in India has been limited primarily to basic banking transactions, purchase of travel tickets and payment of some utility bills, is finally taking off with banks, 1
cellular operators and payment service providers coming together to find solutions that comply with regulatory guidelines. Security, a prime concern with banking regulators, has been a hindrance to the growth of mobile commerce services such as the so-called mobile wallet, which helps make payments at retail outlets through text messages or Internet-enabled phones. The Reserve Bank of India, for one, had issued guidelines against creation of the mobile wallet, a derivative of a phone firm’s master bank account, from which millions of subscribers can be served on their mobile phones. Californian mobile payment service provider Obopay Inc. and Bangalore’s mChek India Payment Systems Pvt. Ltd are among a fast-expanding breed of mobile payment service providers which have planned offerings that work within the guidelines and bring the convenience of mobile transactions. Obopay, for instance, has a debit card-like model in place. International remittance is another service that Obopay plans to bring to India. Unlike what Western Union, the most popular service provider for such transactions, typically does, Obopay is planning to remit money from overseas directly to the bank account linked to the phone. The customer would be then notified of the transaction through a text message. This service too should be operational this year, expects Unni. Western Union typically charges customers around $4, or about Rs158, to transfer, say, $1,000 from Dubai, which is considerably less than the cost of a bank transfer: $15 to send $1,000 from, say, the US and other countries. Mobile payment service providers won’t say exactly how much, but transfers through mobile phones are expected to lower the transaction costs. Another Bangalore mobile content service provider, OnMobile Global Ltd, which concluded an initial share sale recently, plans to offer customers the option of topping up prepaid accounts of a limited number of people. “We have worked with a couple of banks. Technology researcher Gar-tner India Research and Advisory Services Pvt. Ltd has not done a formal survey, but reckons the market for such services to be less than $16 million, or 1%, of the data services market. Indian wireless phone firms are estimated to have made some $1.6 billion from text messaging, downloading of ringtones, wall papers and other non-voice offerings. Banks in India have already started tapping this market with ICICI Bank Ltd, the country’s largest private lender, making all of its Internet banking service available on mobile phones from early January. Standard Chartered Bank recently launched a service that allows a customer to transfer money across the country from an ATM to anyone with a mobile phone. The recipient can withdraw the money from any of the bank’s ATMs using a pin number which is automatically messaged to his mobile phone, and the order number that the sender should communicate to the recipient. There are more than 220 million wireless subscribers in India—a market that adds more than six million customers every month. BhartiTelesoft Ltd, a software products and solutions provider to mobile operators and a subsidiary of Bharti Enterprises Ltd, which controls India’s largest mobile phone services firm, BhartiAirtel Ltd, is working on providing solutions for microfinance operations, especially in data collection work. 2
Advantages of m-Commerce
M-commerce has several major advantages over its fixed counterparts because of its specific inbuilt characteristics such as ubiquity, personalization, flexibility, and distribution, mobile commerce promises exceptional business market potential, greater efficiency and higher fruitfulness. Thus it is not surprising that mobile commerce is emerging much faster than its fixed counterpart. Mcommerce is more personalized than e-commerce and thus needs a gentle approach to appraise mcommerce applications.
Areas / Uses of m-commerce
In the current commerce industry, mobile commerce or M-Commerce has been entered in finance, services, retails, tele-communication and information technology services. In these sectors, MCommerce is not only being widely accepted but also it is being more used as a popular way of business/ commerce. Some of the characteristics of m-payments today: (1) High burden on the user – A user who might want to do five transactions perfectly designed for the mobile medium – (a) paying their mobile bill, (b) Paying their Credit Card Bill, (c) Viewing their Bank Balance, (d) Checking Flight Schedules, and (e) Booking a movie ticket – would have to learn, register, interact with, or download five different m-payment solutions! (2) SMS platform is costly in large volume and doesn’t always provide best performance. Every transaction adds incremental, uncapped cost for the user. (Remember a purchase may require 3-5 SMS sent by the user). (3) Not intuitive – How often have you seen an advertisement telling a user to “SMS ‘ABCDE’ to 12345 in order to buy a ticket”? In the course of daily life, users may remember one or even two short codes & custom text but not much more. In terms of utility per single transaction, current m-payment solutions are great. In terms of utility for multiple, transactions, they need to evolve.
