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The School of Mobile Vol. 2 - The Detail Chapter 3 - Mobile Technology and Solu�ons

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What actually is a mobile payment?
Now that we have contextualised the concept of mCommerce, we can now focus more closely on
the actual transac�on process and the making of an mPayment.
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A mobile payment is any payment for a product or service transacted through a mobile device that
u�lises a par�cular mobile technology such as SMS, MMS, the mobile web or NFC. To relate this to
travel, the role of an mPayment is to facilitate the undertaking of mCommerce in the broader sense
and to enable travel companies to extend their eCommerce experience to mobile.
How far away are mPayments from really becoming a widespread reality?
In Japan and Korea, mPayments are fairly well-established, although s�ll for fairly small purchases.
The par�cular technology making a big splash in Asia in the mPayments space, are the phones
released by NTTdocomo which incorporates a Near Field Communica�ons (NFC) chip, whereby
your phone acts as a secure digital wallet that is swiped over specific readers in order to make
transac�ons.
It is quite clear that the progress in mPayments (in terms of using your mobile as a transac�on
vehicle) is most evident in the FMCG sector, although s�ll in a tenta�ve and early stage of adop�on,
from examples such as tex�ng vending machines to buy so� drinks to using mCommerce solu�ons
to buy books and DVDs and so on from Amazon. Most of these ini�a�ves are s�ll for products of a
rela�vely low value. This is expected to change over �me but to what degree is uncertain.
The key challenge for the travel industry is in how to move the customer from buying travel products
online to buying travel products via their mobile devices. This is certainly a challenge given that
people have only rela�vely recently become comfortable with making payments online and even
now not all consumers are prepared to do so. In addi�on, the complexi�es associated with some
travel products may well throw up unique complica�ons. The real poten�al for mTransac�ons is in
enabling the travel and tourism industry to capitalise on concepts around pushing last minute deals
and special offers to their mobile users and enable a complete transac�on then and there.
A true industry standard in mCommerce a la Visa/MasterCard is a likely solu�on over the next
5-7 years given the importance of standardisa�on and scale, par�cularly when building trust and
bringing customers on board. However the existence of a transforma�onal mCommerce hub is
not a total obstacle to the travel industry being able to offer transac�onal capability to customers.
There are work arounds to explore.
Why would your customers even want to make payments through mobile?
Why did demand grow to make payments via the web? The ability to pay for travel products
via mobile devices allows on the go purchases, at the last minute, perhaps on impulse, when
they are away from their computer, at their convenience, etc. If strategies are devised to
engage with consumers at different stages of the buying cycle, why not strive to close the
deal there and then if they are prepared to do so.
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