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CHAPTER 6
MOBILE COMMERCE

6 . 1 INTRODUCTION
another term that has
of Electronic Commerce,
With the increase in usage
is a type of commerce that is
or m-commerce. It
surfaced is Mobile Commerce
more, especially economically developed countries.
in the
spreading increasingly mobile marketing can be
sales opportunities online,
While E-Commerce brings
new
new medium so that customers can
in this relatively
used to expand coverage
easier regardless of hour o r location. Thus, sometimes
much
interact with the brand
E-Commerce activities pertormed
by people while on the
t is also referred to a s
E-Commerce businesses
which is changing the way
move. It is a revolution
approach customers. enabline
that people work and is increasingly
the way
Technology is changing h u m a n s . v o D i l e is becoming the foremost
software to substitute for
nachines and challenging ilany
and an indispensable tool ror work,
chann
annel for commerce
first" strategies.
infrastructures and develop "mobile
or"anizations to upgrade their growing
cloud computing
computing) big data and growing
of social media,(< cloua
The convergence
 6.2
Mobile merce
demand for anytime
anywhere access has led to the
emergernce of information
technology in all areas of the business
enterprise. The number of smart phones and
tablet or
laptop users
making purchases on their mobile devices
significantlyin every
year. Thus, with the
are
increasing
around the globe in recent steady rise in mobile
technology all
years, many businesses have made Mobile
M-commerce, a topmost priority for their business. Massive
commerce, or
enterprises to take advantage of connected devices opportunities exist for
such as mobile
etc. that
capture vast amounts of phones, laptops
new
markets and introduce new information, transform existing products, enter
delivery and business models. Now that
social platforms and many of the most
companies
mobile-first, thus, mobile commerce has doing business on them are thinking
any business. become an integral part of the
strategy of
However, the evolution of the digital
also presents enterprise in the form of mobile commerce
significant challenges including new
engagement and business models, privacy competition, changing customer
and cyber security threats. concerns, unprecedernted
transparency
6.2 DEFINITION OF MOBILE
COMMERCE
Mobile commerce, also referred as
commercial transaction m-commerce, can be defined as
activity conducted with the use of any online
devices, such as mobile phones wireless handheld
and laptops.
The term online
commercial activity
range of products and services such as includes the purchase and sale of a wide
purchases on mobile web and apps
mobile payments
mobile money transfers and
m-banking
information delivery such as enquiring
schedules etc.
the airlines, train and bus arrival

and mobile financial services.

Thus M-Commerce includes any activity such as
exchange of information, goods
and services, online financial transaction, or theshopping transfer of funds etc. done
M a r i l e C o m m e r c e
6.3
E-Commerce

11gh the use

of mobile technology. M-Commerce is of the extension
t h r o u g h

location
telecommunications and from fixed
from
wired to wireless computers and
wire

is used, the
anywhere and any device. When the word mobile commerce

anytime,
to is not onlyy commerce
that come to mind are mobile phones. But Mobile
devices
f i r s td e v i c

such as a smart
using a mobile phone but using a variety of other devices
ducted
cond

the following
a notebook o r a laptop. Any device that
has
blet,
phone,a tabl
nhone, a a phablet,
features may be used to support mobile commerce:
tw

.Portable and mobile

Has the ability to gain access to a network

current commerce industry, M-Commerce has

entered in various fields
In the
retail services, telecommunication and
information technology
Such as finance,
these industries in a
services.The rapid growth of mobile commerce has affected
number of ways:
customers use their
Financial Services which includes mobile banking where
well as
handheld devices to access their accounts and pay their bills as
which stock c a n be displayed and trading
brokerage services, in quotes
conducted from the handheld device.
and
services, which include the delivery of
current news
Information

updates, navigation information such as traffic and parking updates on a

mobile device.

Telecommunications, in which customers are able to see change in services,

be conducted from the handheld device.
bill payment and account reviews all
c o n s u m e r s are given the ability to place and
Service/retail industry in which
pay for orders.