3
Challenges Faced By M-commerce:
All the existing M-Commerce model been adopted by players like M-Check, Obopay, Paymateetc require user to map a banking instrument like credit card, debit card, bank account etc to their mobile phone account and via an application installed on phone or through the provider concentrate on making payment instrument mobile enabled. Although its a big leap from security point of you enabling people to start paying via the mobile phone WAP,SMS medium for various merchant services available though still such services have not reached a critical stage due to lot of factors like non-tie up with all the banks or people still not comfortable sharing credit/debit card account information etc. Trying to understand with such stringent norms coming through TRAI guidelines making its mandatory to identify customers which are as stringent as required to open an saving account and get a debit card, it made me wonder telecom companies with their access and reach are in the best for forward integration into becoming a bank then other way around. If today i using my mobile phone account could start paying at merchants like credit cards or using pre-paid cards start buying stuff like vegetables etc, my bank usage for daily transaction would reduce significantly. biggest barrier understood from various experts is the TRAI license fees calculation system which is approx 6% of annual gross revenue. So until unless you register as VAS provider with operator and clearly revenue parted is shown in books it will be still counted as net reciept revenue making the commerce business unviable as merchants won’t be ready to pay for transactions around 7-8% where banks are charging between 2-4%. Compliance to RBI banking norms is much simpler task for such telecom companies for handling banking, fraud transactions but the biggest barrier imposed by TRAI in terms of license fees need to be cleared.
Conclusion
For M commerce an eco-system between application developers, financial institutions, and mobile phone networks is necessary. Simplicity is the key to proliferation of M commerce coupled with the idea of developing trust with audiences. Overall it has been seen customer with established e-commerce channel benefit 70% more than one only relying on just m-commerce play. We all know M-commerce is here to stay but investment in e-commerce infrastructure is for long term as today we have mobile platform tomorrow we might have interaction happening with the refrigerators directly for placing grocery orders online. This means e-channel is scalable to service such other platforms but basic investment in e-commerce platform is something clients should not run away from. With M-Commerce client sees immediate reach out and ability to reach out to more’s is always more attractive. This means m-commerce is restricting clients investment as brand building efforts instead of 4
providing a channel for revenue generation. In order for successful growth of m-commerce or any kind of e-currency based commerce need for platform based adoption is requested with m-commerce or others also acting out channel for customer acquisition and retention.
References :
http://www.alootechie.com/content/when-will-m-commerce-take-off-india is not available (accessed on 9/2/2010)
http://informationmadness.com/cms/blog/25-blog/965-mobile-commerce-in-india.html(accessed on
9/2/2010)
http://www.iiitb.ac.in/ss/ET%20NEW/ET%2028.htm(accessed on 9/2/2010) http://www.iiitb.ac.in/ss/ET%20NEW/ET%2028.htm(accessed on 9/2/2010)
5
doc_416805353.docx
This document describes various mobile phones, cellphones, PDAs etc in India. It talks about uses, areas, challenges etc in the mobile commerce industry.
Mobile commerce in India Introduction
Mobile Commerce refers to wireless electronic commerce used for conducting commerce or business through a handy device like cellular phone or Personal Digital Assistant (PDAs). It is also said that it is the next generation wireless e-commerce that needs no wire and plug-in devices. Mobile commerce is usually called as ‘m-Commerce' in which user can do any sort of transaction including buying and selling of the goods, asking any services, transferring the ownership or rights, transacting and transferring the money by accessing wireless internet service on the mobile handset itself. The next generation of commerce would most probably be mobile commerce or m-commerce. Presuming its wide potential reach all major mobile handset manufacturing companies are making WAP enabled smart phones and providing the maximum wireless internet and web facilities covering personal, official and commerce requirement to pave the way of m-commerce that would later be very fruitful for them. M Commerce is at a very early stage. It is about purchase and sale of goods and services through the mobile with the use of a financial institution. Purchase and sale of VAS content cannot be classified as M – Commerce.
