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The Mobile Commerce Movement..

November 15, 2009 Leave a comment

In this article, Teaching Markets New M-Commerce Tricks, some countries in Europe and Asia appear to have much more robust mobile commerce and mobile payment environments than in the U.S., where consumers are just beginning to use such services. Previous infrastructural and institutional development in the U.S. can make it harder to deploy new systems, though some e-commerce operations are making headway.

Back in 1999, national mobile payments systems were introduced in the Philippines, as Smart Money, and in Japan with the launch of the first mobile Internet platform, mobile carrier NTT Docomo’s i-Mode.

How is it these countries went ahead with m-commerce and m-payment systems a decade ago, whereas the U.S. is still limping toward those goals? “Japan is structured very differently from the U.S., with a single dominant carrier, NTT,” Conrad Sheehan, founder and CEO of mobile payments specialist mPayy, told the E-Commerce Times. “Developing nations, on the other hand, have the key advantage of having little to no legacy infrastructure, be it wireline phones, robust ubiquitous ATM networks; or POS terminals.” Sheehan should know — he was a senior vice president at JP Morgan Chase, where he headed its consumer payments business.

In other developed nations, mobile commerce, or m-commerce, starts with mobile banking, then is followed by mobile payments and finally by mobile remittance, Diarmuid Mallon, senior product marketing Download Free eBook - The Edge of Success: 9 Building Blocks to Double Your Salesmanager at Sybase (NYSE: SY) 365, told the E-Commerce Times. That’s the pattern evolving here. Lots of U.S. banks now allow their customers to do banking from their mobile devices.

“In both cases, the m-commerce services that are successful focus on the consumers’ immediate needs,” Mallon said. “In developed markets, the initial need is to manage your finances, while in developing markets, bill payments and transferring money are the focus.”

Only 7 percent of all mobile subscribers had engaged in any sort of m-commerce within the past 30 days in the second quarter of 2009, according to Nielsen Mobile. Of these, only 25 percent made a purchase through their smartphones.

“The implication of this is that m-commerce in the U.S. is still in the early days,” Chris Quick, mobile media analyst at Nielsen Mobile, told the E-Commerce Times. However, m-commerce can quickly gain momentum as consumers continue to adopt smartphones and subscribe more to data plans. How quickly networks and other providers can build out their infrastructures is another factor. “Carriers, retailers and financial institutions have to deliver payment systems that consumers believe are 100 percent secure and private,” Quick explained.

Two leading retailers, Amazon and PayPal, are launching projects that might speed up the development of m-commerce here in the U.S.

Earlier this month, PayPal opened up its global payments platform, PayPal X, to application developers. It unveiled new application programming interfaces (APIs) as well as a new developer portal. It also demonstrated a mobile payment software development kit (SDK) that lets developers embed payments directly into mobile applications, starting with iPhone apps.

At around the same time, Amazon.com announced Amazon Mobile Payments Service. This gives developers, merchants and distributors of mobile apps a way to process payments from mobile devices.

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Good news to Filipinos, since we are being recognized as one of the few countries who are using m-commerce for payments; using it for banking would be certainly on its way. Perhaps, why the U.S is still on the verge of beginning its m-commerce industry, is because of its markets’ structure, as it  focused more on the banking sector to utilize m-commerce. But I’m pretty sure, that they’ll also catch up with the years ahead; the country should just have to clear things out and build its foundation on m-commerce suiting the nature and condition of its own economy.

On a second note, Amazon and Paypal are also doing a very splendid job for opening services which will enable countries, particularly the U.S, to tap the power of smartphones in doing business. Through the Paypal SDK, and Amazon’s payment service, businesses and individuals alike are surely going to experience the convenience of transacting using their mobile phones.

Posted by: Luigi Dollosa