During a recent panel session I took part in, at a mobile conference in New York, the topic of micro-transactions came up. There is no arguing that mobile subscribers with internet access are growing. Operators and manufactures have done a great job in creating an environment that makes it seamless for end users to access the mobile web.
When taking a look at the traditional e-commerce model, history shows us that it was a basic micro-transaction model that built trust and end user acceptance. Such transactions were basically nominal with top selling products consisting of books, CD’s, used /discounted merchandise, etc. (Thank you Amazon and eBay!) All in all, initial transactions made during this time frame were about $20 and below. Today, e-commerce is an everyday practice. End users not only buy nominal products but large ticket items such as a 52” flat screen TV.
We are currently seeing this model repeat itself in the m-commerce world. Although the growth is not as rapid as it was within the dot com era, we are seeing a micro-transaction model through the sale of MP3 files, applications, and games build consumer acceptance in processing a transaction directly from a mobile device. On a personal level, I am a Long Island resident who relies on public transportation to get to and from work. M-commerce has made it convenient for me to access products that simplify my commute. Subscriptions to mobile radio, MP3 music files, publisher applications, games, crossword puzzles, etc. are top sellers within our industry. M-commerce has made it possible for me to consume content that I have traditionally acquired through $.50 newspapers and $15 CD’s in a way that is more practical. Now, am I ready to spend a few thousand dollars on a 52” flat screen TV? Probably not, but the concept of making a major transaction from a mobile device is not out of my realm. In fact, I do know that the European retailer Marks and Spencer has already recorded a $5000 purchase for a pair of couches. To be direct, although we have some work to do, yes – I feel that m-commerce will surpass e-commerce.
During the panel session there were also a couple of questions that I think are worth sharing with readers.
What should an alternative mobile payment provider account for when deploying a mobile service?
In my view, they should try and understand as much as then can about the end user prior to presenting them with an opportunity to pay for a product. We all understand the importance of security but providing numerous fields to end users in an effort to ID them and process a transaction can be discouraging. In the long run a discouraged end user will only hurt conversion rates. The importance of optimizing the end user experience within the m-commerce world can not be stressed enough.
Within m-commerce how do providers address chargebacks on credit card transactions?
M-commerce is no different from any ‘card not present’ transaction. It is dealt with in the same way a chargeback would be handled if someone made a transaction on their laptop or if an order was taken over the phone. Like other platforms, m-commerce providers or merchants of records will have detailed information on the transaction and its history. Disputing such chargeback’s will be at their discretion.
So what all of the above shows is that m-commerce not only is surpassing e-commerce but is now part of our daily lives to the extent that it will soon become second nature.