Indian Scenario
In India, Mobile Commerce is still in the development phase as the use of mobile phones for carrying out transactions is very limited. However, the development is taking place at a nice speed and in the coming years, Mobile Commerce is most likely to make its presence feel as companies and businesses have started understanding the benefits of Mobile Commerce. Some of the companies have even incorporated this technology. Airtel, ICICI, Reliance are some of the companies/businesses that are using this technology as their users are allowed to make limited purchases from their phones. For now, the users are mainly allowed to pay phone bills, utility bills, book movie tickets, book travel tickets with their cell phones. However, more services will be introduced in coming years. Security is one of the main concerns of Mobile Commerce as it’s very important to offer secure transactions and this is the reason why Mobile Commerce is still in the development phase in India. For now, users are mainly allowed to do Mobile Banking i.e. to access the bank account with a cell phone in order to pay the utility bills. With the current rate of development, users will be soon allowed to purchase products, advertise, to take part in auctions and pay bills with the help of a cell phone, while they are on the move.Mobile commerce, which in India has been limited primarily to basic banking transactions, purchase of travel tickets and payment of some utility bills, is finally taking off with banks, 1
cellular operators and payment service providers coming together to find solutions that comply with regulatory guidelines. Security, a prime concern with banking regulators, has been a hindrance to the growth of mobile commerce services such as the so-called mobile wallet, which helps make payments at retail outlets through text messages or Internet-enabled phones. The Reserve Bank of India, for one, had issued guidelines against creation of the mobile wallet, a derivative of a phone firm’s master bank account, from which millions of subscribers can be served on their mobile phones. Californian mobile payment service provider Obopay Inc. and Bangalore’s mChek India Payment Systems Pvt. Ltd are among a fast-expanding breed of mobile payment service providers which have planned offerings that work within the guidelines and bring the convenience of mobile transactions. Obopay, for instance, has a debit card-like model in place. International remittance is another service that Obopay plans to bring to India. Unlike what Western Union, the most popular service provider for such transactions, typically does, Obopay is planning to remit money from overseas directly to the bank account linked to the phone. The customer would be then notified of the transaction through a text message. This service too should be operational this year, expects Unni. Western Union typically charges customers around $4, or about Rs158, to transfer, say, $1,000 from Dubai, which is considerably less than the cost of a bank transfer: $15 to send $1,000 from, say, the US and other countries. Mobile payment service providers won’t say exactly how much, but transfers through mobile phones are expected to lower the transaction costs. Another Bangalore mobile content service provider, OnMobile Global Ltd, which concluded an initial share sale recently, plans to offer customers the option of topping up prepaid accounts of a limited number of people. “We have worked with a couple of banks. Technology researcher Gar-tner India Research and Advisory Services Pvt. Ltd has not done a formal survey, but reckons the market for such services to be less than $16 million, or 1%, of the data services market. Indian wireless phone firms are estimated to have made some $1.6 billion from text messaging, downloading of ringtones, wall papers and other non-voice offerings. Banks in India have already started tapping this market with ICICI Bank Ltd, the country’s largest private lender, making all of its Internet banking service available on mobile phones from early January. Standard Chartered Bank recently launched a service that allows a customer to transfer money across the country from an ATM to anyone with a mobile phone. The recipient can withdraw the money from any of the bank’s ATMs using a pin number which is automatically messaged to his mobile phone, and the order number that the sender should communicate to the recipient. There are more than 220 million wireless subscribers in India—a market that adds more than six million customers every month. BhartiTelesoft Ltd, a software products and solutions provider to mobile operators and a subsidiary of Bharti Enterprises Ltd, which controls India’s largest mobile phone services firm, BhartiAirtel Ltd, is working on providing solutions for microfinance operations, especially in data collection work. 2
Advantages of m-Commerce
M-commerce has several major advantages over its fixed counterparts because of its specific inbuilt characteristics such as ubiquity, personalization, flexibility, and distribution, mobile commerce promises exceptional business market potential, greater efficiency and higher fruitfulness. Thus it is not surprising that mobile commerce is emerging much faster than its fixed counterpart. Mcommerce is more personalized than e-commerce and thus needs a gentle approach to appraise mcommerce applications.
