Comparison Between Online Trading V/S Offline Trading

M-Commerce

1.1 Introduction

M-commerce is also known as Mobile Commerce which is another form of wireless E-commerce. As M-commerce is "the delivery of electronic commerce capabilities directly into the hands, anywhere, via wireless technology" and "putting a retail outlet in the customer's hands anywhere." This can be done with just a mobile phone, a PDA connected to a mobile phone or even a portable PC connected to a mobile phone. The term M-Commerce is all about wireless E-Commerce that is where mobile devices are used to do business on the internet either in B2B or B2C market.

1.2 Definition of M-Commerce

Mobile Commerce is any transaction, involving the transfer of ownership or rights to use goods and services, which is initiated and/or completed by using mobile access to computer-mediated networks with the help of an electronic device.

Or

Mobile Commerce is the use of information technologies and communication technologies for the purpose of mobile integration of different value chains an business processes, and for the purpose of management of business relationships

As there are two area in M-Commerce which are relevant to the security

• Network Technologies: As the network technologies which are used in the M-Commerce are wireless systems and basic service and existing network technology like 2G (2nd Generation) and 3G (3rd Generation).

• M-Payments: When business is done on the internet related to the goods and services it requires a M-Payment which is done through mobile device in the form of the electronic money which is in the form of software electronic coins, hardware electronics coins and background accounts.

As the security is one of the relevant factor in the M-Commerce which leads it to become more famous in the different customers than E-Commerce.

1.3 History Of M-Commerce

← Mobile commerce was born in 1997 when the first two mobile-phone enabled Coca Cola vending machines were installed in the Helsinki area in Finland. The machines accepted payment via SMS text messages

← In 1997 the first mobile phone banking service was launched in Finland by Merita Bank of Finland.

← In 1998 first sale of digital content as downloads to mobile phone were launched in Finland by Radiolinja.

← In 1999 Two major national commercial platforms for mobile commerce were launched Smart Money In Philippines and NTT DoCoMo's i-Mode Internet service in Japan

1.4 Mobile Devices used in M-Commerce

• Mobile Phone: A mobile phone is a device which allows us to calls into the public switched telephone system over a radio link. As Mobile phones are used in our today’s life for using the wide variety of services like MMS, SMS, and receiving emails and doing banking activities etc.

• PDA (Personal Digital Assistant): A PDA is a mobile device that functions as a personal information manager. Current PDAs often have the ability to connect to the Internet. A PDA has an electronic visual display, enabling it to include a web browser, but some newer models also have audio capabilities, enabling them to be used as mobile phones or portable media players. Many PDAs can access the Internet, intranets or extranets via Wi-Fi or Wireless Wide Area Networks.

• Smart Phone: A smart phone is a combination of mobile phone and PDA technology into one device. Mostly today all the brands of mobiles have a category of the smart phones and one of the example of smart phone is Apple iPhone 4.

• Laptop: A laptop, also called a notebook is a personal computer for mobile use. A laptop integrates most of the typical components of a desktop computer, including a display, a keyboard, a pointing device and speakers into a single unit. A laptop is powered by mains electricity via an AC adapter, and can be used away from an outlet using a rechargeable battery. And today it also comes with SIM Inbuilt feature for wireless communication at any place.

Each mobile device has certain characteristics that influence its usability, such as • Size and colour of display • Input device, availability of keyboard and mouse • Memory and CPU processing power • Network connectivity, bandwidth capacity • Supported operating systems (e.g. PalmOS, Microsoft Pocket PC) • Availability of internal smart card reader (e.g. for a SIM card in mobile phones)

