Some research journals noted that around three billion people are expected to own mobile phones in the globe by 2010. Mobile commerce is a natural successor to electronic commerce. The capability to pay electronically coupled with a website is the engine behind electronic commerce. Electronic commerce has been facilitated by automatic teller machines (ATMs) and shared banking networks, debit and credit card systems, electronic money and stored value applications, and electronic bill presentment and payment systems. Mobile payments are a natural evolution e-payment schemes that will facilitate mobile commerce.
A mobile payment or m-payment may be defined, for our purposes, as any payment where a mobile device is used to initiate, authorize and confirm an exchange of financial value in return for goods and services (ref from Au and Kauffman, 2007).
Mobile devices may include mobile phones, PDAs, wireless tablets and any other device that connect to mobile telecommunication network and make it possible for payments to be made (ref from Karnouskos and Fokus, 2004).
The realization of mobile payments will make possible new and unforeseen ways of convenience and commerce. Unsuspected technological innovations are possible. Music, video on demand, location based services identifiable through mobile handheld devices – procurement of travel, hospitality, entertainment and other uses are possible when mobile payments become feasible and ubiquitous. Mobile payments can become a complement to cash, cheques, credit cards and debit cards. It can also be used for payment of bills (especially utilities and insurance premiums) with access to account-based payment instruments such as electronic funds transfer, Internet banking payments, direct debit and electronic bill presentment.
Security is still a major concern. two-thirds of users (as my past experiences) were worried about transmitting sensitive financial information, while more than 60% were worried about being exposed to scams and fraud and rest were worried about what would happen if they lost a phone containing personal financial information.
Sometimes ago (may be around year 2000) China's largest mobile network operator China Mobile began offering mobile banking services throughout some major provinces and municipalities. Basically, users will be able to access their banks via mobile phone for transactions such as checking bank balances, paying phone bills, and transferring funds between accounts. It was collaborated initially with three leading banks, they are; Bank of China (BoC), Industrial and Commercial Bank of China (ICBC), and China Merchants Bank (CMB) - and China Mobile providing these services to some half million subscribers in the initial phase (don't know how many currently). From the local news its noted that the retail e-commerce sales of China are anticipated to increase at a CAGR of 17.45% from 2006 to 2010, and there is a believe also that mobile banking will be the future of Chinese banking sector.
There is a journal from Wang Guang Yu, IT Specialist in Banking & Finance, Headquarter, The Industrial & Commercial Bank of China, and I just want to quote his note:
"ICBC created the most advanced capital clearing system, with 37,106 electronic outlets with coverage of over 97%. Its tele-bank service has been opened to 261 cities and the function and scale of it's 95588 tele-bank has leaped to first place in the industry. It has released services such as company online banking, individual online banking, B2B online payments, B2C online payments, bank securities transfer, foreign exchange, etc. ICBC also established in Beijing, Shanghai and Tianjin subsidiaries transaction websites which have been promoted to 185 developed medium-large cities. All of these provide the firm foundation for the development of ICBC's mobile banking business".
My perspective overseeing this mobile commerce in China, have several views:
1. From public and market situation itself in China, mobile commerce is still fresh for most of the Chinese people who are less interested to trying to take on board this type of services, even internet banking. Next question: education and campaign issues?
2. From banking sector, somehow, China's mobile banking or commerce didn't get the general attention of commercial banks and less push promotions are launched (ref from my limited experiences since past years in China)
3. From mobile operator value added services, again - personally, I just saw some campaign only from pushing just SMS, let alone WAP mobile banking.
4. From technology perspective, with the development of 3G (just now) and WAP, the future mobile commerce must demand mobile operators upgrade their current products.
Anyway, lots of challenges are to be overcome for a successful implementation of mobile commerce to be widely accepted as a mode of payment. Businesses, merchants and consumers have to come forward and make value-producing investments. A regulatory framework and widely accepted standards will be the pillars on which mobile payment applications will be built.
Next question: from around more than 1.5 Billion people, who will take this homework?
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