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Using M-Pesa, the cell-phone
money-transfer service, is common in
Kenya. Funds are transferred by SMS
into an electronic wallet on the phone to
be used at stores and agents nationwide.See also: Reinventing and adapting 52–57 ■ Understanding the market 234–41 ■ Lean production 290–93 ■
Applying and testing ideas 310–11 ■ The right technology 314–15
SUCCESSFUL SELLING
The customer holds the device
against a paypoint enabled with
a technology called near field
communication (NFC); this
establishes a radio connection
between the two devices to
complete a transaction.
Growth of m-commerce
The value of online sales made on
mobile devices is predicted to grow
exponentially. North American
research specialist Forrester
forecasts US m-commerce sales
to show compound annual growth
of 48 percent in the five years from
2012 to 2017, with the value of
m-commerce over the same period
increasing by 250 percent on
smartphones and more than
425 percent on tablets.
In the UK, which leads Europe
in the growth of m-commerce,
Barclays PLC expects m-commerce
to grow by 55 percent over the
same five-year period, while
traditional online sales will grow
by only 8 percent and in-store
sales by 1.6 percent.Emerging markets
The sudden and explosive growth
of m-commerce can be attributed
to several factors. Consumer
adoption of smartphones and
tablets is increasing; more and
more people access the Internet
with mobile devices rather than
with desktop computers; and
customers have become more used
to shopping on the move, enjoying
the convenience and immediacy
it provides. People are also placing
more trust in the service.Given that the biggest increase
in smartphone sales has been in
emerging markets such as China,
India, and Africa, it is not surprising
that these regions are considered
growth hubs for m-commerce. In
China, expanding ranks of middle-
class youths are fueling a rapid
expansion of mobile transactions,
while in Africa, e-commerce has
been virtually bypassed in favor
of m-commerce. In some African
countries, in the absence of a
conventional banking infrastructure,
cell phones have created an
informal banking system.
In 2007, the leading mobile
network provider in Kenya,
Safaricom, set up a mobile banking
service called M-Pesa. Money
loaded onto the phone can be used
to make purchases or transfer
funds. Currently, M-Pesa operates
in Kenya, Tanzania, Afghanistan,
South Africa, and India, with plans
by Safaricom stakeholder Vodafone
to roll out the service internationally.
As this example indicates, the long-
term implication of m-commerce
could be a global cashless society. ■Mobile banking
The banking sector has helped
to power m-commerce from the
start, when Merita Bank of
Finland launched the first
cell-phone-based banking
service using SMS in 1997.
Since then, the key challenges
for developers have been
security (providing a safe
environment for transactions);
technology (developing cross-
platform banking apps that will
work on any cell phone); and
innovation (finding new and
improved ways to link digitalbanking with retail suppliers
and provide a personalized
service for consumers).
La Caixa bank in Spain has
introduced contactless ATMs,
allowing customers to withdraw
cash with a tap of their cell
phone. They can also buy tickets
to events, select seats, and show
a QR code to access venues. In
Australia, Commonwealth Bank
customers can make tap-and-go
payments at retailers. Mobile
banking is evolving so users can
make payments irrespective of
which bank they use or which
retailers they go to.Consumers no longer
go shopping, they always
are shopping.
Chuck Martin
US CEO of Mobile Future Institute