m-commerce

A

PRESENTATION

ON

M-COMMERCE

Presented By:

Jagrat Gupta M.Tech. (CSE)

1st Year

1

What is Commerce

Commerce is a division of trade or production which

deals with the EXCHANGE OF ECONOMIC VALUES

from producer to final consumer.

It comprises the trading of economic value such as

goods, services, information, or money between two or

more entities.

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M-commerce is the buying and selling of goods and services through wireless handheld devices.

M-Commerce is the process of paying for services using a mobile phone or personal organizer.

Use of mobile devices to-

1. Transact.

2. Communicate.

3. Entertain.

3

Is the ability to conduct commerce using a mobile device.

such as :

Mobile phone.

Personal digital assistant (PDA).

Smartphone.

4

M-commerce

=

E-commerce

+

Wireless Web5

Mobile Commerce Services were first delivered in

1997, when the first two mobile-phone enabled Coca

Cola vending machines were installed in the Helsinki

area in Finland. The machines accepted payment via

SMS text messages. The first mobile phone-based

banking service was launched in 1997 by Merita Bank

of Finland, also using SMS.

The M-Commerce server developed in late 1997 by

Kevin Duffey at Logica.

Since the launch of the iPhone, mobile Commerce has

moved away from SMS systems and into actual

applications.6

Mobile Commerce from the Customer‘ s point ofview

The customer wants to access information, goods

and services any time and in any place on his mobile

device.

He can use his mobile device to purchase tickets for

events or public transport, pay for parking,

download content and even order books and CDs.

He should be offered appropriate payment methods.

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Mobile Commerce from the Provider`s point of view

The future development of the mobile telecommunication

sector is heading more and more towards value-added

services. Analysts forecast that soon half of mobile

operators‘ revenue will be earned through mobile

Commerce.

Innovative service scenarios will be needed that meet the

customer‘s expectations and business models that satisfy

all partners involved.8

M-commerce and E-commerce are business transactions done online.

M-commerce stands for Mobile Commerce while E-commerce stands for Electronic

Commerce.

M-commerce uses mobile devices for commercial transactions while E-commerce uses Computers.

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M-commerce is available anyplace you go,

even if there is no Internet. For E-commerce,

you still need to go to a place where there is

Internet to access your online transactions.

M-commerce is very handy and easy to carry

while E-commerce you cannot always bring

with you ,your computer or laptop anywhere.

M-commerce however is costly compared to E-commerce.

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Ubiquity

Convenience

Interactivity

Personalization

Localization

Tuesday, December 9, 2014

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Ubiquity—easier information access in real-time

Convenience—devices that store data and have Internet, intranet, extranet connections

Instant connectivity—easy and quick connection to Internet, intranets, other mobile devices.

Personalization—preparation of information for individual consumers

Localization of products and services—knowing where the user is located at any given time and match service to them.

User:-User is defined as a person who is authorized to use his Personal Trusted Device (PTD). Every user of M-Commerce is associated one or more PTDs. Users of m-commerce can be divided into two main categories:

End users or system users: Retail subscribers of mobile phone services who uses mobile phones for commercial activity comes under this category. Here the benefit or the end-result is received by the subscriber.

Suppliers: In this category the end-result or benefit is obtained by an organization that utilizes M-Commerce for increasing the productivity and efficiency of its activities.

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Network Operators:-Network operators offer the transport facility for data to pass across from the end-user to the destination and vice-versa. Operators enable this by providing network infrastructure with technologies such as GSM, GPRS and 3G.

Service Providers:-Service providers typically involve in activities that develops new services on the common platforms providing standardized functional interface to application developers, and utilizes the network infrastructure provided by the Network Operator to provide the data in a consistent and user-friendly format for the end-user.

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Content Providers:-

Content providers aggregate mobile device content from different sources. They also link up with Commerce Mediators to handle the payment activities.

Commerce Mediator:-

Any organization that provides payment solutions or services comes under this category. These organizations act as mediators between content providers and financial industry. This category also includes firms providing security solutions for payment.

