Mobile Commerce ResearchJune 22, 2013

M-commerce and itsapplicability in

Egypt

Dr. Eman Arafa

Prepared by

Mahmoud SayedHany Hassan Hussein NemrMahmoud Mohamed El Sayed

Research Paper Title: Mobile Commerce and its applicability in Egypt

1. Abstract

2. Introduction

3. Mobile commerce features

4. Mobile commerce opportunities

5. Mobile commerce success factors

6. Mobile commerce adoption barriers and challenges

7. Mobile commerce applications

8. Future trends in mobile commerce

9. Conclusion

10. References

ABSTRACTast−growing ability of wireless devices to handle awealth of data content as well as voice transmissionis opening the door to the creation of new products,

services, markets, and revenue streams. According toresearch projections, mobile commerce will cross $30billion by end of 2016 growing at 40% compound rate atU.S. only. Globally, consumers are likely to spend $119billion by 2015 through their mobile phones, which willaccount for 8% of all ecommerce activity.

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Mobile commerce is gaining increasing acceptance.The need for mobility is a primary driving force behindmobile banking, mobile entertainment and mobilemarketing, and is supported by an ever increasingconvergence of computers and mobile telecommunicationdevices. So this paper is a descriptive study for theoverall picture of mobile commerce and its features,opportunities, success factors and challenges and itsapplicability in Egypt.

INTRODUCTION-commerce is sometimes referred to as “mobile e-commerce because its transactions are basicallyelectronic transactions, conducted using a mobile

terminal and a wireless network. Mobile terminals includeall portable devices such as mobile telephones and PDAs,as well as devices “mounted in the vehicles that arecapable of accessing wireless net works” and perform m-commerce transactions. One definition of m-commercedescribes it as "any transaction with a monetary valuethat is conducted via a mobile telecommunicationsnetwork".

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Some definitions tend to ignore telematics, animportant feature of m-commerce. These definitionsconcentrate on the appliance. For instance, "m-commerceis the buying and selling of goods and services, usingwireless hand-held devices such as mobile telephones orpersonal data assistants (PDAs)".

M-commerce is closely related to e-commerce, sincethe services offered in both variations are handledelectronically by computer-mediated networks andaccessible via telecommunication networks. The onlydifference is that in m-commerce the telecommunicationnetworks are accessed through mobile electronic devices.There exist two different paradigms covering therelation- ship of m-commerce to e-commerce. The firstparadigm classifies m-commerce simply as an extension ofe-commerce; the second paradigm regards m-commerce as anindependent business field and consequently as analternative mechanism to e-commerce. That each of theseapproaches is principally right and yet too one-sided canbe derived from the following facts:

Many of the services offered by m-commerce mayas well be availed of using “immobile”(stationary) Internet, e.g. purchasing ticketsto a football match.

M-commerce opens new business opportunities byenabling innovative, location-based services (LBS)that the “immobile” Internet cannot offer. Forinstance the location of the nearest AutomaticTeller Machine (ATM) in real time can only beprovided by determining the current geographicposition of the user.

A characteristic of mobile commerce is that someparts of a transaction may be processed in a stationarysector. For example, ordering clothes using a mobilephone is an m-commerce transaction, even when thetransaction is processed by stationary computers; theordered goods are sent by snail mail and paid against aninvoice. What is important is that at least theinitiation or the completion is carried out using mobileaccess via an electronic device. Another importantcharacteristic is that the completed transaction need nothave a monetary character if the transaction is carriedout as a marketing measure or as an after-sales service.

The phrase mobile commerce was originally coined in1997 to mean "the delivery of electronic commercecapabilities directly into the consumer’s hand, anywhere,via wireless technology". According to BI Intelligence,

in January 2013, 29% of mobile users have now made apurchase with their phones. Wall mart estimated that 40%of all visits to their internet shopping site in December2012 were from a mobile device. Bank of America predicts$67.1 billion in purchases will be made from mobiledevices by European and U.S. shoppers in 2015.

The Global Mobile Commerce Forum, which came toinclude over 100 organizations, had its fully minutedlaunch in London on 10 November 1997. Kevin Duffey waselected as the Executive Chairman at the first meeting inNovember 1997. The meeting was opened by Dr Mike Short,former chairman of the GSM Association, with the veryfirst forecasts for mobile commerce from Kevin Duffey(Group Telecoms Director of Logica) and Tom Alexander(later CEO of Virgin Mobile and then of Orange). Over 100companies joined the Forum within a year, many formingmobile commerce teams of their own, e.g. MasterCard andMotorola. Of these one hundred companies, the first twowere Logica and Cellnet (which later became O2). Memberorganizations such as Nokia, Apple, Alcatel, and Vodafonebegan a series of trials and collaborations.

M-commerce services were first delivered in 1997,when the first two mobile-phone enabled Coca Cola vendingmachines were installed in the Helsinki area in Finland.The machines accepted payment via SMS text messages. Thefirst mobile phone-based banking service was launched in1997 by Merita Bank of Finland, also using SMS.

The m-Commerce(tm) server developed in late 1997 byKevin Duffey at Logica won the 1998 Financial Times awardfor "most innovative mobile product," in a solutionimplemented with De La Rue, Motorola and Logica. TheFinancial Times commended the solution for "turningmobile commerce into a reality.

Two major national commercial platforms for mobilecommerce were launched in 1999: Smart Money(http://smart.com.ph/money/) in the Philippines, and NTTDoCoMo's I-Mode Internet service in Japan. I-Mode offereda revolutionary revenue-sharing plan where NTT DoCoMokept 9 percent of the fee users paid for content, andreturned 91 percent to the content owner.