Areas / Uses of m-commerce
In the current commerce industry, mobile commerce or M-Commerce has been entered in finance, services, retails, tele-communication and information technology services. In these sectors, MCommerce is not only being widely accepted but also it is being more used as a popular way of business/ commerce. Some of the characteristics of m-payments today: (1) High burden on the user – A user who might want to do five transactions perfectly designed for the mobile medium – (a) paying their mobile bill, (b) Paying their Credit Card Bill, (c) Viewing their Bank Balance, (d) Checking Flight Schedules, and (e) Booking a movie ticket – would have to learn, register, interact with, or download five different m-payment solutions! (2) SMS platform is costly in large volume and doesn’t always provide best performance. Every transaction adds incremental, uncapped cost for the user. (Remember a purchase may require 3-5 SMS sent by the user). (3) Not intuitive – How often have you seen an advertisement telling a user to “SMS ‘ABCDE’ to 12345 in order to buy a ticket”? In the course of daily life, users may remember one or even two short codes & custom text but not much more. In terms of utility per single transaction, current m-payment solutions are great. In terms of utility for multiple, transactions, they need to evolve.
3
Challenges Faced By M-commerce:
All the existing M-Commerce model been adopted by players like M-Check, Obopay, Paymateetc require user to map a banking instrument like credit card, debit card, bank account etc to their mobile phone account and via an application installed on phone or through the provider concentrate on making payment instrument mobile enabled. Although its a big leap from security point of you enabling people to start paying via the mobile phone WAP,SMS medium for various merchant services available though still such services have not reached a critical stage due to lot of factors like non-tie up with all the banks or people still not comfortable sharing credit/debit card account information etc. Trying to understand with such stringent norms coming through TRAI guidelines making its mandatory to identify customers which are as stringent as required to open an saving account and get a debit card, it made me wonder telecom companies with their access and reach are in the best for forward integration into becoming a bank then other way around. If today i using my mobile phone account could start paying at merchants like credit cards or using pre-paid cards start buying stuff like vegetables etc, my bank usage for daily transaction would reduce significantly. biggest barrier understood from various experts is the TRAI license fees calculation system which is approx 6% of annual gross revenue. So until unless you register as VAS provider with operator and clearly revenue parted is shown in books it will be still counted as net reciept revenue making the commerce business unviable as merchants won’t be ready to pay for transactions around 7-8% where banks are charging between 2-4%. Compliance to RBI banking norms is much simpler task for such telecom companies for handling banking, fraud transactions but the biggest barrier imposed by TRAI in terms of license fees need to be cleared.
Conclusion
For M commerce an eco-system between application developers, financial institutions, and mobile phone networks is necessary. Simplicity is the key to proliferation of M commerce coupled with the idea of developing trust with audiences. Overall it has been seen customer with established e-commerce channel benefit 70% more than one only relying on just m-commerce play. We all know M-commerce is here to stay but investment in e-commerce infrastructure is for long term as today we have mobile platform tomorrow we might have interaction happening with the refrigerators directly for placing grocery orders online. This means e-channel is scalable to service such other platforms but basic investment in e-commerce platform is something clients should not run away from. With M-Commerce client sees immediate reach out and ability to reach out to more’s is always more attractive. This means m-commerce is restricting clients investment as brand building efforts instead of 4
providing a channel for revenue generation. In order for successful growth of m-commerce or any kind of e-currency based commerce need for platform based adoption is requested with m-commerce or others also acting out channel for customer acquisition and retention.
References :
http://www.alootechie.com/content/when-will-m-commerce-take-off-india is not available (accessed on 9/2/2010)
http://informationmadness.com/cms/blog/25-blog/965-mobile-commerce-in-india.html(accessed on
9/2/2010)
http://www.iiitb.ac.in/ss/ET%20NEW/ET%2028.htm(accessed on 9/2/2010) http://www.iiitb.ac.in/ss/ET%20NEW/ET%2028.htm(accessed on 9/2/2010)
5
doc_416805353.docx