AND M-COMMERCE
6.3 DIFFERENCE BETWEEN E-COMMERCE

though both have made the customer's lives

E-Commner and
ommerce
ser
as
m-commerce,

but they have different meanings. E-Commerce is an umbrella term for selling

and buying Mobile Commerce, or M-Commerce, is subset

products online, while
a
buying
of ECLommerce that focus on purchasing and selling products via mobile devices.
6.4 Mobile Commerce
Sr.
No. E-commerce M-conmerce

1 E-Commerce is the superset of M- M-Commerce is the subset of F.

Commerce. Commerce
2. E-Commerce is defined as any kind of M-commerce refers to the commercial
Commercial transaction that is activities which are transacted with the
conducted over the internet using help of wireless computing devices such
electronic system. as cell phoneor laptops.
3 E-Commerce mainly makes use of M-Commerce uses mobile devices such
computers, and
and requires internet as smartphones, PDAs, tablets, iPad etc.
connectivity and it relies mainly on an internet
connection provided by wireless
telecommunication networks.
A E-Commerce is not as portable and M-Commerce provides more portability
flexible as M-Commerce as internet and flexibility since these devices come
connectivity is required in E with their own connection to the
Commnerce. internet using telecommunication
networks.
. The reach of E-Commerce is only at The reach of M-Commerce is broader
the places where the electricity and due to its
portability.
the internet are available
6. The location tracking capabilities ofE- M-Commerce apps can provide
Commerce are limited due to the
nonlocation-specific content and
portability of devices. personalized recommendations as they
can track and identify user locations
with the help of GPS technology, Wi-Fi
etc
7. The security capabilities of EThe security capabilities of M-
Commerce are simple as it provides Commerce are more extensive as in
regular security measures like two- addition to regular security measures
factor authentication and multi-level like two-factor authentication and
authentication while making payment multi-level authentication, M
throughcredit cards. Commerce can also offer biometric
authentication via face ID, retina scans,
fingerprints etc.
Marile ierce 6.5
In E-Commerce, a constant connection In M-Commerce it is not mandatory t
8.
an electric outlet is mandatory to
topower the devices. power mobile devices as they c o m e with
v
their own batteries. Thus it is possible
even
to do shopping via mobile devices
without electricity .

BENEFITS OF MOBILE COMMERCE

6.4

well as users
M-Comnmerce provides a number of benefits to both businesses as

for it.
that opt

6.4.1 Benefits to business:

mobile devices
There are a why more businesses prefer using
number of reasons

and commercial activities which are given below:

in transactions

biggest advantages of mobile

commercee
Attracts new customers: One of the
customers. Mobile searches
is that there's always the potential to bring in new
are going to find the site, and
the
are one of the major ways that customers

the site is, the higher the chances are of gaining moree
more optimized
networks also be used to forward users to
business. Mobile advertising can
which
an app as well the site of business. Moreover, mobile re-targeting,
as
to attract them to
displays ads to those who have recently visited the website
items looked at, which proves highly beneficial
they
go back and purchase
tool for the business.

Offers global reach: playing a great role in businesses,

As mobile devices are

so more and more businesses

are adopting mobile commerce to reach global1

businesses to enter bigger markets and

audience. Mobile commerce allows
large base results in increase in
wider target audience. This
user
reach a

potential sales for businesses.

and relationships between the parties
Improves
Improves communicationsS

mobile devices leads to better

involved: The instant connection made through
their suppliers, sellers, distributors and
relations between businesses and
Commerce helps in building customer lovalty and
Customers. Thus, Mobile
their retention.
6.6 Mobile Commerce
Improves efficiency: Mobile commerce improves efficiency as it decreases
the time and costs that would have been spent on dealing with middlemen as
as
communication is done directly. The use of mobile devices will also reduce
the costs usually associated with the delivery of goods and services, such as
storage and warehousing costs and the cost of maintaining physical stores
and locations of businesses.

Convenience of electronic payment services on mobile: Payments can be

transferred easier and more secure using mobile devices. Due to the fast
development, this type of commerce also supports almost all popular
payment method for customers to pay bills electronically and solve complex
transaction problems.

Push notifications provides personal touch: Mobile Commerce provides the

option of push notifications with the help of which businesses can improve
conversion rate by targeting potential customers precisely. As mobiles are
carried along almost everywhere person goes, chances of prompt
a
push
notifications increase manifold which, in turn, improves business.