Depending on these factors, the services that the end user can receive differ considerably. Moreover, depending on the network technology used for transmission, the bandwidth capacity varies and influences the kind of services that the end user is able to receive. In mobile phones, there exist three solutions to internal smart cards: single SIM, dual chip, and dual slot. Single SIM is the solution that is most widely available today, where all confidential user information is stored on one smart card. Dual chip means that there are two smart cards in the mobile phone, one for user authentication to the network operator and one for value-added services like m-payment or digital signature. A dual slot mobile phone has a
3 SIM card and a card slot for a full-sized external smart card. With this solution different cards can be used one after the other. Moreover, the cards can also be used in traditional POS and ATM terminals.
1.5 Wireless Communication Technologies used in M-Commerce
Wireless communication, is the transfer of information between two or more points that are physically not connected. Distances can be short, as a few meters as in television remote control; or long ranging from thousands to millions of kilometers for deep-space radio communications. It encompasses various types of fixed, mobile, and portable two-way radios, cellular telephones, personal digital assistants (PDAs), and wireless networking. As some wireless communication technologies which are used in M-Commerce are as follow • GPRS: General packet radio service (GPRS) is a packet oriented mobile data service on the 2G and 3G cellular communication system's global system for mobile communications (GSM). • CDMA: Code division multiple access (CDMA) is a channel access method used by various radio communication technologies. It should not be confused with the mobile phone standards called cdmaOne, • GSM: GSM (Global System for Mobile Communications, originally Groupe Spécial Mobile), is a standard set developed by the European Telecommunications Standards Institute (ETSI) to describe technologies for second generation (or "2G") digital cellular networks. • GPS: The Global Positioning System (GPS) is a space-based global navigation satellite system (GNSS) that provides location and time information in all weather, anywhere on or near the Earth, where there is an unobstructed line of sight to four or more GPS satellites. It is maintained by the United States government and is freely accessible by anyone with a GPS receiver with some technical limitations which are only removed for military users. • EDGE: Enhanced Data rates for GSM Evolution (EDGE) (also known as Enhanced GPRS (EGPRS), or Enhanced Data rates for Global Evolution) is a digital mobile phone technology that allows improved data transmission rates as a backward-compatible extension of GSM. EDGE is considered a pre-3G radio technology. EDGE is standardized by 3GPP as part of the GSM family. EDGE can be used for any packet switched application, such as an Internet connection.

1.6 Difference Between M-Commerce And E-Commerce
|Technology |E-Commerce |M-Commerce |
|Device |PC |Smart Phones, Pagers, PDA’s |
|Operating System |Window, Unix And Linux |Symbian (EPOC), PALM OS, Pocket PC, Proprietary |
| | |Platforms. |
|Presentation Standards |HTML |HTML, WML, HDML, i-Mode |
|Browser |Microsoft Internet Explorer, Netscape, |UP Browser, Nokia Mobile Browser, MS Mobile |
| |Mozilla Firefox |Explorer |
|Bearer Networks |TCP/IP & Fixed Wireless Internet |GSM, GSM/GPRS, TDMA, CDMA, CDPD |

1.7 How the Working is done through M-Commerce
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First of all the consumer must have a mobile device which can be used for the M-Commerce activities or can able to use its applications then there is need of the GPRS service enabled on the phone so the consumer can connect to the internet. As the consumer wants to buy the goods he visit the mobile website of the merchant or he use a buying application to order the item as the payment is done by the M-Payment method which is done with the help of mobile wallet facility provided consumer bank through which the payment is processed on the side of the retailer or merchant or by the help of the retailer transaction management system in which the payment is done on internet in the form of electronic payment and the funds are deducted from the consumer account and transferred to the merchant bank account after successful payment transaction by the help of internet banking or by the help of mobile banking software. As there is a web server at the both the ends of the consumer and the merchant which hold the transaction in a very safe manner and in a secure manner the whole information is send in an encrypted form from the one web server to the other web server so that there will no loss if the information get hacked it will not be understandable by the hacker and he cannot do any illegal activity.

1.8 Applications of M-Commerce
As there are various M-commerce applications which are used to perform the different activities like Mobile Banking, Ticket Booking, Content Purchasing and delivering, and getting the information services, Location Based services and Mobile banking etc . As the applications are as follow:
1.) Mobile ticketing
Tickets can be sent to mobile phones using a variety of technologies. Users are then able to use their tickets immediately by presenting their phones at the venue. Tickets can be booked and cancelled on the mobile with the help of simple application downloads or by accessing WAP portals of various Travel agents or direct service providers. Mobile ticketing for airports, ballparks, and train stations, for example, will not only streamline unexpected metropolitan traffic surges, but also help users remotely secure parking spots (even while in their vehicles) and greatly facilitate mass surveillance at transport hubs.

