Using a mobile device for commerce has slowly begun to take hold in the digital landscape of shopping. These devices are primarily cell phones with sophisticated software to manage and run applications. Big and small companies are now competing for your dollars as well as your mobile minutes. Mobile commerce is defined as "using a mobile device, like a mobile phone or Portable Digital Assistant (PDA), to conduct a wireless transaction in the exchange of goods and services between consumers, merchants and financial institutions" (Mallat & Tuunainen, 2008).
The growing popularity of mobile payments is fueled by the success of early adopters in the 1990s who used their mobile devices to purchase ring tones and games. Wireless phone providers were the conduit that allowed customers to download these services for a fee. Mobile commerce is solely driven by four mobile payment system models. The first and most commonly used is a Short Message Service (SMS) based transactional payment. The second, Direct Mobile Billing is used by wireless carriers for goods and services offered directly on the phone like ring tones, videos and music. The third, Wireless Application Protocol (WAP), requires a mobile web browser to support interactive data services for activities such as music downloads. The fourth, Near Field Communication (NFC) is often referred to as "contactless", enables a consumer to make payments without physically swiping a card or entering any financial data into a terminal.
The difference between the 1990's and now is cellular carriers vs. third party companies that need more info from you to process transactions. In the 90's just buying ringtones was simple, it showed up on your phone bill the following month. Today, big names like Apple, Starbucks, MasterCard and eBay are testing ways to bring shopping and payment for on line goods anywhere you have a wifi or cellular connection. They all are promoting the slogan, "Accept Payments Everywhere", but will everyone with a mobile device buy into this idea? An electronic form of payment replacing cash has been talked about for years. A cashless society could become a reality if these companies are able to effectively make transactions secure, fast and not limited to wifi. I have to admit, I did enjoy using my wife's iPhone to look at my Amazon Wish List and having the option to move items to my cart for purchase.
Mobile Commerce technology has definitely arrived, but how companies will take advantage of it yet to be determined. As with most new and emerging technology, the consumers will drive how fast and how long mobile commerce will stay in the market place. Check out the links below to see what the industry is doing now.