Submitted by::

Farha siddique.
Asif saifi.
P.G.D.M.
 CONTENTS::
 INTRODUCTION.
 History of m-commerce.
 GROWTH OF MOBILE COMMERCE
IN INDIA.
 EMERGING SERVICES OF MOBILE
COMMERCE IN INDIA.
 CHALLENGES FACED BY MOBILE
COMMERCE IN INDIA.
 Mobile devices.
 PRODUCTS & SERVICES
AVAILABLE OF M-COMMERCE.
 M-payments.
 AREAS/ USES OF M-COMMERCE.
 Security challenges.
 NETWORK PROVIDERS AND
TECHNOLOGIES.

INTRODUCTION::
M-commerce (mobile commerce) is the buying and selling of goods and
services through wireless handheld devices such as cellular phones and
personal digital assistants (PDAs). Known as next-generation e-
commerce, m-commerce enables users to access the Internet without
needing to find a place to plug in. The emerging technology behind m-
commerce, which is based on the Wireless Application Protocol (WAP),
has made far greater strides in Europe, where mobile devices equipped
 with Web-ready micro-browsers are much more common than in the
United States.
M-commerce is a type of e-commerce that enables the users to access
the internet through handheld wireless devices. M-commerce is about the
explosion of applications & services that are becoming accessible from
internet enabled mobile devices. It involved new technologies service &
business models.
Mobile commerce is usually called as ‘m-Commerce' in which user can do
any sort of transaction including buying and selling of the goods, asking
any services, transferring the ownership or rights, transacting and
transferring the money by accessing wireless internet service on the
mobile handset itself. 
The next generation of commerce would most probably be mobile
commerce or m-commerce. Presuming its wide potential reach all major
mobile handset manufacturing companies are making WAP enabled smart
phones and providing the maximum wireless internet and web facilities
covering personal, official and commerce requirement to pave the way of
m-commerce that would later be very fruitful for them.
In order to exploit the m-commerce market potential, handset
manufacturers such as Nokia, Ericsson, Motorola, and Qualcomm are
working with carriers such as AT&T Wireless and Sprint to develop WAP-
enabled smart phones, the industry's answer to the Swiss Army Knife, and
ways to reach them. Using Bluetooth technology, smart phones offer fax,
e-mail, and phone capabilities all in one, paving the way for m-commerce
to be accepted by an increasingly mobile workforce.

Some of the definations of m-commerce are:-

“M-commerce refers to any transactions with monetary value that is

conducted via a mobile telecommunications network.”
By- Durlacher.

“M-commerce is the use of mobile devices to communicate, inform

transact and entertain using text and data via a connection to public and
private networks.”
 By- Lehman brothers.

“The use of wireless technologies to provide convenience personalized and

location-based services to your customers, employees and partners”.
By- mobilocity.

HISTORY OF M-COMMERCE::

