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M-Commerce: Seizing the Immediate Opportunity to Build for the Future (Strategic Focus) Product Image

M-Commerce: Seizing the Immediate Opportunity to Build for the Future (Strategic Focus)

  • ID: 1226290
  • April 2010
  • 34 pages
  • Datamonitor

Two overarching factors are influencing banks' renewed interest in m-commerce. Firstly, m-commerce is an intrinsic component of mobile banking, a channel which institutions have been making increased financial investments in for the last 2 years. Secondly, m-commerce has a vital role to play in the adoption of the next-generation of mobile payment instruments based on contactless technology.

Scope

- This report examines the future prospects of m-commerce, and is written predominately for audiences from the financial services sector.

- The report is specifically concerned with the payment aspect of m-commerce.

Highlights of this title

Players in the payments ecosystem are making renewed efforts in m-commerce, which is the most easily addressable segment of mobile payments. However, m-commerce is currently overshadowed by other mobile payment mechanisms, such as contactless (NFC).

Ecosystem players have been aiming at the wrong payments technology target, and m-commerce can act as the vital foundation layer to next-generation mobile payment initiatives. Importantly, technology is not a major inhibitor to the growth of m-commerce.

Retail banks must not procrastinate, and the time for action is now. To capitalize on opportunities, technology vendors must emphasize their underlying role in m-commerce activities.

Key reasons to purchase this title

- The report explains why players in the m-commerce ecosystem must cooperate in order to prevent a sense of déjà vu from occurring.

- Understand why previous attempts to develop successful m-commerce propositions failed, and gain insight into what is required today and in the future.

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Summary
Catalyst
Ovum view
Key messages
M-commerce will experience a renaissance in 2010 as ecosystem players make renewed efforts
Crucially for banks, m-commerce is the most easily addressable segment of mobile payments
M-commerce needs to step out from the shadow being cast by emerging payment mechanisms
Ecosystem players have been aiming at the wrong next-generation payments technology target
M-commerce acts as the vital foundation layer to next-generation mobile payment initiatives
The growth of m-commerce is not inhibited by technological concerns, and banks can avoid large-scale re-engineering
Retail banks must not procrastinate: the time for action is now
Technology vendors must emphasize their underlying role in m-commerce activities
Tesco could leverage its assets to create a devastating m-commerce triple-play
table of contents
Market Context: The Renaissance of M-Commerce in 2010
M-commerce may experience a renaissance in 2010 as players renew their efforts
Banks' interest in m-commerce is growing as mobile banking initiatives take root
Phases 1 and 2: create awareness and stimulate interaction
Phases 3 and 4: launch-fee based services and achieve full engagement with consumers
Retailers are anxious to reap the benefits of m-commerce to drive revenues
Understanding the growth potential of m-commerce in the retail sector
Mobile operators continue to play an active role in m-commerce and mobile payments
Learning the painful lesson from SimPay: m-commerce is impossible without a banking partner
Increasing data services helps combat declining average revenue per user but causes a dilemma
Commercial arrangements between operators and financial services providers continue to emerge
M-commerce is the most easily addressable segment of mobile payments
NFC is the largest market opportunity in mobile payments but cannot be tapped in the short term
Online commerce is a huge market and the neatest match for m-commerce
There are opportunities for m-commerce across the e-commerce spectrum
Sweden and Japan are the biggest potential markets for m-commerce based on e-commerce trends
Business Focus: Ecosystem Players are Aiming at the Wrong Target
M-commerce is currently overshadowed by other emerging payment mechanisms
The push to promote contactless cards is underway and will drive NFC adoption in time
Putting NFC into context with traditional credit and debit payment cards
Consumer attitudes to NFC are difficult to assess due to the nascence of contactless payments
Retailers' attitudes to contactless payments are dominated by commercial factors
Fee structure is the biggest obstacle between retailers and the adoption of contactless payments
Industry stalemate over contactless presents m-commerce with an opportunity to come to the fore
M-commerce acts as the foundation layer to other mobile payment initiatives
Short term (present to three years)
Medium term (three to seven years)
Long term (seven or more years)
Business model innovation is required to take advantage of m-commerce
Retailers are the public face of m-commerce
Mobile operators
Device manufacturers
Platform providers
Card issuers and merchant acquirers
Card schemes
Technology Focus: Creating Seamless, yet Secure M-Commerce Services
For banks, technology is not a major inhibitor to the growth of m-commerce in 2010
Technology can create a positive consumer experience when conducting m-commerce activities
Security remains the dominant enabling factor for m-commerce
M-commerce demands additional layers of security to protect the integrity of sensitive data
Mobile operators must be able to meet specific technological and operational needs
The impact of m-commerce technology on consumers demands key consideration
Security is important to consumers, but convenience is the deal-breaker
Retailers must also optimize the customer experience
The compromise that all stakeholders must make is between their desire to offer convenience while retaining control over payment security
Recommendations
Recommendations for banks
Be decisive over the tactical role of m-commerce as part of strategic initiatives in mobile banking
Work with retailers to extend existing services and promote the benefits of m-commerce
Recommendations for technology vendors
Vendors should identify how their solutions can play a beneficial role in the m-commerce framework
Ensure messages surrounding security and fraud prevention technologies resonate strongly
Alternative view
Tesco could leverage its portfolio of assets to change the game where m-commerce is concerned
M-commerce pillar 1: Retail
M-commerce pillar 2: Mobile
M-commerce pillar 3: Banking
A little is actually a lot: Tesco has a unique triple-play proposition in m-commerce
Appendix
Ask the analysts
Definitions
Source references
Further reading
Methodology
Disclaimer
List of Tables
Table 1: The components of informational and transactional mobile banking services
Table 2: Contactless cards in the UK: the numbers in context
List of Figures
Figure 1: Key players in the mobile payments ecosystem
Figure 2: Mobile banking is the second most important channel for increased IT investment during 2010
Figure 3: Banks plan to invest in mobile payments technology in 2010 as a foundation for m-commerce
Figure 4: The scale of e-commerce demonstrates the opportunity for the m-commerce ecosystem to develop
Figure 5: Based on the trends in the online commerce market, Sweden and Japan are among the most attractive markets for m-commerce
Figure 6: An m-commerce framework is created using solutions from different players in the ecosystem
Figure 7: The correlation between convenience and payment tool choice is overwhelmingly positive, 2009
Figure 8: M-commerce necessitates key parties striking a balance between convenience and control
Figure 9: Banks should deploy platforms capable of handling any-to-any payments
Figure 10: Tesco could leverage its assets for an m-commerce triple play

Note: Product cover images may vary from those shown
Note: Product cover images may vary from those shown

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