The first university short course to discuss mobilecommerce was held at the University of Oxford in 2003,with Tomi Ahonen and Steve Jones lecturing. As of 2008,UCL Computer Science and Peter J. Bentley demonstratedthe potential for medical applications on mobiledevices.PDAs and cellular phones have become so popularthat many businesses are beginning to use mobile commerceas a more efficient way to communicate with theircustomers.

Since the launch of the iPhone, mobile commerce hasmoved away from SMS systems and into actual applications.SMS has significant security vulnerab- ilities andcongestion problems, even though it is widely availableand accessible. In addition, improvements in thecapabilities of modern mobile devices make it prudent toplace more of the resource burden on the mobile device

More recently, brick and mortar business owners, andbig-box retailers in particular, have made an effort totake advantage of mobile commerce by utilizing a numberof mobile capabilities such as location based services,barcode scanning, and push notifications to improve thecustomer experience of shopping in physical stores.

The Google Wallet Mobile App launched in September2011 and the m-Commerce joint venture formed in June 2011between Vodafone, O2, Orange and T-Mobile are recentdevelopments of note. Reflecting the importance of m-Commerce, in April 2012 the Competition Commissioner ofthe European Commission ordered an in-depth investigationof the m-Commerce joint venture between Vodafone, O2,Orange and T-Mobile. A recent survey states that in 2012,41% of smart phone customers have purchased retailproducts with their mobile devices.

MOBILE COMMERCE FEATURESM-commerce is characterized by some unique features

that equip it with certain advantages againstconventional forms of commercial transactions, includinge-commerce:

• Ubiquity. Means that the user can avail services and carry out transactions largely independent of his

current geographic location (the “anywhere” features). This feature can be useful in many situations, e.g. to cross-check prices while standing in a supermarket or while on the move.

• Reachability. Through mobile devices, business entitiesare able to reach customers anywhere anytime.With a mobile terminal, on the other hand, a usercan be in touch with and available for otherpeople anywhere. anytime.Moreover, the user mightalso limit his/her reachability to particularpersons or at particular times.

• Personalization. An enormous number of information,services, and applications are currentlyavailable on the Internet, and the relevance ofinformation users receive is of great importance.Since owners of mobile devices often requiredifferent sets of applications and services,mobile commerce applications can be personalizedto represent information or provide services inways appropriate to a specific user.

• Dissemination. Some wireless infrastructures supportsimultaneous delivery of data to all mobile userswithin a specific geographical region. Thisfunctionality offers an efficient means todisseminate information to a large consumerpopulation.

• Immediacy. Closely related to ubiquity is thepossibility of real-time availment of services(the "anytime feature"). This feature isparticularly attractive for services that aretime critical and demand a fast reaction, e.g.stock market information for a broker.Additionally, the consumer can buy goods andservices as and when he feels the need.

• Localization. Positioning technologies, such as theGlobal Positioning System (GPS), allow companiesto offer goods and services to the user specificto his current location. Location-based servicescan thus be offered to meet consumer needs andwishes for localized content and services.

• Instant connectivity. Ever since the introduction ofthe General Packet Radio Service (GPRS) mobiledevices are constantly “online”, i.e. in touchwith the network (the “always on” feature). Thisfeature brings convenience to the user, as timeconsuming dial-up or boot processes are notnecessary.

• Pro-active functionality. By virtue of its ability tobe immediate, local and personal, m-commerceopens new avenues for push-marketing such ascontent and product offers. Services like "Opt-inadvertising" can be offered, so that a user maychoose those products, services and companiesthat he wants to be kept informed about. TheShort Message Service (SMS) can be used to sendbrief text messages to consumers, informing themof relevant local offerings that best suit theirneeds. This feature ensures that the “right”(relevant) information can be provided to theuser at the “right” place, at the “right” time.The user too does not have to fear missing somepotentially crucial information or getting it toolate.

MOBILE COMMERCE OPPORTUNITIESM-commerce allows us to create opportunities to

deliver new services to existing customers and to attractnew ones. It also allows directs access to informationwhile on the move.

E-commerce is characterized by e-market places,online auction systems that act as the intermediarybetween buyers and sellers. On the other hand, m-commerceis more personalized and ideal for access to locationbased services. Many new business models have beenestablished around the use of mobile devices.

Mobile devices have the characteristics ofportability, low cost, more personalization, GPS (globalpositioning system), voice and so forth. The new businessmodels include micropayment and mobile payment, contentdistribution services, entertainment, community

communication and business services as depicted in thefigure:

Because of their existing customer base, technicalexpertise and familiarity with billing, mobile telephoneoperators are the natural candidates for the provision ofmobile and micro payment services. Micropayment involvessmall purchases such as vending and other items In otherwords; the mobile phone is used as an ATM card or debitcard. Consumers can pay for purchases at conveniencestores or buy train tickets using their mobile phones.

Content distribution services are concerned withreal time information, notification (e.g., bankoverdraft), using positioning systems for intelligentdistribution of personalized information by location(e.g., selective advertising of locally availableservices and entertainment). Real-time information suchas news, traffic reports, stock prices and weatherforecasts can be distributed to mobile phones via theInternet. The information is personalized to the user’sinterests. By using a positioning system, users canretrieve local information such as restaurants, trafficreports and shopping information. Content distributionservices with a greater degree of personalization andlocalization can be effectively provided through a mobileportal. Localization means to supply information relevantto the current location of the user. Users’ profile suchas past behavior, situation and location should be takeninto account for personalization and localized serviceprovision. Notification can be sent to mobile devicestoo.