6.4.2 Benefits to úsers:

M-Commerce is a part of E-commerce which allows people to do the
transaction through mobile devices. There are numerous existing M-Commerce
services and applications nowadays that bring many M-commerce advantages to the
customers:

Convenience: Mobile Commerce is convenient for customers as with just a

few clicks on mobile devices, customers can do shopping,banking related
tasks, download media files etc. The round the clock (24X7) availability0
offered by the internet is also available to mobile commerce users. Thus it
offers the convenience of anytime, anywhere browsing as they need not travel
to the store to buy their needs, instead they can purchase their products using
wireless devices at convenient times and from the confines of their homes or
any other place, provided it had internet connectivity. This reduces their
effort, money and saves their time.
bile
contact: Customers reach out to businesses more if ie's easy
eovides instant
Pro
One step caling through various means such as live chat assistance,
for them.
for
customers contact
neclick calls and toll free help desk numbers, all help the
'This was not possible with the traditional ways of
husinesses much easily.
mails and large awaiting response.
Mobile commerce depends on network signal. There is no
Easy Connectivity:
network
as long as the
need for modem or WI-FI connectivity set up. Thus, and do
is available, users can use their mobile devices to connect
signal
transactions.
M
users as doing
time efficient for
Time Etficient: Mobile commerce prove
device like
Commerce transactions do require the users to plug any
not

or laptop or wait for them

to load.
personal computer
mobile device to do
timeliness: User using a
Mobile devices promote to
and this also stimulates the businesses
transactions, can do it in real-time,
timeliness.
their end of the transaction. Thus it provides
fulfill
choose from being
reachable or not. They can
Flexible Accessibility: User can
and
devices well as various mobile messengers
as
be accessible via mobile choose not
the user may also
On the other hand,
other networking platforms.
down his mobile device.
to be reachable by shutting

COMMERCE
|6.5 ISSUES IN MOBILE
is not without its challenges
perfect, just as
e-commerce

Mobile commerce is not

m - c o m m e r c e to deal
with these issues
of
and problems. It is then up to adopters
accordingly.
Issues: The primary issue
in Mobile commerce (or any
Security and Privacy still nurture a
revolved around security. Users
transaction done over internet)
comes to doing
transactions using mobiles
of distrust when it
certain level
network. Users feel anxious that
their devices would be
over internet and
the theft of personal data. This is the reason
attacked by viruses resulting in
of capabilities available to them. They are
that mobile users do not make use
their personal information and payment details
always hesitant while sharing
6.8 Mobile Mobile Commerce
over the network. They simply do not have enough trust that that the content
they will download is completely safe to use and they are protected. Incidents
ts
of identity theft and hacking also lead to security concerns among
users
Location management issues: Mobile commerce is largely dependent on the
location information of the users, products, services, devices and servers.
The
location management becomes a challenging task because of the
mobility
involved in mobile commerce. Issues in location management
include
updating the location, precision in tracking, storage and access of the tracked
information, updating of the existing location management schemes with few
modifications, the overhead of location management for various mobile
commerce applications under different network and transaction size and
mobility patterns. With the varying requirements in scalability, precision, and
delay between different M-Commerce applications, tracking becomes more
challenging.
Limitations of mobile devices: Smart phones, hand held devices such as
Personal Digital Assistants (PDA),
palm sized computers, laptops, tablets and
vehicle mounted interfaces are some of the
examples of the current wireless
devices. Although flexibility and mobility are the main
advantages of the
mobile terminals, but on the other hand they lack in several
aspects when
comparedto desktop computers. Most of the mobile devices have constrained
display capabilities which provide small screen size and low resolution. Due
to small and multifunctional keypad, there are
limited and complicated input
options. Mobile devices also have limited memory and disk
capacity,
processing and computational power with limited battery life. All these
drawbacks may lead to the limited usage of mobile commerce.
Mobile Website Design Issues: Mobile or handheld devices
commonly used
today include phones, and palm sized computers. These devices offer a
limited screen size. But in web
browsing users can get a rich experience of
browsing the product details on 800x600 pixel sized screens with rich colors
and a tool set to offer 3-D and even
video experience which is not available
while browsing on mobile. The
physical lightness and small-size of the device
poses limitations in the development of convenient input and display
Mobile Commerce
6.9
interfaces. Moreover mobile devices also have limited computing powe
storage capacity arnd memory. As a result, they are unable to run and s u p p t
complex applications. Thus the businesses should design mobile friendiy
websites because users tend to be put off from making any purchase wnen

they come across a mobile-unfriendly website.

.Wireless Infrastructure and signal issues: The wireless communicafion

intrastructure required for mobile commerce is complex. The success Or

mobile commerce depends on the development of appropriate services and

standards. Bandwidth and data transmissions are some of the obstacles for
mobile commerce as wireless networks bandwidth are less as compared to
the wired network. Moreover, due to atmospheric interference, there is fading
of signal in wireless channels which causes frequent data errors and
sometimes even disconnection. A disconnection in middle of a financial
transaction can leave the user distrustful and unsure. As the users move from
cell to cell, there are frequent handoffs which also add vulnerability. Thus,
device inefficiency may become a major issue for the adoption of mobile
commerce.

