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E-commerce has only just begun and already everyone is talking about m-commerce. What is it exactly? And who can benefit?

The South African Department of Communications would like to see Johannesburg's street-traders armed with a new weapon against theft: the mobile phone. Under a pilot scheme, tourists will be able to pay street-sellers for traditional African artifacts via a mobile handset. Either the trader will slot a customer's smart credit card into a mobile phone-cum-smart-card reader, or the tourist will perform a money transfer to the trader's bank account.

Doing away with the need to carry wads of cash in a city rife with crime is just one of the more practical sides of mobile commerce. Just like e-commerce, m-commerce is the buying and selling of goods across public telecommunications networks.

Indeed m-commerce is likely to complement, rather than replace, e-commerce systems already in place. Businesses, for example, may provide secure mobile links to existing e-commerce sites.

There are, however, some key differences. Whereas e-commerce bridges distance and enables companies to display and sell wares cheaply to consumers and other businesses round the world, one of the selling points of m-commerce will be proximity.

The mobile industry is setting much store by location-based services, such as finding a restaurant, buying electronic train tickets and advertising shops as subscribers approach them.

Constant companion

Mobile phones travel most places with the subscriber and, thanks to the SIM card, they can easily become electronic wallets. The SIM card, or microchip, in the back of every phone serves to identify the operator, the location of the phone and often the subscriber.

By the end of 2010, "m-commerce will be the second biggest industry behind healthcare," claims Risto Perttunen, head of McKinsey's global wireless group in Helsinki. The remark underlines the enormous impact analysts expect m-commerce to have on consumer and business purchasing.

Even if the growth of m-commerce does not meet analysts' forecasts, m-commerce is much better placed to impregnate the average consumer's daily life than e-commerce.

Mobile phones are cheaper, easier to use and more prevalent than PCs. The Gartner Group, an IT and telecom research company, forecasts that mobile phone calls will account for 40% of the links to e-commerce systems by 2003 and estimates that mobile phone users already outnumber fixed Internet users by more than two to one.

in addition, for developing countries, building mobile networks is the cheapest and fastest way to provide people with a phone line. Also, mobile phones come with built-in payment systems, so there is no need for bank accounts to set up direct debits. Indeed pre-paid SIM cards already act as electronic purses, albeit with micro-purchases limited to minutes of telephone conversation.

It is therefore not much of a stretch to employ a pre-paid card as a debit card for small purchases. A phone turned debit card might be particularly useful in those countries where credit card uptake is comparatively low, but pre-paid mobile phone usage is high. This is the case not just for developing countries; Italy's high growth in mobile phone usage owes much to the prepaid system. In many countries, pre-paid services draw in customers who fail credit checks required to set up monthly mobile phone subscriptions.

Operators could also offer a credit system by adding online purchases to their customers' monthly bills. Since the SIM card can identify the customer, it provides a degree of security which is not available for consumers performing e-commerce over a PC.

It comes as little surprise that mobile operators around Europe are greeting m-commerce enthusiastically.

Half-man, half-phone?

As Telecom Italia Mobile (TIM) points out, a SIM card is fast becoming capable of storing not only phone credits or subscriber identity information, but also serving as a credit and debit card, a driving licence and a health card, all rolled into one.

The average mobile phone customer may feel queasy about storing so much data on a microchip controlled by a mobile operator, especially as dot.coms have already come under fire for gathering customer information to sell.

Yet TIM is one of many operators hoping to offset falling voice call revenues, with revenues from m-- commerce. The Italian operator expects 15% of its revenues to come from mobile commerce between 2002-2004, compared to 5% between 2000 and 2001.

So far TIM has introduced a commerce application for buying and selling securities in Milan, New York, Paris and Frankfurt and hopes to see its customers using mobile phones to pay utility bills and transfer money.

Other early mobile commerce applications under development around Europe include micropayments for cinema tickets and newspapers, as well as online gambling.

# posted by Medical Information : 2:52 AM