Mobile network operators (MNOs) have a number ofadvantages over the other portal players. First, they

have an existing customer relationship and can identifythe location of the subscriber. Second, they have abilling relationship with the customers while thetraditional portal does not. MNOs can act as a trustedthird party and play a dominant role in m-commerceapplications.

In addition, mobile phone has become a new personalentertainment medium. A wide range of entertainmentservices are available, which consist of online gameplaying, ring tones download, watching football videoclips, live TV broadcasting, music download and so onAccording to Screen Digest estimates, Korea and Japanaccounted for 80% of worldwide games download revenues ofEuro 380 million (Screen Digest, 2005Unsurprisingly,adult mobile services and mobile gambling services areamong the fast growing services. According to Juniperresearch, the total revenue from adult mobile servicesand mobile gambling services could be worth US$1billionand US$15 billion respectively by 2008(Law regulatorshave to stay ahead of the fast growing development.Community tools also generate a lot of revenue. Itconsists of SMS (Short Message Service) and chat. SMSbroadcasting is an ideal communication tool in community.And chat allows a mobile user to keep contact with theothers while he or she is on the move.

M-commerce also has a great impact on businessapplications; especially for companies with remote staffextending the existing enterprise resource planning (ERP)systems with mobile functionality will provide remotestaff, such as sales personnel, with real-time corporateand management data. Time and location constraints arereduced and the capability of mobile employees isenhanced. Also it makes paperless office a reality sothat off site engineers or salesmen don’t need to carrywith loads of paper such as delivery note to theirclients. The logistic related business also benefits fromthe use of mobile inventory management applications Inthis case; multiple trucks carry a large amount ofinventory while on the move. Whenever a store needscertain items/goods, a nearby truck can be located andjust-in-time delivery of goods can be performed. M-

commerce offers tremendous potential for businesses torespond quickly in supply chains.

MOBILE COMMERCE SUCCESS FACTORS

Here we present four key success factors we believethey are the most important for making mobile commercehappen and evolve across the globe.1. Innovative Business Models

Companies that want to take advantage of theopportunities presented by this new technologywill have to understand how this technologyfits with existing business models or provokesnew ones:

Retailers and manufacturers have to consider thatthey have the opportunity to become providers of servicesas well as providers of products. Providing servicesrequires different resources, different internalorganization and different thinking to providingproducts, but there are many benefits to be gained fromembracing a service-based approach that will strengthencore business.

Mobile Network Operators need to consider how mobilecommerce can be integrated with existing tools forrevenue generation such as SMS, Premium SMS and MMS aswell as the huge potential to drive data traffic (whichin most markets is still priced highly and discouragesincreases usage). Additionally, the fact that mobileoperators have an existing billing structure is of greatadvantage, particularly as far as payments for lowamounts are concerned.

Mobile Phone Manufacturers need to consider how toprovide mobile devices that suit the needs of the marketbut also drive the market in new directions, with openarchitecture and tools allowing new applications todevelop based on their devices and platforms .SolutionProviders need to understand how to collaborate withdifferent players, bearing in mind that in many mobilecommerce applications they will only be one part of asolution.

2. Consumer adoption

Mobile phones are already starting to become abasic device available to everyone: anytime,anywhere. This means that the question is notso much "Will every consumer adopt his mobilephone as a universal interface to connect toany digital service?" As "When will consumersdo this, under what circumstances, how muchwill they use it and how quickly will thisadoption take place"

For mass adoption of this technology to take placequickly, consumers must:- Be able to access services as easily as possible("just a few clicks and no more").

- Be convinced that the services are useful and make adifference to their lives.

- Be confident about the costs of these services (forfree, part of the monthly fee they already pay as asubscriber or a transparent one-off fee (such as SM).

- Be confident about the source and reliability of theinformation delivered (for example bank brand-owner,retailer, and government organization).

- Be confident about respect of privacy and personalinformation.

- Be confident that security measures protecting theirdevices (such as biometrics and pass codes areeffective.

For consumers to adopt any of these new services ontheir mobile phones confidently, they will need to beable to use these services whatever kind of mobile phonethey buy, whatever kind of subscription contract theyhave signed and whatever mobile network operator theyhave chosen.

For service providers, this means that choices need to bemade to support interoperability and openness, ratherthan to develop and use private or proprietary model.Business models need to be developed to make sure this ispossible.

Once there is a global, interoperable platformavailable, service providers (bank, brand owners,retailers and many other stakeholders) will be able tofocus their resources on creating and launching new

services or on transferring existing services to mobiledevices, all based on a system that is trusted byconsumers.

3. Technology availabilityWithout certain technologies, mobile commerceis impossible. The full potential of the mobilephone as an ubiquitous object is only releasedwhen local interaction technologies areembedded, such as the combination of camera andimage recognition software (to read whether barcodes or recognize specific images) and ways ofexchanging and communicating wirelessinformation with products, point-of-sale andother devices. The integration of a secureelement, such as a tamperproof chip card,inside the mobile phone will provide securityand trust for handling valuable data (such aspersonal and payment information).

4. Interoperable SystemsInteroperable systems are essential to massadoption of mobile commerce though proprietarysystems may function well in limitedsituations; they are a barrier to any large-scale implementation.

- Can we imagine a world in which identification keysto access to mobile commerce applications are notunique and may cause conflicts when end consumersscan a bar code with their mobile phones?

- Can we imagine a world in which data carriers aredifferent depending on the applications and need todownload multiple bar code readers for the users?Significant additional costs are generated ifapplications providers are forced to adapt their barcode readers to each operating system in the mobilemarket.

