M-commerce (mobile commerce) is the buying and selling of goods and services through wireless handheld devices such as cellular telephone and personal digital assistants (PDAs). Known as next-generation e-commerce, m-commerce enables users to access the Internet without needing to find a place to plug in. The emerging technology behind m-commerce, which is based on the Wireless Application Protocol (WAP), has made far greater strides in Europe, where mobile devices equipped with Web-ready micro-browsers are much more common than in the United States.

As content delivery over wireless devices becomes faster, more secure, and scalable, there is wide speculation that m-commerce will surpass wireless e-commerce as the method of choice for digital commerce transactions. The industries affected by M-Commerce include:

  • Financial services, which includes mobile banking (when customers use their handheld devices to access their accounts and pay their bills) as well as brokerage services, in which stock quotes can be displayed and trading conducted from the same handheld device.
  • Telecommunications, in which service changes, bill payment and account reviews can all be conducted from the same handheld device.
  • Service/retail, as consumers are given the ability to place and pay for orders on-the-fly.
  • Information services, which include the delivery of financial news, sports figures and traffic updates to a single mobile device.

IBM and other companies are experimenting with speech recognition software as a way to ensure security for m-commerce transactions.

In comparison to e-commerce, m-commerce offers both advantages and disadvantages. The following list summarizes the advantages of m-commerce:

  • Ubiquity: The use of wireless device enables the user to receive information and conduct transactions anywhere, at anytime.
  • Accessibility: Mobile device enables the user to be contacted at virtually anytime and The user also has the choice to limit their accessibility to particular persons or times.
  • Convenience: The portability of the wireless device and its functions from storing data to access to information or persons.
  • Localization: The emergence of location-specific based applications will enable the user to receive relevant information on which to act.
  • Instant Connectivity (2.5G): Instant connectivity or "always on" is becoming more prevalent will the emergence of 2.5 G networks, GPRS or EDGE. Users of 2.5 G services will benefit from easier and faster access to the internet.
  • Personalization: The combination of localization and personalization will create a new channel/business opportunity for reaching and attracting Personalization will take the form of customized information, meeting the users' preferences, followed by payment mechanisms that allow for personal information to be stored, eliminating the need to enter credit card information for each transaction.
  • Time Sensitivity: Access to real-time information such as a stock quote that can be acted upon immediately or a sale at a local boutique.
  • Security: depending on the specific end user device, the device offers a certain level of inherent security.

The following list summarizes the disadvantages of M-Commerce:

  1. Mobile devices offer limited capabilities (such as limited display). Between mobile devices these capabilities vary so much that end user services will need to be customized accordingly.
  2. The heterogeneity of devices, operating systems and network technologies is a challenge for a uniform end user platform. For this reason, standardization bodies consisting of telecommunication companies, device manufacturers and value added service providers integrate their work.
  3. Mobile devices are more prone to theft and destruction.
  4. The communication over the air interface between mobile device and network introduces additional security threats.


Differences between E-Commerce and M-Commerce

Both of these terms have different meanings though both aim at making consumer lives easier. To understand more the differences between E-commerce and M-commerce, please have a look at the following table

Criteria E-commerce M-commerce
Definition Electronic Commerce (or also called E-commerce) refers to the activities of buying and selling products and services with the use of electronic systems such as the internet. Mobile Commerce (or also called M- commerce) refers to the process of buying and selling products and services with the use of internet/cellular data.
History 1970's 1990’s
Devices used Computers, laptops… Wireless handheld devices such as cell phones, iPads, tablets…
The use of Internet Mandatory Not mandatory(allow the use of offline      mode,      might       not work properly though)
Connectivity Smaller Larger owing to the bigger number of mobile users
Mobility Limited Less limited because of lighter weight and smaller size leading to easier to carry
Reach Only at the places where the electricity and the internet are available Broader due to its portability
Payment gateway Credit Cards Caller’s rate, mobile banking or user’s credit card
Usage Less simple because of more complicated user interface and more functions Simple because all functions have been simplified
Platform used Web stores Web stores (mobile version/web app), hybrid app, native app
Cost Less costly for the creation a web store and the use of internet More costly for the creation of a mobile app and the use of cellular data