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Finance Organizations:-Any commercial transaction on a media requires framework and infrastructure to complete it with payment for the item transacted on. Financial industry has unique positioning and role in M-Commerce value chain. It provides necessary facility to carry out such a transaction.

PTD:-For M-Commerce, the mobile phone is regarded as a user centered Personal Trusted Device (PTD). The mobile phone is small, personal, familiar, secure and available at all times. As a PTD, the mobile phone will be able to handle all transaction-related functions in both the online world and the physical world.

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This PTD may include mechanisms for user verification, an area for secure key storage and cryptographic processing, a certificate database, and a transaction database.

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Application

developer

Content providers Other service

providers.

Eqiupment vendorsWireless service

providers

Users

Apps Contents

transaction

response

Contents Transaction

request

Equipments Equipments

EqipumentsApp info.

Mobile ticketing

Mobile Money Transfer

Content purchase and delivery

Information services

Mobile banking

Mobile Browsing

Mobile Purchase

Mobile marketing and advertisingTuesday, December 9, 201419

Mobile Ticketing is the process where the customers

can order, pay for, obtain and validate tickets from

any location and at any time using Mobile phones .

Tickets can be booked and cancelled on the mobile

device with the help of simple application downloads.

Delivery of tickets to mobile phones can be done in

the form of a SMS or by a MMS.


Mobile Tickets can be purchased in a

variety of ways including online, via

text messaging or in a secure mobile

application.

Mobile Ticketing is used in many

applications like:

1. Airline ticketing

2. Cinema ticketing

3. Railway & Bus ticketing

4. Concert/Event ticketing

5. Consumer voucher distributionTuesday, December 9, 201421

Benefits to the ticket buyer

Instant delivery of mobile tickets at the time of

purchase.

Individual mobile tickets can be forwarded to a friend.

Quicker entry with no waiting in lines.

Benefits to the Event organizer

Reduced will call lines and staffing.

Guaranteed security, only one entry per barcode.

Event is 'greener' with reduced paper waste.22

Mobile Money Transfer refers to payment services

which are performed by using a mobile phone.

By using this service we can transfer money from one

person to other by using a mobile phone.

Ex: ICICI bank has started IMPS - Interbank Mobile

Payment Service. It is an interbank electronic instant

mobile money transfer service through mobile phones.

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Mobile content purchase and delivery mainly

consists of the sale of ring-tones, wallpapers, and

games for mobile phones.

The convergence of mobile phones, portable audio

players, and video players into a single device is

increasing the purchase and delivery of full-length

music tracks and video.


A wide variety of information services can be

delivered to mobile phone users in much the same way

as it is delivered to PCs. These services include:

News

Stock quotes

Sports scores

Traffic reporting


Banks and other financial institutions use mobile

Commerce to allow their customers to access

account information and make transactions, such as

purchasing stocks, remitting money, receive

notifications, transfer money to other banks.Tuesday, December 9, 201427

Mobile Banking Services are:

1. Mini-statements and checking of account history

2. Checking the balance

3. Recent transactions

4. PIN provision, Change of PIN and reminder over

the Internet

5. Cash-in, cash-out transactions on an ATM


The location of the mobile phone user is an important

piece of information used during Mobile Commerce or

M-Commerce transactions.

Knowing the location of the user allows for location-

based services such as:

1. Local discount offers

2. Tracking and monitoring of people


Some merchants provide mobile websites that are

customized for the smaller screen and limited user

interface of a mobile device.


Mobile marketing ishighly responsive sortof marketing campaign,especially from brands’experience point ofview.

Corporations are nowusing M-Commerce toexpand everything fromservices to marketingand advertisement.


Types of M-marketing and advertising:

• Mobile Web Poster

• SMS advertising

• MMS advertising

• Mobile games

• Mobile videos

• Audio Advertisements


The voucher, coupon, or loyalty card is represented by

a virtual token that is sent to the mobile phone.