- Can we imagine a world in which the communicationlayer is specific to a mobile device, a mobileoperator or a local area?

This means that whenever a consumer changes ageographic zone certain services will no longer beavailable. The access to the mobile service must beas simple as possible and the protocols used must betransparent for the users.

M-COMMERCE ADOPTION BARRIERS AND CHALLENGESThe prospect and advantages of mobile commerce may appearobvious to many of us, but the path to success usingmobile commerce is not necessarily so plain Technicalrestrictions of mobile devices and wirelesscommunication, business concerns, and legal constraintscomplicate the practical use of mobile commerce. In thissection, we focus on the obstacles confronted by mobilecommerce applications.APPLICATION CHALLENGESAbsence of Killer Application(s)

A killer application for a computing platform is "anapplication compelling enough to motivate purchasesof that platform". For the mobile commerce tosucceed, one or more killer applications must bedeveloped to compel organizations to purchase anduse mobile devices in their operations.

Mobile Devices LimitationsCurrent wireless devices include phones, hand-heldor palm-sized computers, laptops, and vehicle-mounted interfaces. Whereas mobile terminalsdemonstrate a greater extent of mobility andflexibility, they are inferior in several respectswhen compared to personal computers. The screen issmall and the display resolution is low. The smalland multifunction keypad complicates user input.Because of the need to be physically small andlight, these input and output mechanisms impede thedevelopment of user-friendly interfaces andgraphical applications for mobile devices. Mobile

handsets are also limited in computational power,memory and disk capacity, battery life, andsurfability. These drawbacks in mobile devices donot support complex applications and transactions,and consequently limit usage of mobile commerce.

User DistrustIn each transaction, each party involved needs to beable to in every transaction, each party involvedneeds to be able to authenticate its counterparts,to make sure that received messages are not tamperedwith, to keep the communication contentconfidential, and to believe that the receivedmessages come from the correct senders. Due to theinherent vulnerability of the mobile environment,users in mobile commerce are more concerned aboutsecurity issues involved with mobile transactions.Mobile commerce users need to be assured that theirfinancial information is secure and that wirelesstransactions are safe. The mass adoption of mobilecommerce will not be realized until users begin totrust mobile commerce.

Strategy changes To stay competitive and realize genuine productivityto stay competitive and realize genuine productivitybenefits from mobile commerce, many organizationsactually need to be redesigned. They will have tomake fundamental changes in organizational behaviordevelop new business models, and eliminate theinefficiencies of the old organizational structures.The process of rethinking and reengineering is ademanding task. For example, implementing mobilegovernment is more than developing a website on themobile Internet. Actually, it is about rethinkingand reengineering the way government does itsbusiness. It requires rethinking how government tobe organized from the perspective of its citizensand reengineering how government to perform itsfunctions according to the needs of its citizensrather than to the requirements of bureaucracies.

Investment risk

A major problem faced by mobile commerce is the hugeinvestment required to implement and operate it.Engineering massive organizational and systemchanges to reposition the organization strategicallyis complicated as well as expensive. For example, acompany has to build a mobile infrastructure inorder to better manage its supply chain. But themobile technology itself does not guarantee the truebenefits of mobile commerce. Expertise in fieldsother than technology is also prerequisites forsuccessful applications of mobile commerce in supplychain management. How can organizations obtain apayoff from their investment in wireless technology?Understanding the costs and benefits of mobilecommerce is difficult

NETWORK OBSTACLESIncompatible Networks

Multiple, complex and competing protocols exist intoday’s cellular network standards. As previouslymentioned, GSM is a single standard used by thenetwork operators in Europe and Pacific Asianregion. But TDMA (Time-division multiple access) andCDMA (Code-division multiple access) are widely usedin the US. These different standards have resultedin the global incompatibility of cellular handsets.The network incompatibility poses problems fororganizations to communicate and cooperate withtheir suppliers, distributor's retailers, andcustomers.

Bandwidth access The Federal Communications Commission (FCC) hasestablished several frequency bands for use bycellular network operators across the country. Inorder to encourage competition, the FCC prohibitscellular operators from owning more than 45 MHz ofradio spectrum in a given geographic region. Knownas the “spectrum cap,” this regulation imposesbarrier for US cellular network operators who areattempting to implement the new high-bandwidth,next-generation networks.

Security Concerns Compared with the wired counterpart, wirelesscommunications are more vulnerable. Although mostwireless data networks today provide reasonablelevels of encryption and security, the technologydoes not ensure transmission security in the networkinfrastructure. Data can be lost due to mobileterminal malfunctions. Worse, these terminals can bestolen and ongoing transactions can be altered. Inshort, the mobility enjoyed by mobile commerce alsoraises many more challenging security tasks. Seriousconsideration must be given to the issue of securityas mobile commerce applications play an increasinglysignificant role in our daily business and personallife.

INFRASTRUCTURE PROBLEMSCompeting Web languages

Today’s mobile devices utilize a broad range ofoften incompatible standards, making the process ofcreating a successful m-commerce application evenmore difficult. Newer mobile phones willincorporate WAP and its WML. NTT DoCoMo’s iMode, onthe other hand, uses condensed HTML. The fact thatincompatible standards are utilized in mobiledevices today makes the process of creatingsuccessful m-commerce applications even moredifficult.

Seamless integration The integration between network operators andbusinesses is a key issue for mobile commerce. Inaddition, to conduct business via mobile devices,companies must be capable of managing and supportinga large base of mobile customers or employees. Thisposes a challenge to the traditional helpdesk andcustomer care function. On one hand, companies mustdeal with the logistics procurement, and assetmanagement issues surrounding large numbers ofdevices and software. On the other hand, the broadrange of mobile devices makes customer care far morecomplex and harder to manage.