Mobile commerce was born in 1997 when the first two mobile-phone

enabled coca cola vending machines were installed in the Helsinki area in
Finland. The machines accepted payment via SMS text messages. The first
mobile phone-based banking service was launched in 1997 by Merita Bank of
Finland, also using SMS.
In 1998, the first sales of digital content as downloads to mobile phones were
made possible when the first commercial downloadable ringtones were launched
in Finland by Radiolinja.
Two major national commercial platforms for mobile commerce were launched in
1999: Smart Money in the Philippins, and NTT DOCOMO’s i-MODE Internet
service in Japan. i-Mode offered a revolutionary revenue-sharing plan where NTT
DoCoMo kept 9 percent of the fee users paid for content, and returned 91
percent to the content owner.
Mobile-commerce-related services spread rapidly in early 2000. Norway
launched mobile parking payments. Austria offered train ticketing via mobile
device. Japan offered mobile purchases of airline tickets.
The first conference dedicated to mobile commerce was held in London in
July 2001.
The first book to cover mobile commerce was Tomi Ahonen's M-profits in 2002.
The first university short course to discuss mobile commerce was held at
the University of Oxford in 2003, with Tomi Ahonen and Steve Jones lecturing.
As of 2008, UCL Computer Science and Peter J. Bentley demonstrated the
potential for medical applications on mobile devices
PDAs and cellular phones have become so popular that many businesses are
beginning to use mobile commerce as a more efficient way to communicate with
their customers.
In order to exploit the potential mobile commerce market, mobile phone
manufacturers such as Nokia, Ericsson, Motorola, and Qualcomm are working
with carriers such as AT&T Wireless and Sprint to develop WAP -enabled
smartphones. Smartphones offer fax, e-mail, and phone capabilities.
"Profitability for device vendors and carriers hinges on high-end mobile devices
and the accompanying killer applications," said Burchett. Perennial early
adopters, such as the youth market, which are the least price sensitive, as well
as more open to premium mobile content and applications, must also be a key
target for device vendors.
Since the launch of the iPhone, mobile commerce has moved away from SMS
systems and into actual applications. SMS has significant security vulnerabilities
and congestion problems, even though it is widely available and accessible. In
addition, improvements in the capabilities of modern mobile devices make it
prudent to place more of the resource burden on the mobile device.
More recently, brick and mortar business owners, and big-box retailers in
particular, have made an effort to take advantage of mobile commerce by
utilizing a number of mobile capabilities such as location based services, barcode
scanning, and push notifications  to improve the customer experience of
shopping in physical stores. By 1998 reating what is referred to as a 'bricks &
clicks' environment, physical retailers can allow customers to access the
common benefits of shopping online (such as product reviews, information, and
coupons) while still shopping in the physical store. This is seen as a bridge
between the gap created by e-commerce and in-store shopping, and is being
utilized by physical retailers as a way to compete with the lower prices typically
seen through online retailers.
It initially begins with the use of wireless POS (Point Of Sale) swipe terminals
and has since then made its way into cellular phones and PDA's (Personal Digital
Assistants). The first enabling m-commerce technologies were presented through
Wireless Application Protocol (WAP) and i-mode mobile Internet service. WAP
builds on digital phone technology and first emerged on 2.5 G phone technology
that allowed users to browse the Internet. This technology cemented the way of
m-commerce, which has strongly developed on 3G-phone technology. Nokia has
first introduced m-commerce application software Nokia toolkit version 4.0.
The future of m-Commerce seems extremely bright because several experiments
are going on to introduce the upgraded version of mobile likely to emerged with
the evolution of 4G mobile technology
 Growth of Mobile Commerce in India:->

Mobile Commerce services are evolving rapidly in India due to the coming
together of mobile service providers, banks and payment service providers
to offer more products and secure transactions through mobile networks.
While e-Commerce is limited to PC users only, Mobile Commerce is open
to almost everyone with a cellphones and mobile connection. Mobile
Commerce is expected to grow because the mobile usage and ownership
penetration is more than 4 to 5 times than a PC and growing at a very fast
rate.
 With mobile commerce offerings expanding, customers in India have the
hand-held convenience of using their mobile phones for making payments
for taxi fares and recharging prepaid phone cards.
IBM and other companies are experimenting with speech recognition
software as a way to ensure security for m-commerce transactions

Emerging Services of Mobile Commerce in India:->

 Increased mobile penetration and use of GPRS on handsets has resulted

in the digital downloads market to cross Rs.2.55 Billion by end of March
2008.
 Monetary transfers or transactions through mobile phones are found to be
much cheaper than traditional bank transfers as the transaction costs are
much lower in the former.
 Innovative solutions for daily use such as payment of auto or taxi fares
 Inter-bank transfers services are also on the anvil. ICICI Bank Ltd, India’s
largest private bank, has already started offering all its services through
mobile phones (called mobile banking) since January 2008. Standard
Chartered bank has launched a service that enables money transfer from
any ATM to any mobile phone across the country. The recipient receives a
pin number on his or her mobile phone and the sender has to convey the
order number to the recipient. Using these two the recipient can withdraw
money from the bank’s ATM’s.
 Feasibility studies are being conducted to offer mobile commerce to
microfinance firms to enable them collect payments from remote areas.

