The Mobile payment market in 2011

By Paul Budde

E-commerce and M-commerce enter new phase of development

It is no surprise that there is enormous interest in the unfolding developments occurring in the e-commerce and m-commerce sector. It is entering a new phase of development as the traditional online commerce sector merges with the newer web and mobile tools of social media, cloud computing, location based services etc. In addition, the infrastructure required to facilitate online and mobile commerce are becoming a reality as high-speed broadband and mobile technologies become more and more integrated into society.

Fifteen years ago we saw the launch of innovative online shopping services like eBay and Amazon and these, and other models, are now evolving and combining new elements of the online experience. In addition, the original e-retailers are facing competition as services based on a Person-to-Person (P2P) model become increasingly popular. P2P refers to a service which allows users to communicate directly with each other to exchange information, products, services, or alternatively make direct payments to each other (ie. PayPal). Crowd-sourcing is an extension of the P2P model and facilitates group communication in niche areas.

The P2P payment model offered by services such as PayPal is thriving thanks to demand from both consumers and vendors, and thanks to the methods of payments that are already based on tools developed for the web. The P2P model is also being used in social media as social networks and e-commerce begin to converge. Facebook in particular is entering the e-commerce space and it has a number of initiatives underway including its Payvment service, which allows sellers to create and operate a retail storefront on Facebook. Developments in this area are being referred to as 'social shopping'.

Advertising remains a key source of revenue for those operating in both the e-commerce and online content sectors. In recent times there has been much discussion around targeted advertising utilising social media; online gaming; online video; online search and mobile advertising platforms. Traditional e-commerce vendors like Amazon now compete directly with other Internet players like Google and Facebook for the advertising dollar. However, given that spending on advertising using digital media channels makes up less than 15% of overall worldwide advertising spending; it has become clear that advertising cannot be relied upon as the only source of revenue.

Successful online business models are being quickly adapted or incorporated into mobile devices in order to maximise revenue opportunities. It is now impossible to discuss e-commerce developments without m-commerce, as these two sectors have become so closely linked. Unique services like FourSquare, which combine mobile location based services, social networking and e-commerce, are a growth area for the future.

FourSquare has already evolved from what was initially a clever way to inform others in real-time of a user’s movements, to a more sophisticated form of rewards program whereby loyal customers are offered discounts and special deals. However FourSquare must act quickly to retain its foothold in this new market as Internet media heavyweights like Facebook develop and launch services of their own.

Read more...

For more information also see World Digital Economy - E-Commerce and M-Commerce Trends and
Mobile NFC Services.

Top of Page