The main payment methods used to enable mobile commerce are:
•premium-rate calling numbers,
•charging to the mobile telephone user's bill or
•Deducting from their calling credit.
•Registration of a credit card that is linked to a Sim Card.
CATEGORISATION OF M-PAYMENT SYSTEMS
Most e-payment systems are not suitable for use in a mobile context that is, using a mobile device and communicating over a mobile telecommunication network. This is due to the special characteristics of mobile devices and mobile telecommunications. In the following, we categories m-payment systems according to the whereabouts of the customer’s money:
1.Software electronic coins – electronic money stored on the mobile in file format.
2.Hardware electronic coins – electronic money stored on the mobile device on a smart card.
3.Background account – electronic money stored in a remote account at a trusted third party.
Software Electronic Coins
In this case, monetary value is stored on the mobile device and the customer has full control of his/her money wherever he/she goes and whatever he/she does. An electronic coin is represented as a file containing, among other information, a value, a serial number, a validity period and the signature of the issuing bank. Since software electronic coins are easy to copy, the validity of an electronic coin depends on its uniqueness in terms of its serial number. The customer transfers electronic coins to the merchant, who forwards them to the issuing bank for the “double spending test.”
Hardware Electronic Coins
In this case, monetary value is stored on a secure hardware token, typically a smart card, in the mobile device. The presentation of electronic money is not important, as long as it is stored securely on the smart card. Electronic money could be represented as a simple numeric counter. In order to get to the money, the customer’s smart card and the merchant’s payment server authenticate each other and a secure channel is set up between them. Then, electronic money can be transferred from one to the other. This approach is quite attractive because smart cards provide an additional level of mobility. That means the payment smart card can also be used in POS transactions. E.g., Geldkarte, Mondex and Barclay card.
Background Account
Here, the money is stored remotely on an account at a trusted third party. Depending on the specific payment system, the account could be a credit card account, a bank account, or an account held at the network operator. For example, in some cases this data is sent in the clear (e.g. a credit card authorization) not providing any security against eavesdropping and in some cases this information is encrypted and digitally signed, providing anonymity to the customer (e.g. SET – Secure Electronic Transactions).
KEY ISSUES OF M-COMMERCE
The success of M-Commerce depends on:
•Evolution: Technology and Business models are constantly evolving which will demand flexibility and patience on part of all players.
•Customer loyalty: Who will ‘own’ the customer? Partnerships among players from various industries will be necessary for most, if not all, m-commerce initiatives, and, in turn, will alter the nature of any one company to own their own customers.
•Cross-sector knowledge gulf, where the different parties will need to learn about the functions and limitations of the services provided by the other players, for example, operators will need to know about content and applications.
•Moving up the value chain: To respond to market opportunities some companies have develop subsidiaries in order to react more rapidly to market challenges. For example, Sonera has developed Sonera Zed, to provide portal and application management services such as location based mobile yellow pages as well Smart Trust, to develop secure solution for m-commerce transactions. And Citicorp has established e-Citi to develop a wireless access gateway strategy for financial service providers.
CONCLUSION
As m-commerce applications and wireless devices are evolving rapidly, one will take forward the other one towards empowering innovation, versatility and power in them. There are a number of business opportunities and grand challenges of bringing forth viable and robust wireless technologies ahead for fully realizing the enormous strength of m-commerce in this Internet era and thereby meeting both the basic requirements and advanced expectations of mobile users and providers.
There are news articles and pictures displaying people, who are ordering things over the Internet while waiting for a bus, downloading merchant coupons on their PDAs as they enter a store or bidding for the last table at a hot restaurant by digital phone in a spur-of-the-moment auction. Actually this process represents a tip of a very big iceberg. The advent of m-commerce, as widely referred to among the users, has far-reaching implications. But there are many limitations in the technologies that Once its relevant technologies get matured, widely available and competent, the host of portable devices will be ready to handle the bigger transactional activities not envisioned so far successfully apart from these minor activities. One of the main feature challenges will be to unify payment solutions, providing the highest possible level of security.