Legal concernsApart from its technical and business obstacles, theimplementation of mobile commerce has its legalconcerns, too. The application of traditional law tothe mobile Internet is not always a straightforwardprocess. Legal issues plaguing mobile commerce aresimilar to those facing e-commerce. Some of them arehow to maintain privacy, how to deal withdefamation, how to protect intellectual property andhow to treat Internet taxation. Like the wiredInternet, the wireless Internet also posessignificant challenges to our legal structure.

Researchers say that more work has to be done tomitigate these risks and barriers and they divided thework according to the risks types as follows:

A- Application-Level Issues- Seek Killer Applications

For the mobile commerce to succeed, one or morekiller applications must be developed to compelindividuals to purchase and use mobile devices intheir daily commercial activities. The killerapplication(s) for mobile commerce should make fulluse of mobility, provide services directly relevantto mobile needs and benefit users in immediacy andefficiency.

- Enhance Usability of Mobile DevicesAs previously discussed, the usability of mobiledevices is poor due to the various limitations ofmobile terminals. Future mobile devices are expectedto be smaller and more wearable, but they will alsopossess larger processing and storage resources.Screens for cellular phones also will be madelarger, making them easier to use and more visuallyappealing. Meanwhile, offline methods without directconnection of mobile devices to the network can alsohelp to minimize the technical limitations. Futuremobile devices will also be able to integrateBluetooth technology, allowing them to access nearbyappliances such as vending machines and televisionsusing very low-cost, short-range moderate bandwidth

connection. With such capabilities mobile deviceswill have a combination of different communicationconnections to conduct mobile commerce.

- Design User-Friendly InterfaceUnlike the wired computing environment where largescreens are available, mobile commerce applicationshave to operate on small and often wearable mobiledevices that can only include small screens.Scientists are now developing voice-based and pen-based interaction to replace the present keyboardand mouse interaction. Pen-based interaction ontouch screens may replace the mouse; voice-basedinteraction may be used for activation and controlof functions like voice dialing. Some studies on theuser interface for mobile devices have been reportedin the Workshop series on Human Computer Interactionwith Mobile Devices.

- Build Business Models for Mobile CommerceAlthough mobile commerce has the potential toimprove the performance of organization, businessmodels unique to mobile environment need to bebuilt. Business models introduced within the e-commerce environment require further refinement tosuit the mobile environment. It is vital to ensurethat all the related applications and services canbe accessed with ease and minimal cost.

B- User Infrastructure Issues- Consolidate Network Infrastructure

Bandwidth and coverage are major issues for thenetwork infrastructure. The former allows more datato be exchanged between servers and the mobiledevices, thus supporting multimedia contentdelivery. The latter minimizes the complications ofconnection losses when a mobile device moves beyonda network boundary or crosses from one network toanother. These two issues directly affect.

- Address Security IssuesResearch on how to improve security in mobilecommerce must be carried out due to the

vulnerability of mobile devices and wirelessnetworks. To meet security requirements includingauthentication, integrity confidentiality, messageauthentication, and non repudiation in mobilecommerce, additional security software andinformation (e.g., certificate, private, and publickeys) will have to be installed on mobile devicesNevertheless, due to the limited computing resourceof mobile devices, at some point it will benecessary to establish additional servers to storeinformation, perform security checking, and conductelectronic payment on behalf of mobile devices.

C- Middleware Issues- Improve Mobile Access to Databases

To allow users to run applications on their mobiledevices without having to maintain constantconnection with the servers and pay expensiveconnection time, at least part of the databasesystems must be able to reside on the mobiledevices. These mobile database systems requirelittle memory and are able to transfer theirdatabases to the centralized database systems or tosynchronize their databases with those at thecentralized database systems. In some cases, amobile database system may only manage a portion ofa large central database, pulling in additional dataon demand and pushing back data that are notrequired. In a mobile environment where databasesare on the move and little computing resources areavailable, the database location, query processing,and data recovery capabilities of the mobiledatabase systems will have to be further improved.

- Explore Agent TechnologiesThe relatively high cost of connection time and dataexchange for mobile devices discourages the adoptionof mobile commerce by cost-sensitive organizations.Agent technologies can alleviate this problem.

M-commerce users can contact agents to look forproducts and services, to locate merchants, tonegotiate prices, and to make payments. All of these

activities can be performed without having themobile devices constantly connected to the network.In an agent-based mobile commerce framework, agentscan be envisioned as merchants, consumers, and otherbrokering services, interacting with one another toenable electronic transactions.

- Security as the basic barrierAny party engaging in business needs a certain levelof security. Security relies on a set of basicconcepts and requirements such as: confidentiality,authentication, integrity, non-repudiation, andauthorization. Confidentiality assures that theexchange of messages between parties over wirelessaccess networks or global networks is not beingmonitored by non-authorized parties. Authenticationensures that the parties engaging in business arewho they claim to be. Integrity allows users toverify whether modifications have occurred; however,it does not guarantee that information has not beenaltered Non-repudiation certifies that the businesstransactions the parties engage in are legallybinding. Authorization refers to a set of accessrights assigned to an entity by a certificationauthority (CA). It does not guarantee that messagesreceived do really come from a given counterpart;that is the task of authentication.

