Mobile Commerce

When mobile banking was introduced, I never understood the appeal, since I could already access my bank either over the phone, in person, online, and from ATMs. Give all of these options I never understood the need to introduce another almost redundant platform with which to access banking information. However, after a little research, I discovered this view is very shortsighted.

Banking mobile commerce is not a redundant communication platform, but instead offers an alternative communication vector that enables the bank to reach out to customers who have more limited options. This view is best understood by examining some examples from emerging economies. For example, Pakistan has a very low level of physically established banking infrastructure. At the same time, a very high number of individuals who own cell phones. A natural pairing would be to enable these cell phone users to conduct banking activities on their phones allowing them to overcome the paucity of physical banking locations. I would suspect that the same number of people have limited access to computers, further enhancing the power of mobile banking. (See reference here)

Another interesting example of how mobile commerce can benefit emerging economies is a money transfer service called M-PESA supplied by a phone company in Kenya. Interestingly, a bank account is not needed to perform the transactions. The site even claims that Kenya is the only country in the world that gives its mobile phone users the ability to transfer money using their phone. (Reference here.) I am curious to know if a large percentage of the Kenyan population has cell phones, but at the same time has limited access to physical money transfer locations.

Emerging markets are not the only place where mobile commerce has a viable application. An interesting statistic that I found was that in Japan, more people access the web using smartphones as compared to using a computer. This trend clearly indicates that any type of mobile commerce development probably has the potential to be very profitable in Japan's economy as written about here. However, a dissenting option is expressed in this article, "Seven Myths about Japanese mCommerce". Clearly, it data can be manipulated to fit opinions of the reporters.

I am excited to see how mobile commerce develops over the next few years.