Ever since I have been blogging on the topic on mobile payments over the past few weeks, the themes around “mobile commerce”,”mobile payments” and “mobile wallets” continue to be a topic of discussion with my professional associates and in my personal networks. Simply because there is so much (social) media buzz and so many solutions vying for your time and attention. Based on all my interactions, if there is one inference that I can safely draw it is this – Majority of us understand mobile commerce / payments / wallets broadly, but drill deeper and your interpretation might be somewhat different from mine. So in this post I am making an attempt to articulate my views on this exciting and evolving space.
In simple words, Mobile Commerce means buying / selling of goods and services through your mobile phone. Very simply put, it means using your mobile phone as a part of the process of buying / selling – could be initiating the transaction or paying for it. It does not matter where and when you actually consumer the actual product / service. If you initiate a commerce transaction on your mobile phone, it is mobile commerce. You might actually pay for it offline (through cash or a cheque) but the actual commerce transaction was through the mobile phone. You can also pay for it on your mobile phone (through your mobile web browser or a mobile wallet)
So what are mobile payments? Mobile Payments refer to making a payment using a mobile device. Again there are very many parts to a payment transaction. The first and most important step is to initiate a payment transaction from your mobile. Next is to authorize the transaction (in real-time) to facilitate the actual transfer of funds from your account. Now your account can either be your normal online banking account opened via a mobile web browser or a mobile wallet which is pre-loaded with cash from any source of funds (Cash-In) and has the required balance.
Now the part where it all gets interesting and why it is tough to clearly draw boundaries is because you can have all kinds of permutations and combinations of mobile commerce, mobile payments and mobile wallets..
Let me illustrate with a few examples
Example 1 : You can initiate a commerce transaction on your mobile (mCommerce), but pay for it with cash in the offline mode. For e.g.: the cash of delivery feature which is popular in India.
Example 2: You can initiate a commerce transaction in-store, and pay for it with a mobile wallet.
Example 3: You can initiate a commerce transaction of your mobile, and pay for it with a mobile wallet. For e.g: shopping in a mobile marketplace
Example 4 : You can initiate a commerce transaction in-store, and pay for it with cash / card.
Example 5: You can initiate a commerce transaction on your mobile, and pay using your online banking credentials via login through your mobile web browser
As you can see, the boundaries between mobile commerce, mobile payments and mobile wallets begin ato blur for many of us. What is interesting to see is that from a consumer adoption stand-point, there are phases of adoption in this journey.
Stage 1 -> Offline (In-store) commerce – Using cash, and / or progressing to card
Stage 2 -> eCommerce – Using with cash on delivery and / or progressing to online payments (using card / net banking)
Stage 3-> mCommerce – Using cash on delivery, and / or online payments on mobile (mobile web) and eventually ending with mobile wallets (In-app mobile payments)
So what do you think will be at Stage 4? Anywhere commerce with your mobile wallets using in-app mobile payments? Leave a comment to let me know..