Presenting a mobile phone with one of these tokens at

the point of sale allows the customer to receive the

same benefits as another customer who has a loyalty

card or other paper coupon/voucher.


M- commerce

Entertainment• Music

• Games

• Graphics

• Video

Communications• Short Messaging

• Multimedia Messaging

• Unified Messaging

• e-mail

• Chatrooms

• Video - conferencing

Transactions• Banking

• Broking

• Shopping

• Auctions

• Betting

• Booking & reservations

• Mobile wallet

• Mobile purse

Information• News

• City guides

• Directory Services

• Maps

• Traffic and weather

• Corporate information

• Market data

Consumers can use many forms of payment in

mobile Commerce. They are:

1. Premium SMS / Premium MMS transaction.

2. Direct Mobile Billing.

3. Mobile WAP.

4. Macro payment and Micro payment Services.

5. Mobile Wallet.


In the predominant model for SMS payments, the consumer sends a payment request via an SMS text message or an USSD to a short code and a premium charge is applied to their phone bill. The merchant involved is informed of the payment success and can then release the paid for goods.

Some mobile payment services accept “Premium SMS payments." Here is the typical end user payment process:-

1. User sends SMS with keyword and unique number to a premium short code.

2. User receives a PIN (User billed via the short code on receipt of the PIN) Tuesday, December 9, 201438

3. User uses PIN to access content or services.

Inhibiting factors of Premium SMS include:-

Poor reliability - transactional premium SMS payments can easily fail as messages get lost.

Slow speed - sending messages can be slow and it can take hours for a merchant to get receipt of payment. Consumers do not want to be kept waiting more than a few seconds.

Security - The SMS/USSD encryption ends in the radio interface, then the message is a plaintext.


4. High cost - There are many high costs associated with this method of payment. The cost of setting up short codes and paying for the delivery of media via a Multimedia Messaging Service and the resulting customer support costs to account for the number of messages that get lost or are delayed.

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The consumer uses the mobile billing option during checkout at an e-commerce site to make a payment. After two-factor authentication involving a PIN and One-Time-Password (often abbreviated as OTP), the consumer's mobile account is charged for the purchase.

It is a true alternative payment method that does not require the use of credit/debit cards or pre-registration at an online payment solution such as PayPal, thus bypassing banks and credit card companies altogether. This type of mobile payment method, provides the following benefits:



Security - Two-factor authentication and a risk

management engine prevents fraud.

Convenience - No pre-registration and no new mobile

software is required.

Fast - Most transactions are completed in less than 10

seconds.

Proven - 70% of all digital content purchased online in

some parts of Asia uses the Direct Mobile Billing method

The consumer uses web pages displayed or additional applications downloaded and installed on the mobile phone to make a payment. It uses WAP (Wireless Application Protocol) as underlying technology. Benefits include:-

1. Follow-on sales where the mobile web payment can lead back to a store or to other goods the consumer may like. These pages have a URL and can be bookmarked making it easy to re-visit or share.

2. High customer satisfaction from quick and predictable payments.

3. Ease of use from a familiar set of online payment pages.

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Macro payments:

This kind of payments is used by traditional electronic

Commerce and they usually involve for large amounts

transactions.

Payments by credit cards are the most common

method for Macro payments.


These usually involve for lesser amounts which are

too small to be economically processed by credit

cards.

The amounts are usually charged to user’s phone

bills.


A mobile wallet based payment strategy deals with

how, where and when the payments can be accepted

and processed using the user’s wallet accounts.

A mobile wallet payment option includes the

following:

• Prepaid – Here the users top up their mobile wallet

accounts upfront and such mobile wallet accounts are

used to make the payments in context of the mobile

sales transactions.



• Post-paid – In this case, a user’s mobile walletaccount is linked to his or her carrier billing account.The mobile sales transactions are paid with the user’smobile wallet account, which in turn is charged to theassociated mobile billing account that is usually paidon a monthly or quarterly basis.