Additionally, researchers have defined othersecurity threats related to mobile commerce, namelyhostility, information security, and vulnerability.Hostility means that dishonest customers who getfraudulent identities by stealing mobile devices can makeillegal operations and, thus, should be quicklyidentifiable. Information is more vulnerable in wirelessnetworks since other parties can easily intercept it. Thesolution is to encrypt data with adequate keys.Vulnerability arises from a malfunctioning of the mobiledevice itself or from the physical access of maliciouspersons to the terminals. To remedy these additionalproblems, researchers suggested the use of a mixedpersonal identification number (PIN) storage scheme whichlet the PIN be partially stored on the mobile device

while the remainder of the PIN is stored on the network.Researchers assume that the probability of discoveringthe PIN located at two different places does not dependon the length of the PIN or on the fact that a singlepart was discovered. Thus, discovering the whole PIN willrequire digging and/or guessing for twice as long than ifthe PIN was located at a single place. The improvementsbrought about by this strategy have been shown using aprobabilistic model, but its implementation has yet to beinvestigated.

There are a lot of other security issues andchallenges related to m-commerce: security of thetransactions, security of the payments, security ofcustomer information end-to-end security, authorizationmechanisms, and so on. Providing security provisions forthe m-commerce community is challenging due to theinsecure air interface of wireless access networks, andlimited computational capability of mobile devices andusers’ mobility. The limited equipment resources requirethe e-payment protocol in the wireless Internetenvironment to be designed in consideration of theefficiency of the computing functions and the storagedevice. In this context, security issues, like thosedealing with service and subscriber authorizations inenhanced prepaid implementations for m-commerce, must beaddressed. In fact, client application and subscriber-level authentication and authorization are key mechanismsused to regulate access to and usage of content-basedtransactions in m-commerce. The objective is to providean enriched rating engine and a highly configurablefeature set for service and content charging on wirelessnetworks.

Another issue in m-commerce security concerns theincreasing number of destructive messages with virusesthat can harm mobile devices. Such an issue is trulycritical in the context of mobile applications which aregenerally deployed by small mobile devices with limitedprocessing and storage capabilities.

Two of the most security risks for wireless devicesare platform risks and software application risks.Platform risks are related to the fact that many

manufacturers have failed to include some basic operatingsystem features necessary to enable some kinds of securecomputing: memory protection for processes protectedkernel rings, file access control, authentication ofprincipals to resources, biometric authentication, and soforth. Without a secure infrastructure provided by theplatform and used by the device running m-commerceapplications, it is difficult to achieve secure m-commerce. Software application risks are related to thecapability to design and develop secure wirelessapplications using good software engineering andassurance methods. One of the most important issues inthis context is the ability to develop software forsending and executing mobile codes and agents to wirelessdevices, by taking into account the need to reduce thecommunication load on extremely bandwidth-limitedwireless links.

Mobile commerce applicationsElectronic commerce includes a wide variety of

business applications such as tendering and auctions;mobile commerce applications not only cover all theexisting electronic commerce applications, but also newapplications such as mobile inventory management that aresimply not possible for traditional electronic commerce.Mobile commerce applications are involved in almost everyaspect of our daily lives from the way we travel to workto the way we select our meals. The study pays a specialinterest to mobile banking and mobile payment.

The following table lists the some common mobile commerceapplications:

* Mobile advertisingIncome from mobile advertising is a major source

of revenue for mobile content providers such asYahoo! and Google. They use different ways to postadvertisements and charge the owners of theadvertisements. For example, Google’s mobile adsappear on mobile websites or when users searchGoogle from a mobile device when users click on amobile ad, Google will send the users to the mobilewebpage or offer them the option to connect to thebusiness phone of the ad. Services are like:

- Display advertising:Ads are targeted using the same wide array ofoptions as traditional web banners (e.g. context,demographics, behavioral)—and can take into accountthe user’s location, which is a significant featurewhen marketing to consumers who are "on the go".

- Mobile ad tools:

These offer a way for advertisers to select thecall–to–action that works best for their business,for example by allowing customers to click throughto a promotional site, find or call a storedirectly, be sent a coupon or receive an SMSmessage.

* Mobile entertainmentEntertainment has always played a crucial role in

Internet applications and is probably the mostpopular application for the younger generation.Mobile commerce makes it possible to downloadaudio/game/image/music/video files at anytime andanywhere, and it also makes on-line games andgambling much easier to access and play.

* Mobile enterprise resource planningEnterprise resource planning (ERP) is an industry

term for the broad set of activities supported bythe type of multi-module application software thatassists a manufacturer or other organization tomanage important aspects of its business includingproduct planning, purchasing parts, maintaininginventories, interacting with suppliers, providingcustomer service, and tracking orders. The ERPissues that are particularly relevant to mobilecommerce include tracking the location of goods andservices, locating specific items, and transmittingwarnings about aging components.

Case study: "Mobile Stores" applicationMobile application that is developed for "Arab

Contractors IT Department" that a project manager or sitemanager uses to determine the nearby store location of astock item that he needs urgently by connecting to theERP system from the mobile application.

* Mobile Health CareSoaring health care costs can be reduced and

efficiency enhanced with the help of mobilecommerce. By using the technology made possible bymobile commerce physicians and nurses can remotelyaccess and update patient records immediately afunction which has often incurred a considerable

delay in the past. This improves efficiency andproductivity, reduces administrative overheads, andenhances overall service quality.

Case study: "mobile Echocardiography" applicationA mobile application to make a complete heart test

by using the mobile implemented by an Egyptian developerand physician called "Amr AlHossary" and he got a patentfor that application.