Legal and Regulatory challenges: Mobile commerce also faces various legal
and regulatory issues and challenges which includes safety along with many
others. The difficulty in the application of the traditional laws and principles
in the usage of wireless technologies is an issue facing mobile commerce.
There are various legal issues that need to beconsidered in mobile commerce,
among them are the m-commerce contracts and identification of contracting
parties and their legal capacities.

6.6
3 SS
MOBILE COMMERCE FRAMEWORK *

With the introduction of the Internet, electronic commerce has restructured

traditional commerce and boosted sales and exchange of information and
merchandise. Moreover with the emergence of mobile and wireless networks, there
1S an extension of electronic commerce to a new research area known as mobile
Commerce, which involves the exchange or buying and selling of goods, services, or
Ormation on the Internet through the use of wireless handheld devices.
6.10 Mobile Commerce
The following steps show how a user request is processed by the components in a
mobile commerce system:
1. Mobile user initiates
request.
2. Transmission towers receive and send out
encrypted sigrnals.
3. Landlines relay the signals.
4. Mobile middleware such as WAP, iMode etc. finds the Web Servers.
5. The Internet is used to hosts billion of web
pages.
6. Web Servers in host
computers respond to the requests.
7.
Usually web pages and responses are coded in HTML.
8. Encrypted responses are translated into wireless languages.
9. Micro browsers display the
responses in wireless languages.

2. Transmission towers 3. Landlines relay 4. Mobile middleware 5. The Internet

prick up and send out the signals. such as WAP finds hosts 2 bilion
encrypted signals the Web servers. Web pages.
1. Mobile users

initiate requests

8. Encrypted
responses
are tránslated into
9. Microbrowers
7. Web pagés wireless languages.
display the and
responses
in wireless
responsess 6. Web server in

are usually host computers

languages.
codedin respond to the
HTML requests.

Fig. 6.1 A flowchart showing how a user

request is processed by the components in a mobile commerce system
Mobile commerce
applications require a reliable, wireless network infrastructure
to execute transaction and the information in a distributed
move
These applications also depend upon two key environment.
component technologies, i.e,
information distribution protocols to move digital data and transaction information
over mobile networks and the mobile device
compatible information publishing
languages necessary for the creation of suitable digital content that can be browsed
Mobile C o m m e r c e
6.11
memory and storag
hrough handheld devices with limited processing capabilities, forms tne vety

Thus, in
the modle framework, network infrastructure
commerce
that
a r e the
two pillars
foundation while
foundation wi publication and distribution technologies
the creation of distributed mobile commerce applications.
supportth
support electronic
and mobile applications,
In addition to network infrastructure business
also needs a business service infrastructure to
flourish. The
commerce services and
infrastructure includes location and search services, directory
service infra:
service
for secure, reliable and non-repudiable transactions.
frust mechanism
of various
electronic comprising
The multi-layered architecture of
commerce,

shown in Fig. 6.2

blocks, are

Mobile Commerce Applications

Information
and Mobile
Mobile device
device

Business Service Infrastructure, Legal framework Compatible

Dissemination
Network/Protocol Standards
and publishing
Distribution languages eg
(Middleware) WML, cHIML,
Protocols WAP, Mobile Payment Models Voice XML
iMode

Security and Encryption Techniques

Wireless Network Infrastructure

Mobile Commerce
Architectural Framework of
Fig 6.2

The framework describes various

essential technology enabled building blocks
market opportunities.
0r
creating new market and
mobile commerce architecture are described
All the building elements of the
below.
6.12 Mobile Commerce
1. Wireless Network Infrastructure: The combination of several technologies
such as embedded
operating software for processing information, availability of
digital communication and digital connectivity through hand held devices anda
wireless networks are all essential
requirements for operation of mobile commerce
applications.
Wireless networks have gradually developed from the basic voice only radio
based analog transmission to the digital voice and .

data transmission capability.

Wireless networks today are capable of achieving 100 Mbps data rates. Table 6.1
represents the evolution.of the wireless.networks.