Challenges faced by Mobile Commerce in India:->

 Security of transactions through Mobile Commerce: The biggest
challenge to Mobile Commerce is the security of payment through
mobiles. Mobile Commerce Services like the mobile wallet which helps
make payments at retail outlets through text messages have been
 hindered by the guidelines issued by the Reserve Bank of India due to
security concerns.
 Mobile Payment Service Providers like Obopay Inc and mChek India
Payment Systems Pvt. Ltd are planning on services that would work within
the RBI prescribed guidelines like bank account-linked services and
mobile debit cards.
 The other challenges faced by Mobile Commerce are – the speed of
GPRS and user interfaces.

MOBILE DEVICES:->

Hundreds of different mobile devices are available to the end consumers and the
range of devices available changes frequently. In 2006, Nokia alone released 39
new mobile phone models. It would be a very complicated task to effectively list
all of all the mobile devices that could be used for the mobile commerce
purposes.
More and more devices available on the market today bring new and exciting
functions that can be used by different business applications. Two examples are
location-based functionality (based on Global Positioning System (GPS) or other
technologies) and payment functionality. Both extend the reach of mobile devices
and increase their integration with relevant business applications and processes.
The following list gives an overview of different kinds of mobile devices:

 Mobile phone.
 PDA (personal digital assistant).
 Smart phones – the smart phone combines mobile phones & PDA
technology into one device.
 Laptop.
 Earpiece – as part of a Personal Area Network.

Each mobile device has certain characterstics that influence its usability, such as
 Size and color of display.
 Input device, availaibility of keyboard & mouse.
 Memory and CPU processing power.
 Network connectivity, bandwidth capacity.
 Supported operating system (egs, PalmOS, Microsoft Pocket PC).
 Availability of internal smart card reader (egs, SIM card in mobile phones).

Depending on these factors, the services that the end user can receive differ
considerably. Moreover, depending on the network technology used for
transmission, the bandwidth capacity varies and influences the kind of services
that the end user is able to receive.
In mobile phones there exits three solutions to internal smart cards: single SIM,
dual chip, and dual slot. Single SIM is the solution that is most widely available
today, where all confidential user information is stored on one smart card, dual
chip means that there are two smart card in the mobile phone, one for user
authentication to the network operator and one for value-added services like m-
payment or digital signature. A dual slot mobile phone has a SIM card and a card
slot for a full-sized external smart card. With this solution different cards can be
used one after the other. Moreover, the cards can also be used the traditional
POS and ATM terminals.

To enable mobile commerce to happen widely, what defines a mobile device?

 Ubiquitous (present in the mass market and available to the consumers on

the day-to-day basis)
 Reasonably-priced
 Provides internet connectivity
  Able to display rich content such as images
 Portable
 Customisable
 Able to save data
 Autonomous
 Has a good quality camera with autofocus
 Screen can display barcodes
 Ability to read RFID tags

In addition mobile devices should be able to read barcodes and RFID tags to be
able to interact with physical objects. As mobile phones begin to be to emulate
credit cards security is an important issue. Measures such as PIN (Personal
Identification Number) codes and biometrics are necessary to make sure the
device can only be used by its owner.

PRODUCTS & SERVICES AVAILABLE FOR M-COMMERCE:->

 Mobile ticketing
 Tickets can be sent to mobile phones using a variety of technologies.
Users are then able to use their tickets immediately, by presenting their
phones at the venue.
Tickets can be booked and cancelled on the mobile device with the help of
simple application downloads, or by accessing the WAP portals of various
travel agents or direct service providers.

 Mobile vouchers, coupons and loyalty cards

Mobile ticketing technology can also be used for the distribution of
vouchers, coupons, and loyalty cards. These items are represented by a
virtual token that is sent to the mobile phone. A customer presenting a
mobile phone are at the point of sale with one of these tokens at
the receives the same benefits as if they had the traditional token. Stores
may send coupons to customers using  location-based service to
determine when the customer is nearby. It is very simple commerce
method.

 Content purchase and delivery

Currently, mobile content purchase and delivery mainly consists of the
sale of ring-tones, wallpapers, and games for mobile phones. The
convergence of mobile phones, portable audio players, and video players
into a single device is increasing the purchase and delivery of full-length
music tracks and video. The download speeds available with 4G networks
make it possible to buy a movie on a mobile device in a couple of
seconds.