* Mobile location based servicesThe location of the mobile phone user is an

important piece of information used during mobilecommerce or m-commerce transactions. Knowing thelocation of the user allows for location-basedservices such as:

1- Local discount offers 2- Local weather 3- Tracking and monitoring ofpeople

MOBILE PAYMENT

Also referred to as mobile money, mobile moneytransfer, and mobile wallet generally refer to paymentservices operated under financial regulation andperformed from or via a mobile device. Instead of payingwith cash, check, or credit cards, a consumer can use amobile phone to pay for a wide range of services anddigital or hard goods in Kenya money transfer is mainlydone through the use of mobile phones, (Pease 2009).

In developing countries mobile payment solutionshave been deployed as a means of extending financialservices to the community known as the "unbanked" or"underbanked," which is estimated to be as much as 50% ofthe world's adult population.

Why M-Payments?There are some reasons that support using of m-payments:

• Personalization and convenience: Consumer uses the mobile device which is easy to carry and is usually a personal device. This ensurestraceability and trust for merchants.

• Security: SIM card and PIN ensure more security of transactions when compared to e-payments.

• Localization: Depending on the geographical area from which the device is being operated, the services according to the local customs and preferences may be provided to the consumers.

• Allows both voice and text communication: Mobile devices allow both voice and data to be communicated. This enables multiple services to be offered to consumers.

Simple m-payment process

There are four primary models for mobile payments: Premium SMS based transactional payments Direct Mobile Billing (D2B) Direct to Bill. Mobile web payments Contactless NFC (Near Field Communication)

1-Premium SMS based transactional paymentsThe consumer sends a payment request via an SMS textmessage to a short code and a premium charge isapplied to their phone bill or their online wallet.The merchant involved is informed of the paymentsuccess and can then release the paid for goods.

But there're some disadvantages for Premium SMS basedtransactional payments like:

Poor reliability - Transactional payments can easily fail asmessages get lost.

Slow speed – sending messages can be slow and it can take hours for a merchant to get receipt of payment. Consumers do not want to be kept waiting more than a few seconds

High cost Low follow-on sales - once the payment message has been sent

and the goods received there is little else the consumer can do. It is difficult for them to remember where something was purchased or how to buy it again.

2-Direct Mobile Billing (D2B) Direct to BillThe consumer uses the mobile billing option duringcheckout at an e-commerce site—such as an onlinegaming site—to make a payment. After two-factorauthentication involving a PIN and One-Time-Password,the consumer's mobile account is charged for thepurchase. It is a true alternative payment methodthat does not require the use of credit/debit cardsor pre-registration at an online payment solutionsuch as PayPal, thus bypassing banks and credit cardcompanies altogether. This type of mobile paymentmethod, which is extremely prevalent and popular inAsia.

Direct Mobile Billing provides the following benefits:-Security - Easy-Fast - Convenience

3-Mobile web payments (WAP)The consumer uses web pages displayed or additionalapplications downloaded and installed on the mobilephone to make a payment. It uses WAP (WirelessApplication Protocol) as underlying technology.

By using mobile payment system you can perform some actslike: e-parking and e-ticketing.Using Mobile Web Payments has some advantages such as:

Follow-on sales High customer satisfaction from quick and predictable

payments Ease of use from a familiar set of online payment pages

4-Contactless (NFC) Near Field Communication(NFC) is used mostly in paying for purchases made inphysical stores or transportation services. Aconsumer using a special mobile phone equipped with asmartcard waves his/her phone near a reader module.Most transactions do not require authentication, butsome require authentication using PIN, beforetransaction is completed. The payment could bededucted from a pre-paid account or charged to amobile or bank account directly.

Mobile payment method via NFC faces significantchallenges for wide and fast adoption, due to lack ofsupporting infrastructure, complex ecosystem ofstakeholders, and standards. Some phone manufacturers andbanks, however, are enthusiastic. Ericsson and Aconiteare examples of businesses that make it possible forbanks to create consumer mobile payment applications thattake advantage of NFC technology.

The issues that are restricting m-payments solutions frombeing adopted are: (Barriers)

• Anonymity: Sharing data with many parties keeps the customers away fromonline payments, even though it is convenient, they wish to beanonymous.

• Possibility of theft: The mobile device gets lost more easily than a creditcard. So, consumers may refrain from using the mobile deviceas a wallet.

• Signal reception: Quality of signal reception can be limited (e.g., inbuildings). This may prevent transactions from being carriedout or completed with less reliability.

• High costs: the mobile operators or banks have a high credit risk. So, theservice provider investment is high for implementing andupgrading the solutions.

• Hardware and software flexibility: Hardware and software used for the m-payment solutions is relatively inflexible.

Characteristics required of effective and successful m-payments.

• Ease of use/convenience: The payment process should be simple to learn and convenient to use to enable more consumers to prefer the payment method.

• Low cost to implement: For the merchant and the service provider, process should take less investment in terms of infrastructure and technologies upgrading.

• Reliability: The process should be reliable and less prone to fraudulentactivities.• User/market acceptance• Security• Flexibility: The system should be possible to enhance and include new

features, as the requirements of the customers andtechnologies change day to day.

• Speed• Scalability: The payment solutions should be scalable in nature.

Case study: "Mobile Payment in Egypt" applicationDespite the eye catching headline mentioned in the

papers lately; it turned out to be merely that the moneytransfer operation is done off the mobile. Somebody goesto Vodafone branch and asks for transferring money toanother person getting the money from another Vodafonebranch!!! Where is the mobile money transfer in that????

MOBILE BANKINGM-banking refers to the execution of financial services

using mobile communication techniques together with mobiledevices.