Table 6.1

Generation Channels Switching Examples Data Rates

Mode
Analog Voice Cireuit SwitchedAMPS N/A
2G Digital Circuit SwitchedGSM 9.6 Kbps
,

Packet Switched CDMA

25G Digital1 Packet Switched GPRS 171.2 Kbps
EDGE 384 Kbps
SG Digital Packet Switched CDMA2000 and 2 Mbps
WCDMA
4G Digital Packet SwitchedLTE Advanced and 100 Mbps
Mobie WiMAX
In the cellular mode of communication large geographical regions are identified
and allocated to service providers. The Telecom Regulatory Authority of India
(TRAI) handles the allocation and other regulatory issues, such as how many
players can operate within a specific area. Each of service provider is allocated a
separate frequency sub-bands within the overall frequency allotment. Service
providers operating in a particular region divide the entire region into smaller area
called cells.
1. Advanced Mobile Phone System (1G): Advanced Mobile Phone
System (AMPS) was an analog mobile phone system standard developed
Mobile Commerce 6.13
that uses separate
by Bell Labs. It is a first-generation cellular technology
and is also referred to a 1G
requencies, or "channels", for each conversation
network.
Global system of Mobile
Communication (2G): GSM (Global System for
Mobile communications) is a standard developed by the European
lelecommunications Standards Institute (ETSI) to describe the protocols for
devices such
networks used by wireless
second-generation digital cellular network
as tablets. GSM standard originally
described a circuit-switched
as a
developed as
for full duplex voice telephony and
were
optimized is
first analog cellular networks. The network
replacement for generation
structured into a number of sections:
controllers
i) Base station subsystem- the base stations and their
Network and Switching Subsystem the part of the network most
-

(i)
network"
similar to a fixed network, sometimes just called the "core

GPRS Core Network- the optional part which allows packet-based

iii)
Internet connections

network maintenance
(iv) Operations support system (OSS)
-

3. Global Packet Radio Service (2.5G): 2G cellular technology combined with

General Packet Radio Service (GPRS) is sometimes described as 2.5G, that is,
mobile
a technology between the second (2G) and third (3G) generations of
telephony. GPRS is a packet oriented mobile data standard based on the 2G
and 3G cellular commuunication network's GSM. GPRS is a best
effort service, implying variable latency and throughput that depend on the
number of other users sharing the service concurrently. In 2.5G systems,
GPRS provides data rates of 56-171.2 Kbps while EDGE provides date rates
upto 384 kbps.
4. 3G Networks: 3G, short for third generation, is the third generation
of wireless mobile telecommunications technology. It is the upgrade for
2G and 2.5G GPRS networks, for faster internet speed. It is based on a set of
standards used for mobile devices and mobile telecommunication services
and networks that comply with the International Mobile
Telecommunications-2000 (IMT-2000) specifications by the nternational
6.14
,

MobileCommerce
Telecommunication Union. 3G has number of applications such as mobile
Internet access, wireless voice telephony, video calls and mobile TV, fixed
wireless Internet access etc. 3G telecommunication networks
support
services that provide an information transfer rate of at least 2 Mbps. The two
common standards that comply with 3G Standards are:

) CDMA 2000
(i) W-CDMA
5. 4G Networks: 4G is the fourth
generation of broadband cellular
network technology, succeeding 3G. It provides data rate of up to 100
Mbps.
As compared to earlier
generatiorns, 4G system does not support
a

traditional circuit-switched telephony service, but it

supports Internet
Protocol (IP) based communication such as IP
telephony. Thus, potential
and current applications of 4G networks include IP
telephony, amended
mobile web access,
high-definition mobile TV, gaming services, video
conferencing, 3D television etc.
2. Information Dissemination and Distribution Protocols: The
Information
dissemination and distribution protocols are used to
provide
the software layer
between the operating system and the distributed applications that interact via the
networks. The primary objective of these
protocols is to hide the underlying
networked environment's complexity by
insulating applications from explicit
protocols that handle data replication, disjoint memories, network faults and
parallelism. The major task is to seamlessly and transparently map Internet contents
to mobile stations that
support a wide variety of operating systems, markup
languages, micro browsers, and protocols. In a wired internet environment File
Transfer Protocol (FTP), Hypertext Transfer Protocol (HTTP) and
Transfer Protocol (SMTP) are used for exchanging multimedia contents Simple Message
such as
graphics, audio and video data. But these protocols do not work well in text,
wireless
environment due to internet bandwidth
limitations, mobility, limited
and storage and mermory processing
capacity of
devices. Thus, two competing standards, WAP
and i-Mode were developed for information distribution and access for handheld
devices.
1. WAP: Wireless Application Protocol (WAP) is a standard for accessing
 6.15
Mobile Commerce .