 Location-based services
The location of the mobile phone user is an important piece of information
used during mobile commerce transactions. Knowing the location of the
user allows for location-based services such as-
@ Local discount offers
@ Local weather
@ Tracking and monitoring of people

 Information services
A wide variety of information services can be delivered to mobile phone
users in much the same way as it is delivered to PCs. These services
include:
@ News.

@ stock quotes. 
@ Sports scores
@ Financial records 
@ traffic reporting.
 Customized traffic information, based on a user's actual travel patterns,
can be sent to a mobile device. This customized data is more useful than
a generic traffic-report broadcast, but was impractical before the invention
of modern mobile devices due to the bandwith requirements.

 Mobile banking
Banks and other financial institutions use mobile commerce to allow their
customers to access account information and make transactions, such as
purchasing stocks, remitting money. This service is often referred to
as mobile banking, or M-Banking.

 Mobile StoreFront
The reinvention of the mobile phone as a touch sensitive handheld
computer has for the first time made mobile commerce practically feasible.
'According to ABI Research, mobile is going to get a lot bigger in the
ecommerce market. The research firm is predicting that in 2015, $119bn
worth of goods and services will be purchased via a mobile phone.'

 Mobile brokerage
Stock market services offered via mobile devices have also become more
popular and are known as Mobile Brokerage. They allow the subscriber to
react to market developments in a timely fashion and irrespective of their
physical location.

 Auctions
Over the past three years mobile reverse auctions solutions have grown in
popularity. Unlike traditional auctions, the reverse auction (or low-bid
auction) bills the consumer's phone each time they place a bid. Many
mobile SMS commerce solutions rely on a one-time purchase or one-time
subscription; however, reverse auctions offer a high return for the mobile
vendor as they require the consumer to make multiple transactions over a
long period of time.

 Mobile Browsing
Using a mobile browser—a World Wide Web browser on a mobile device
—customers can shop online without having to be at their personal
computer.

 Mobile Purchase
Catalog merchants can accept orders from customers electronically, via
the customer's mobile device. In some cases, the merchant may even
deliver the catalog electronically, rather than mailing a paper catalog to the
customer. Some merchants provide mobile websites that are customized
for the smaller screen and limited user interface of a mobile device.

M-PAYMENT:->
M-payment gives the introduction to the payment mechanisms for m-commerce.
Consumers can use many forms of payment in mobile commerce, including:
 Premium-rate telephone numbers’, which apply charges to the consumer's
long-distance bill- Charges added to the consumer's mobile telephone bill,
including deductions to pre-paid calling plans
 Credit cards- Some providers allow credit cards to be linked to a
phone's SIM cards
 Micropayment services
 stored-value cards, often used with mobile-device application stores or
music stores.

Catalog merchants can accept orders from customers electronically,

through the customer's mobile device. In some cases, the merchant may
even deliver the catalog electronically, rather than mailing a paper catalog
to the customer. Some merchants provide mobile websites that are
customized for the smaller screen and limited user interface of a mobile
device. M-payment system have different requirements & characterstics
than e-payment systems. Following are the categorization:

 software electronic coins.

 hardware electronic coins.
 background account.

1) Software electronic coins:-

In this case, monetary value is store on the mobile device & the customer
has the 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 a
signature of the issuing bank. Since software electronic coins are easy to
copy, the validity of an electronic coins depends on its uniqueness in
terms of its serial number. The customer transfer electronic coins to the
merchant, who forward them to the issuing bank for the “Double Spending
Test”. In this test, it is checked whether the electronic coins has been
spend beforehand. If yes, it is rejected. Otherwise its serial number is
entered into the double spending database and the money is transferred
to the merchants’ account. Due to the limitation of the mobile devices,
electronic coins may have to be generated and stored externally, until they
are downloaded onto the mobile devices.

2) Hardware electronic coins:-

 In this case, monetary value is stored on the secure hardware token,
typically a smart card, in the mobile devices. 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 the money, the customers’ smart card and the
merchants’ 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.

