What is mCommerce?

Obviously the "m" in mCommerce stands for "mobile" - but depending on who you ask, there are very different interpretations on what mCommerce means. There is even a lack of agreement on the basics, such as who is mobile (e.g. the consumer, or the merchant), what is mobile (e.g. the device, or the account).

Let's take a look at the view of the major card schemes (Visa & Mastercard). In discussions on mobile payments, they then to focus on their proximity payment solutions, contactless solutions, & NFC solutions. Solutions such as putting a sticker on the back of your mobile phone, so it can be used to perform contactless payments in a retail environment. But are contactless or proximity payments are really what people have in mind these days when mCommerce is discussed? It would appear that once again the card schemes are well behind the curve when it comes to addressing the needs of mCommerce.

Secondly, there are the numerous new mobile payment schemes which have emerged (e.g. Boku, Zong, Bling, to name but three of the hundreds of schemes out there), who take the view that mCommerce is about utilising them as the payment mechanism, instead of the likes of Visa & Mastercard. You may not recognise any of these names currently, but in the next 3 to 5 years one of them is going to be a big winner, and will be as recognisable a brand as PayPal is today.

If you talk to the mobile carriers about mCommerce, chances are they will talk about the notion of “Bill to Carrier”, where any payment you make is debited to your mobile bill. Again, this cuts the card schemes out of the loop, so it is no longer a requirement to have a Visa or Mastercard to make purchases. The major downside is that the mobile carriers take from 25% to 50% of the revenue generated, which really limits the potential. A mobile subscriber may pay €1.25 to download a tune that costs €1 normally – but will they pay €12.50 for goods that normally cost €10? Probably not, so this severely limits the market for what can be sold using bill-to-carrier. The mobile carriers also have the potential to be a major influencer on how mCommerce develops, but their main issue is that they have not developed a workable business model on what their position is in the whole loop – do they see the traditional financial players as their partners, or their competitors?

And there is also the potential for some other player e.g. Google, to establish themselves in the mCommerce arena. Google especially follows eyeballs, as this is it’s business model – and as the eyeballs have been moving to mobile devices, Google has been playing catch-up with developing its own mobile strategy, via a number of recent strategic purchases, including a Mobile Payment Gateway.

However, if you are to ask the “man in the street” for his view of mCommerce, there does seem to be an element of consensus that emerges.

Most people’s experience of mCommerce to date has involved interaction with a merchant via a Smart Phone or similar device; and notwithstanding the number of “mobile payment mechanisms” that are available, the payment method of choice for mCommerce continues to be the credit card. In effect, consumers consider mCommerce to be an evolution of the current eCommerce experience - but on a mobile device, instead of a laptop or PC. With the development of Smart Phones (especially the iPhone), always-on broadband connectivity, and enhanced user interfaces (expecially Apps in the iPhone), the stage is finally set for major consumer adoption of mCommerce.

So in the short term forget about contactless payments, mobile payment schemes, and bill-to-carrier, the main opportunity for mCommerce is making the eCommerce experience accessible from a mobile device.