of
information over wireless mobile network. Before the introduction
a
offer interactive
WAP, mobile service providers had limited opportunities to
Internet basea
data services, but needed interactivity to support Web and
etc. Thus
applications such as news, email, sports headlines, stock prices
mobile devices
WAP came into existence. A WAP browser is required for
WML is the language
such as mobile phones that use the WAP protocol and
But most modern
used to create the pages displayed in a WAP browser.
do not need
handset internet browsers now fully support HTML, thus, they
most are no longer
to use WML for web page compatibility, and therefore,

able to render and display pages written in WML.

in Japan
2. i-Mode: The NTT DoCoMo, the largest telephone service provider
started Internet service over cell phones in
1999 known as i-Mode.
of a wider variety
Unlike Wireless Application Protocol, i-Mode comprises
of internet standards which includes packet-switched
network, web

access, e-mail, etc. As compared to Application Protocol (WAP)

the Wireless
standard, which used Wireless Markup Language (WML) for wireless
handheld devices, i-mode uses DoCoMo proprietary protocols- ALP (HTTP)
and TLP (TCP, UDP), as fixed Internet data formats such as C-
well as

HTML, a subset of the HTML language designed by DoCoMo. i-Mode users

have access to various services such as e-mail, sports results, weather

forecast, games, financial services, and ticket booking.

3. Security and Encryption: The concept of security in M-commerce is the most

important aspect of a business that a mobile or wireless system should respond to.
There is no need to implement insecure system where transactions involve monetary

value. Encryption techrniques such shared/symmetric key as well as the

as

public/private key pair based encryption techniques along with the public key
infrastructure (PKI) supported digital signatures have been used for addressing

security issues in electronic and mobile

commerce.
transaction

For electronic commerce two issues need to be addressed form security point of
view:
1. Protection of the source of information that is being made available online.

travels the network.

2. Protection of the transaction that
over
 6.16 MobileCommerce
In mobile commerce
environment, since the information is made available
through the WAP gateway or through iMode, the information security depends
upon the security provided by the appropriate gateway protocols.
The second issue of securing the
transactions carried out between the
information server and the mobile user requires addressing of several security and
confidentiality related issues.
The three
fundamental issues that need to be addressed to create a trustworthy
business environment are the following:
) Authentication: Authentication
,
ensures that the contentof the transaction
originates from the presumed sender/partner. There are several
i

Authentication Protocols (EAP) for mobile networkswhich Extensible

unauthenticated and unauthorized access such as Transport Layer prevents
(TLS), Tunneled Transport Layer Security (TTLS), Security
Protected Extensible
Authentication Protocol (PEAP), Extensible Authentication Protocol-
Flexible Authentication via Secure Tunneling
(EAP-FAST) etc.
ii) Integrity: Integrity ensures that the
content of transaction is not modified
during the delivery and4 cannot be altered at any
the time. In mobile commerce,
Temporal Key Integrity Protocol(TKIP) and Message
(MIC) protocols have been developed for Integrity Check
ofdata. ensuring integrity and validation
(iii) Confidentiality: Confidentiality
ensures privacy, the content of the
transaction cannot be viewed byy
unauthorized
encryption. As Wireless networks transmit radio persons and enables
possible for anyone to access, record or signals through air, it is
of all transmission is intercept them. Therefore encryption
of utmost importance. But due to
processing and memory power it is not limited computing,
standards higher than 256 bits. possible to support encryption
4. Mobile
Payment Methods: A reliable mobile
of a
mobile payment service, as customers network is
a critical component
problems when they impact financial have much less patience for transmission
network is a critical aspect that needs transactions. Therefore, access to a reliable
to be considered. There are
models that are considered in mobile three payment
environment:
 Mobile Commerce ,3
6.17
all the interactions
(i) Acquirer Centric Models: In the acquirer centric model
with the mobile devices are handled by the merchant or his agent.