• Card linked mobile wallets – In this mobile walletstrategy, the mobile wallet accounts are linked touser’s debit or credit cards. In a mobile salestransaction, with card linked mobile wallet payment,the final payment is made from the wallet accountthat is linked to user’s cards.

Security:-

There are security issues at several levels:-

Data Security: One of the concerns is the data security among the different entities. There are no standard interfaces which have been defined till now. This has slowed down the developments in these areas.

Device Security: A Personal Trusted Device has limited liability for a subscriber. The question is, if a user can use someone else’s phone (he pays the browsing costs) but pays for the purchase of goods/services. SIM is a legal identity, as the subscriber signs a contract with the operator.

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The operator owns the card (like a bank card is owned by the bank). If the equipment cannot be legally used by multiple people, then this would put a restriction on the popularity.

Service Security: Additional security features apart from what is provided by the standard protocols are needed for commercial organizations and other entities to entrust their applications on mobiles. For e.g., banks want personal devices with a second control (e.g. a PIN number) to ensure that the person who pays can confirm his willingness to pay the amount displayed/negotiated.

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Usability Problemsmall size of mobile devices (screens, keyboards, etc).

limited storage capacity of devices.

hard to browse sites.

Technical Limitationslack of a standardized security protocol.

insufficient bandwidth.

Technology Growth:-

Perceived Security: Perceived security is important for success of M-Commerce. People are willing to give a credit card in a restaurant but will not pay by card over internet. This would reflect more in the case of M-commerce where the user gets lesser information compared to internet. However, mobile phone is more secure than a PC and hence require lesser security systems.

Security Overhead for M-Commerce security: Initial systems must be highly conservative in terms of security overheads for transactions. 53

Already these type of solutions have been introduced in the market. The Telenor solution uses SMS or a data call as a bearer to send authentication (PKI certificates) from a mobile to a server (concatenated SMS messages).

Variations in security policies:-

Different security policies have to be formulated according to scenarios. For e.g., for “small payments” using a mobile device, an user would not like to tolerate a long authentication procedure. For large payments (e.g. airline tickets), a more comprehensive security system would be appropriate.

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M-commerce using wireless technology:-

There is an increasing tendency to associate M-commerce with mobile technology alone. There is a definite roll for fixed wireless systems like WLAN and also short-range communication systems like a Bluetooth protocol device.

Development of applications:-

Hence applications needs to be created for two categories of users:

Users having low bit rate connectivity or narrow band connectivity: All 2G mobile users would come in this category. For e.g., a GSM end-user can obtain a data rate of upto 9.6kbps.

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Broadband mobile connectivity: This category would involve all 2.5G and 3G users. The data rate of this category of users would vary between 20kbps to 365kpbs depending on the technology and network.

Opportunities:-

M-Commerce offers highly lucrative opportunities for all entities in telecom sector. Some of the key opportunities are listed below. These have to be communicated so as to develop interest and motivation for organizations to contribute to the development of M-Commerce-

Network Operators: With increase in data traffic, there would be increased efficiency in the network. This can be catered to by the current systems. Mobile operators can also provide technical support for financial services across their network.

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Equipment Vendors: With increase in data traffic there is more demand for upgrade and next generation products. This would trigger development of more innovative products which could handle data traffic more efficiently.

Service Providers: M-commerce provides an opportunity for service providers to move up the value chain by providing data and commerce applications. This also opens up a new value chain for service providers.

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Financial Sector: There is increased for financial institutions and banks that can provide additional services and also expand their reach. It also give more opportunities for other related organizations to assume additional roles of a Commerce mediator.

Billing and Customer care vendors: New billing systems and customer care systems are required for the new systems developed. There is a Herculean task of developing highly efficient billing systems for the equipments.

Other wireless equipment vendors: WLAN and short term wireless vendors can find new applications for their products. This would increase the usage and hence boost the industry.

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m-commerce

Engineering

commerce cont

commerce server

mobile commerceis

use of mobile devices

mobile operators revenue

ecommerce wireless web

differences bw ecommerce

business transactions