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M-Commerce Mounting But With Its Own Loopholes
M-Commerce Mounting But With Its Own Loopholes
By: iMedia News Bureau

Mobile phones have a higher penetration rate than Internet in India and majority of the population are ready to embrace m-commerce in a big way.

As we appreciate the way Internet has changed our lifestyles, increasing popularity of the mobile phone and developments in mobile technology have taken us to a new route.

Publicized as the next generation of e-commerce, mobile commerce (m-commerce) enables users to access Internet without the need to find a place to plug in. A vast segment of the population who neither had a landline nor a bank account have made a generation leap and nor did they own a mobile handset, but are now well poised to transact on their mobile phone.  And this is all because of a regulatory regime, huge capitals outlays for network expansion by telcos, reduced tariffs and consistent reduction in the cost of mobile handsets.

Interest in m-commerce is increasing from both consumers and retailers globally. A new report by Barclays Corporate shows consumer spending on mobile phones and tablets in the UK will rise significantly over the next few years although other research reveals consumer frustrations with mobile payment methods.

By 2016, British consumers spending on mobile devices is forecast to increase by a healthy 55%, according to research by Barclays Corporate. By 2021, that spend will increase to over $30.4billion, or 4.9% of total retail sales, compared to the $2billion spent this year. However, when it comes to making payments by mobile consumers they remain frustrated with the process and the choices currently available to them. A survey by Consensus for WorldPay found the top frustration is lengthy payment processes (39%) followed by the amount of information required to be entered (38%).

Other frustrations include websites that are not optimized for mobile use (31%), acceptance of preferred payment method (17%), and no app being available (9%).

The preferred method of payment among consumers was found to be eWallets (63%) rather than credit cards (37%) or even payments through a mobile phone network (14%).

According to the latest British Retail Consortium and Google Online Retail Monitor, mobile is driving up retail searches and now accounts for 10% of all retail searches. Mobile search volumes have increased 168% year on year in Q3 while retail searches on desktop rose by 35%.

The mobile penetration is at ten times of the PC penetration and is expected to become 1 billion by 2014 in India. The mobile channel has provided a rare opportunity not only to leapfrog years of poor infrastructure development but also in bypassing geographical constraints to bring massive benefits and lifestyle changes to millions of under-served people across India.

One key component to m-commerce's potential success is establishing a comfort factor among consumers when it comes to paying for things with mobile phones. Facebook's role in helping to mainstream this trend should not be overlooked. The company has begun testing mobile payments which would allow users to purchase Facebook credits via their cell phones.

Although not in effect yet, once the "flip is switched" so to speak, there will immediately be a large potential customer base for using mobile payment technology. And because it's Facebook, there will be a certain level of trust in the technology.  In addition to the Zong/Facebook partnership, a mobile payment service called Boku has already launched within Facebook and in other social networks, too.

M-Commerce model has been adopted by players like M-Check, Obopay, Paymate etc require users 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 it’s 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.