issuer and theP

(ii) Issuer Centric Models: In the issuer centric model the
through agents
using the mobile device interacts directly
or
customer who is
about the
and handles the whole process. The merchant is not concerned
process being followed processing a payment.
at the issuers end for
the
iii) Mobile operator Centric Models: In the mobile operator
centric model
service.
mobile operator acts independently to deploy mobile payment
Standards: The next
5. Infrastructure, Legal framework and Network/Protocol
concerned with technology and legal
infrastructure for
level of the framework is
Wireless
Mobile Commerce. This includes wireless communication technology,
wireless network &
middleware technology, information exchange technology,
Essentially, these are the core
application protocols and mobile security technology.
users in their
and infrastructures that enable mobile
technological components Mobile
level of the framework i.e.
environments. These technologies support upper
framework to electronic and mobile
Commerce applications. To provide the legal
formed
commerce transactions in India, the Information Technology Act 2000 was

is need of certain modifications in

emerging technologies there
a
but due to the new
the IT ACT 2000 to expand its scope.
Mobile Commerce has
6. Mobile Commerce applications: The need for
only not cover the electronic
times. Mobile Commerce
increased manifold in recent
also include new applications,
which can be performed
commerce
but
applications, has
by using mobile computing technology. It
at any time and from anywhere
areas such as finance, healthcare, retail,
entered into vast application
services etc.
telecommunication,
information technology, sales and
Mobile Commerce are briefly discussed below:
Some of the applications of
M-Commerce customers can
mobiles and
1. Mobile Entertainment: Using
as music, games,
movies, ringtones,
purchase mobile content such their mobile
will be sent directly to
and they
wallpapers and e v e n apps,
music player. Wireless
acts as a portable
Phone. Mobile terminal also manufacturers are earning good
providers and mobile
phone
Connectivity softwares and applications
customized
Oney by selling different kinds of
6.18 Mobile Commerce
that suits one's needs. Customers can play multi player games through
mobiles. Mobile games have also become one of the successful m-commerce
applications as it generates good revenue.
2. Mobile financial services: Mobile Commerce is widely used in the area of

finance. The customers use their mobile to pay from their bank account
using mobile commerce facilities. They can transfer funds between account
Or receive any information related to finance from banks or financial
institutions. Using Wireless Application Protocol (WAP) based mobile

devices, the user can access the internet or the website of the financial
institutions. Customers can inquire about their bank balance, manage their
bank acounts, remit money and transact with their bank through mobile
For
phone. Money can be transferred through the use of mobile devices.
financial
example, a user of the credit card gets a reminder from the bank or
institution about the amount of outstanding balance, minimum amount due
and the due date. Similarly when the customer pays through cheque or
when the payment is made by him through means like debit/credit card or
S internet banking, the institution sends an acknowledgement through SMS

stating the has been received by the institution. Another

amount that

example stating application of Mobile Commerce in the field of finance

is iMobile application launched by ICICI Bank. iMobile allows the
customers to carry out all internet banking transactions through mobile
Customers transfer funds to ICICI as well as non ICICI Bank
phones. can

accounts with the help of their mobile. It also allows customers to perform
other non-financial activities like requesting for a cheque book or stopping

payment of a cheque through mobile device. Customers can also pay their
utility bills through this facility. It allows them to know their transaction
details and payment due dates through mobile phones.
3. Location and Search service: Sometimes users may not want to purchase

something, butwould be concerned in receiving information, such as

they
stock and
local weather, news, movie and TV programming schedules,
Mobiles enable
financial quotes, sports scores and even traffic reports.
click. For example
get all the intormation of their choice on
a
customers to
are able to check public examination results or
their
through SMS, students
university results.
Mobile Connerce 6.19
4. Mobile Marketing: People check their mobile phones more often than their
desktop computers, so advertisers and marketers believe that they will be
able to grab the attention of their target consumers better if they send the
promotional and marketing messages directly to them through their mobile
devices. Thus, using Mobile Commerce business organizations can send
bulk text messages to carryout any form of promotional campalgn or
promote a new product. For example, a retail outlet sends SMS to the
customer informin8 them about the upcoming sale. Even if some changes
are brought in, they are informed to the customer in order to encourage
sales.

