The mobile commerce (m-commerce) landscape is littered with casualties that result from proprietary solutions. In the past banks and telecommunication service providers have been able to implement services that have admittedly been technical successes - but have met with a less than successful outcome, because of the problematic chain of events that is triggered when proprietary solutions are deployed in this industry.
Proprietary solutions often have limited acceptance. This in turn leads to a low rate of adoption, and therefore poor economies of scale and limited profits. The consequences of this chain of events are realised in the form of high costs, which impact negatively on profits and competitive pricing for the mobile commerce end-user.
In counterpoint to the proprietary solutions model, is one which we particularly favour - that of open systems and interoperability.
Interoperability is a technical term that describes the ability of a device to work with other devices manufactured for the same purpose, through the adherence to an agreed standard.
Interoperable, open systems are generally met with wider industry acceptance because, by definition, they are able to interface with other systems and are therefore accessible. It follows that the adoption rate is high and there are, accordingly, good economies of scale. This means that the costs are lower, and this can be passed on to the end-user in the form of lower prices; and a far more 'democratic`, easily accessible technology solution.
Often mobile banking and m-commerce are confused. However, there are subtle but crucial differences. Mobile banking can be aligned to Internet banking - as it is simply an alternative channel for doing your banking. M-commerce, on the other hand, is akin to e-commerce, in that it is a way to purchase and pay for goods and services. The difference between m-banking and m-commerce can be defined as accessing one`s personal financial information, as opposed to conducting transactions.
To illustrate the difference in simple terms: m-banking would be the equivalent to logging on to a bank`s Web site to check a balance or statement, whereas m-commerce works on the same principle as buying goods over the Internet.
Currently, there are over 2 billion Visa and Master Cards in circulation globally; while at the same time, there are 1.3 billion mobile phones worldwide. With an appropriate and sustainable open systems solution driving it, m-commerce has the capacity to tap into the massive potential of the mobile phone.
One of the most exciting m-commerce markets is right on our doorstep. According to the EMC World Cellular Database, Africa will have gone from a mobile phone subscriber base of 36.9 million in 2002, to a projected 121.2 million by the end of 2006.
This means that there are an enormous number of potential m-commerce users who are already equipped with the necessary technology - and who are merely waiting for a viable solution.
While a range of pilots has been launched, most of them have been discontinued. Yet, in spite of the high failure rate, proprietary mobile banking solutions that present themselves as m-commerce, continue to proliferate.
The path to m-commerce success is already open - provided one can capitalise on the open standards that are inherent in facilities such as GSM, Visa and MasterCard. The success in m-commerce, hitherto elusive, may then be achieved - the result of which will be a solution that is market-wide, non-proprietary, bank-endorsed and based on widely-used and accessible credit and debit cards.
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