M-banking allows customers to check account balances,transfer funds and access many other banking products andservices from anywhere, at any time. Banks all over the world

have started to use Mobile phone as a new channel to attractnew customers. According to Yankee group, the number of m-banking users will be between 500 million and 1.1billion m-banking users globally by 2015. Developing countries have alsostarted to realize m-banking and have already started adoptingit such as the United Arab Emirates (UAE), South Africa,Kenya, and Botswana.

Consumer Resistance to InnovationAn important prevalent factor in adopting m-banking

is "customer resistance to change" and it is describedthrough different barriers that prevent the adoption ofan innovation. It consists of Usage; value and riskbarriers representing functional barriers, whereastradition and image barriers refer to psychologicalbarriers. Functional barriers are likely to arise ifconsumers perceive considerable changes from adopting aninnovation, while psychological barriers are often causedby conflict with consumers’ prior beliefs.

Usage barrier is mostly related to the usability;including complexity and ease-of-use of an innovation. Inm-banking services, consumers have reported inconveniencedue to the small keyboard and tiny display of the device.On the other hand, the value barrier is based on theeconomic value of an innovation, and refers to the low-to-price compared to its alternative products. Althoughm-banking might be perceived to be expensive, it wasfound that some of the m-banking services increasecustomers’ feeling of control over their financialaffairs. Risk barrier refers to the degree of potentialrisks an innovation may require.

On the other side, Traditional barrier generallyinvolve the changes an innovation may cause in dailyroutines. The image barrier is associated with differenttypes of anxiety towards computers. Researchers statedthat the image barrier in online banking emerges from anegative hard-to-use image of computers and the Internet.

M-Banking in EgyptEgypt has a great potential to expand in mobile

banking activities due to the great dissemination rate of

handsets whereas the total number of mobile subscribershas already reached 77.76 million in July 2011. Besides,the availability of alternative payment methods such ascredit cards, the rapid development of telecommunicationsand IT networks. Finally the significant unbankedpopulation, with only 10% of the population holding bankaccounts highlights the role of mobile banking in Egypt.

There are currently 39 banks in Egypt, 5 public and34 private banks. As early as 2000, 19 out of a total of39 banks (58%) were offering Internet banking services.Yet, Internet banking services have not taken off inEgypt because of low rates Internet penetration.According to the Ministry of Communication andInformation Technology (MCIT), the number of Internetusers in Egypt is 26.54 million, however10 millionalready access the Internet through mobile. Therefore,there is an upward trend in the Egyptian mobileusage .Furthermore, 90% of the telecom providers’ revenuein Egypt is obtained from voice services. Accordingly,Telecom operators are now trying to target, acquire andretain subscribers by offering new services such as m-banking service. In 2009, Egypt’s central bank hasfinalized the regulatory framework for m-banking Telecomoperators such as Mobinil and Vodafone have alreadypartnered with local banks. Not to mention thatcurrently, in some Egyptian banks, customers can now payfor their mobile bills using their phones via SMS.

The current Internet and m-banking market in Egyptwas found to be relatively small. With regards toconsumers’ barriers to Internet and m-banking, perceivedrisk was found to be the most important factor thatdiscourages adoption of the service.Consumers tend to have low confidence towards Internetand m-banking due to the fear of fraud. The findings alsoshowed that respondents believe that internet m-bankingis not easy to use, and that non-users of Internetbanking tend to have no prior experience with computersor with new technology such as mobile phones.The tradition barrier is also regarded as one of themajor barriers, where consumers in Egypt seem lessaffected by technology advancement, and that old beliefs

of cash-carry banking might have been considered as maincauses.

FUTURE TRENDS IN MOBILE COMMERCE

In light of the fact that m-commerce is just at its inception the real potential has yet to be visualized, let alone tapped Noting that the highly-personalized, context-aware, location sensitive, time-critical applications are the most promising applications in m-commerce, there are many m-commerce applications envisaged to become very widely popular. They include: digital cash (to enable mobile users to settle transactions requiring micro-payments), human-to machine communications (to facilitate mobile users to communicateto stationary locations for access and security and to moving objects for asset and logistic purposes using RFIDtechnologies), telemetry (to activate remote recording devices for sensing and measurement information) and broadband-interactive multimedia communications and messaging anytime, anywhere.

4G systems with more security, higher speeds, highercapacity, lower costs, and more intelligentinfrastructures and devices will help realize m-commerceapplications. With improved wireless security and privacythrough data encryption and user education, on the onehand, and with the wide deployment of 4G systems, on theother hand, it is anticipated that m-commerce will,inescapably, become the most dominant method ofconducting business transactions.

In general, some factors are to be addressed andtackled in order to accelerate mobile commerce growth andadoption such as:

- Accessibility to secure payment infrastructure - Readiness of service providers to adopt mobilecommerce - Consumer trust and education

- Optimizing sites and applications

CONCLUSIONThis study exposed the main benefits, opportunities,

challenges of m-commerce. We also shown differentapplications categories for mobile commerce and differentcases in Egypt .are presented also success factors for aneffective mobile commerce evolution and growth. Knowingabout these issues and challenges aids in developing andeffective plan for mobile commerce to evolve in Egypt.So, review some common mobile commerce applications andask yourself what are their success factors if they aresuccessful or adoption barriers if they are not.

RECOMMENDATIONSIn order to ensure the m-commerce success,

developers should focus on security issues, and on raising consumer awareness and acceptance of new technology-based mobile services more, through advertising and promotion rather than word-of-mouth communication. Moreover, more cooperation from telecom firms is highly needed in order to decrease the cost feesthat customers, who would in turn help engage more customers in these services.

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