5. Mobile browsing, purchase and after sale Services: Shopping can now be
done on the mobile device by
downloading the app (application) provided
by the merchant. It has become easier for the customer as if something
catches his eye, he can immediately purchase it while browsing. Customers
find it easier to use an an app instead of browsing the website on desktop or
phone. Mobile Commerce is also proving beneficial for Companies as they
can make online mobile friendly catalog of products so that the mobile users
can access the catalog from their mobile devices. Customers are able to shop,
place and track orders or hire services and pay for dues through mobile
phones.
6. Mobile Ticketing and reservations: Mobile Commerce has found its
application in the field of ticketing too. Passengers can now get
electronically ticketed. Customers can purchase any type of tickets online
such as railway, airline and movie tickets. Tickets, vouchers and coupons
are sent to users on their mobile phones. It also enables users of mobile
phone to make changes in their tickets. Since they are in digital form, all that
is required would be to present these tickets, vouchers or cards, in order to
get the service or benefits that they require. Using mobile devices, customer
can also reserve for hotels and restaurants according to their needs.
7. Healthcare and Medicine: M-Commerce and Wireless service is also widely
used in the areas of Healthcare and Medicine. It is used for lab ordering,
billing, prescriptions, referrals and clinical decisions. For example now a
customer can view his lab report on his mobile by clicking a link sent to him

by the lab technician and he can also print it afterwards.

 CHAPTER AT A GLANCE
1. Mobile commerce, also referred as be defined as any
m-commerce, can
online commercial transaction activity conducted with the use of wireless
handheld devices, such as mobile
phones and laptops.
2. E-Commerce and m-commerce, though both have made the customer's lives
easier but they have different meanings. E-Commerce is an umbrella term
for selling and buying products online, while Mobile Commerce, or M-
Commerce, is a subset of E-Commerce that focus on
purchasing and selling
products via mobile devices.
3. Benefits of Mobile Commerce
(a) Benefits to business
i) Attracts new customers
(i) Offers global reach
tii) Improves communications and relationships between the
parties
involved
(iv) Improves efficiency
(v) Convenience of electronic payment services on mobile
(vi) Push notifications provides personal touch
(b) Benefits to users
) Convenience
(ii) Provides instant contact
(ii) Easy Connectivity
(iv) Time Efficient
(v) Mobile devices promote timeliness
(vi) Flexible Accessibility
Tee11es in Mobile Commerce: Mobile commerce is not perfect, just as b
 Commerce is not without its challenges and problems. It is then up to
adopters of M-Commerce to deal with these issues accordingly.
(a) Security and Privacy Issues
(b) Location management issues
(c) Limitations of mobile devices
(d) Mobile Website
Design Issues
(e) Wireless Infrastructure and
signal issues
(f) Legal and Regulatory
challenges
5. Mobile Commerce Framework: The multi-layered architecture of Mobile
Commerce comprises of various blocks.
They are:
(a) Wireless Network Infrastructure: Wireless networks have gradualy
developed from the basic voice only radio based analog transmission to
the digital voice and data transmission capability. The evolution of the
wireless networks is as follows:
i) Advanced Mobile Phone System (1G)
(ii) Global system of Mobile Communication (2G)
(iii) Global Packet Radio Service (2.5G)

(iv) 3GNetworks

(v) 4G Networks
Distribution Protocols: The two
(b) Information Dissemination and
for information distribution and access
competing standards developed
for handheld devices are:

(i) WAP:

(il) i-Mode
The three
fundamental issues that need to be
Security and Encryption: environment are thee
businesS
a trustworthy
addressed to create

following
G) Authentication
6.22
Mobile CommercE
(ii) Integrity
(ii) Confidentiality
d) Mobile Payment Methods
) Acquirer Centric Models
i) Issuer Centric Models
(ii) Mobile operator Centric Models
(e) Infrastructure, Legal framework and
Network/Protocol Standards
Mobile Commerce applications ,'

4) Mobile Entertainment
(ii) Mobile financial services
(iii) Location and Search service
(iv) Mobile Marketing:
(v) Mobile browsing, purchase and after sale Services
(vi) Mobile Ticketing and reservations
(vii) Healthcare and Medicine

QUESTIONS
1. Define Mobile Commerce. What
benefits it offer to users and businesses.
2. Discuss the various differences
between E-Commerce andMCommerce.
3. What are the various issues in
Mobile Commerce?
4. What are the various
Explain.
as
advantages that are enjoyed by organizations as well
customers who opt for Mobile Commerce?
5.
Explain the tywo
standards developed for information distribution
access for mobile and
devices.
6. Explain the various
Wireless Network Infrastructures that exist for Mobile
Commerce.
Mobile Conmerce 6.23
7. What are the various applications of Mobile Commerce? Explain

8. Explain in detail Mobile Commerce framework.

9.What are the fundamental issues involving security and encryPtIO

Mobile Commerce?
10. Explain the infrastructure and legal framework of Mobile Commerce.

11. What are the various payment methods used in mobile commerce? LisculsS
12. How the issues of Security and encryption addressed in wireless networkS