3) 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.
Common to all scenarios is that, on receipt of an invoice, the customer
sends an authentication and authorization message to the merchant that
allow the trusted third party (that holds the account) to identify the
customer & to verify the payment authorization. The accounts can then be
settled. There are numerous payment systems that fall into this category.
The differences are regarding the nature of the trusted third party and the
procedure to send authentication and authorization data.

Areas/ Uses of m-commerce:->

 In the current commerce industry, mobile commerce or M-
Commerce has been entered in finance, services, retails, tele-
communication and information technology services. In these
sectors, M-Commerce is not only being widely accepted but also
it is being more used as a popular way of business/ commerce.

 Finance Sectors
Mobile Commerce works vastly in finance sector including all big
and major financial institutes, banks, stock market and share
brokers. Whenever any user needs money or wants any sort of
banking and finance related services, he/she can access the
services or register services via voice calling or via Short
Message Services (SMS) services. WAP based mobile handsets
allow the user to access the official website of the institute.
User can transact money or transfer money, or pay the bill from
its bank account using mobile commerce facilities. Banks also
provide round the clock customer care services, which can be
used any time through voice calling. Some customer care
services are also provides non-voice services on mobile that is
known as insta-alert facility.
While in the stock market, the user can access the stock market
quotes and get in live touch with current trading status on its
mobile in two forms either voice (customer assistance) or non-
voice (sms alerts) or both.
The share broker sends market trends and tips of trading on
their clients' mobile. Also broker can suggest the appropriate
stock for intra-day trading to their users.

 Telecommunication Sectors
Mobile has played a giant role in communication technology
through its versatility and superiority. The ubiquity and easy
usage has further made it extremely popular across the globe. It
has already surpassed the fixed phone in the world. Software
platform is essential for operating any mobile and this tool has
revolutionized the communication world because of its
functioning as a small computer.

The booming popularity has forced the corporate world to

develop a new commerce platform that can reach to masses.
Mobile commerce has attracted massive traffic because of its
 unique characteristics. The user can change the service of any
financial institute or banks if gets better product and service or
user is unsatisfied with the service of the subscribing company.
Besides this several bills can be paid using mobile and user can
also check the available balance, the status of cheques, the
status of requested processing and customer care support.

 Service / Retail sectors

Service and Retail sectors are also among the leading sectors,
which have nurtured most from mobile commerce. M-Commerce
has proved a major boon for these sectors. Several business
dealings no matter how big or small are being finalized on the
mobile phone. Customer would be able to book the order, can
hire carrier/courier services and above all could also pay the
dues related to it through mobile.

 Information Sector
After the bursting of dotcom bubble, e-commerce has gone
downwards to hell. But the evolution of mobile commerce has
again worked as ambrosia for them. A separate sector has been
evolved to exercise on this field for the IT experts. The
webmasters have skilfully exploited this new area of IT-enabled
commerce.
In the IT field, mobile commerce has been used massively to
deliver financial news, stock updates, sports figures and traffic
updates and many more onto a single handheld device ‘mobile'.

SECURITIES CHALLENGES:->

M-commerce is not possible without a secure environment, especially

transactions of monetary value. Depending upon the different point of
views of different participants in an m-commerce, there are different
security challenges. These security challenges related to:

1. The mobile device- confidential user data on the mobile device as

well as the device itself should be protected from unauthorized use.
The security mechanisms employed include user authentication
(eg, PIN or password authentication), secure storage of confidential
data (eg, SIM card in mobile phones) & security of the operating
system.
2. The radio interface- access to a telecommunication network
requires the protection of transmitted data in terms of
confidentiality, integrity and authenticity, in particular, the users’
personal data should be protected from eavesdropping. Different
security mechanisms for different mobile network technologies (i.e.,
in 3G, 2G and other systems) will be present.
3. The network operator infrastructure- security mechanisms for the
end user often terminate in the access network. This raises the
question regarding the security of the users’ data within and beyond
the access network. Moreover the user requires certain services for
which he/she has to pay. This often involves the network operator
and he/she will want to be assured about correct charging and
billing.
4. The kind of m-commerce application- m-commerce application,
especially those involving payment, need to be secured to assure
customers, merchants and network operators. For example, in s
payment scenario both sides will want to authenticate each other
before committing to a payment. Also, the customer will want
assurance about the delivery of goods and services.

Network providers and technologies:->

 There are several standards that govern communication between mobile
device and the supporting network.The following is a non-exhaustive
listing of the most influential standards and technologies:

 GSM
Global System for Mobile communications is the most popular standard
for mobile phones in the world. Its promoter, the GSM Association,
estimates that 82% of the global mobile market uses the standard. Over 2
billion people use GSM phones across more than 200 countries and
territories. Its ubiquity makes international roaming very common between
mobile phone operators, enabling subscribers to use their phones in many
parts of the world. GSM differs from its predecessors in that both
signalling and speech channels are digital quality, and so is considered a
second generation (2G) mobile phone system. Data communication has
been built on top of the 2G system thanks to the work of the 3rd
Generation Partnership Project (3GPP). The key advantages of GSM
systems to consumers have been better voice quality and low-cost
alternatives to making calls, such as the Short Message Service (SMS,
also called “text messaging”). The advantage for network operators has
been the ease of deploying equipment from any vendor that implements
the standard.
GPRS (General Packet Data Service) is a mobile data service available to
GSM users. It is important because it allows end users without access to
3G networks to have access to a mobile internet and related data
services.” If there are space issues here, you can add at end of final
paragraph (without creating new paragraph) and you could reduce the
space after the bulleted list further up the page.

 3G
3G is the third generation of mobile phone standards and technology, after
2G. It is based on the International Telecommunication Union (ITU) family
of standards under the International Mobile Telecommunications IMT-
2000 programme. 3G technologies enable network operators to offer
users a wider range of advanced services while achieving greater network
capacity through improved spectral efficiency. Services include wide-area
wireless voice telephony and broadband wireless data transmission.
Typically, they provide a 5-10 Mb per second service.

o EDGE
Enhanced Data rates for GSM Evolution (EDGE) or Enhanced GPRS
(EGPRS), is a digital mobile phone technology that allows increased data

transmission rates and improved data transmission reliability. Although

technically a 3G-network technology, it is generally classified as the
 unofficial standard 2.75G, due to its slower network speed. EDGE has
been introduced into GSM networks around the world since 2003, initially
in North America. EDGE can be used for any packet switched application,
such as an internet connection. High-speed data applications such as
video services and other multimedia benefit from increased data capacity
of EGPRS.

o UMTS
Universal Mobile Telecommunications System (UMTS) is one of the third-
generation (3G) mobile phone technologies. Currently, the most common
form uses W-CDMA as the underlying air interface, is standardized by the
3GPP, and is the European answer to the ITU IMT-2000 requirements for
3G cellular radio systems.

o HSPA
High-Speed Packet Access (HSPA) is a collection of mobile telephony
protocols that extend and improve the performance of existing UMTS
protocols. Two standards (HSDPA and HSUPA) have been established
and a further standard HSOPA is being proposed.

 Wireless Networks (Bluetooth / Wi-Fi)

More and more mobile phones support several technologies at once, not
only in the respect to the communication between the handset and the
carrier network but also wireless networking such as Bluetooth (short-
range) or Wi-Fi (medium-range). Several pilots have been established in
the retail area where consumer’s handset can receivepromotional info or
download music files via Bluetooth connection (in-store promotions, etc
…). In France, Loréal and Carrefour have collaborated on one such
Bluetooth pilot.
 SMS
SMS (Short Message Service) is the most commonly used protocol for
text messaging between mobile phones. Already a multi-billion dollar
industry, SMS is available on a wide range of networks and performs very
well. It would be relatively easy to establish SMS as an additional data
carrier for GS1 Identification Keys. All that would be needed would be
guidelines on how to structure GS1-compliant SMS messages.
 MMS
MMS (Multimedia Message Service) is a standard for sending messages
with multimedia content (such as images, audio and video). Markeing
messages sent via MMS are general more effective (leading for example
to higher brand recall) than SMS text messages. However, not all phones
and networks support MMS consistency, leading to patching adoption.