2.) Mobile vouchers, coupons and loyalty cards

Mobile ticketing technology can also be used for the distribution of vouchers, coupons and loyalty cards. The voucher, coupon, or loyalty card is represented by a virtual token that is sent to the mobile phone. Presenting a mobile phone with one of these tokens at the point of sale allows the customer to receive the same benefits as another customer who has a loyalty card or other paper coupon/voucher. Mobile delivery enables: • Economy of scale • Quicker and easier delivery • Affective target marketing • Privacy-friendly data mining on consumer behaviour • Environment-friendly and resources-saving efficacy

3.) Content purchase and delivery

Currently, mobile content purchase and delivery mainly consists of the sale of ring-tones, wallpapers, and games for mobile phones. The convergence of mobile phones, mp3 players and video players into a single device will result in an increase in the purchase and delivery of full-length music tracks and video. Download speeds, if increased to 4G levels, will make it possible to buy a movie on a mobile device in a couple of seconds, while on the go. As the contents are purchased by paying the specific cost paid by the user of the mobile phone. The cost varies from content to content.

4.) Location-based services

Unlike a home PC, the location of the mobile phone user is an important piece of information used during mobile commerce transactions. Knowing the location of the user allows for location based services such as: • local maps • local offers • local weather • people tracking and monitoring

5.) Information services

A wide variety of information services can be delivered to mobile phone users in much the same way as it is delivered to PCs. These services include: • news services • stock data • sports results • financial records • traffic data and information
Particularly, more customized traffic information, based on users' travel patterns, will be multicast on a differentiated basis, instead of broadcasting the same news and data to all Users. This type of multicasting will be suited for more bandwidth-intensive mobile equipment.

6.) Mobile Banking

Banks and other financial institutions are exploring the use of mobile commerce to allow their customers to not only access account information, but also make transactions, e.g. purchasing stocks, remitting money, via mobile phones and other mobile equipment. This service is often referred to as Mobile Banking or M-Banking. More negative issues like ID theft, phishing and pharming are lurking when it comes to mobile banking, particularly done on the mobile web. Net security technology free from redundancy and paradigm shifts away from mobile web-based banking will be an optimal solution to mobile banking in the near future. As today mobile banking can be done at any place from the mobile just by visiting the mobile website of the bank and the transaction is done in the same way as done on computer or any other computer device. The mobile banking has the limited options but all the options which were given on the mobile websites are the major ones which a user uses in his/her daily life.

7.) Mobile brokerage

Stock market services offered via mobile devices have also become more popular and are known as Mobile Brokerage. They allow the subscriber to react to market developments in a timely fashion and irrespective of their physical location.

8.) Auctions

Over the past three years Mobile reverse action solutions have grown in popularity. Unlike traditional auctions, the reverse auction (or low-bid auction) bills the consumer's phone each time they place a bid. Many mobile PSMS commerce solutions rely on a one-time purchase or one-time subscription; however, reverse auctions are high return applications as they allow the consumer to transact over a long period of time.

9.) Mobile purchase

Mobile purchase allows customers to shop online at any time in any location. Customers can browse and order products while using a cheap, secure payment method. Instead of using paper catalogues, retailers can send customers a list of products that the customer would be interested in, directly to their mobile device or consumers can visit a mobile version of a retailer’s ecommerce site. Additionally, retailers will also be able to track customers at all times and notify them of discounts at local stores that the customer would be interested in.

10.) Mobile marketing and advertising

Mobile marketing is an emerging concept, but the speed with which it's growing its roots is remarkable. Mobile marketing is highly responsive sort of marketing campaign, especially from brands’ experience point of view. And almost all brands are getting higher campaign response rates. Corporations are now using m-commerce to expand everything from services to marketing and advertisement. Although there are currently very few regulations on the use and abuses of mobile commerce, this will change in the next few years. With the increased use of m-commerce comes increased security. Cell phone companies are now spending more money to protect their customers and their information from online intrusions and hackers.

1.9 M-Payment System in M-Commerce
Mobile payment or known also as Mobile wallet is an alternative payment method. Instead of paying with cash, cheque or credit cards, a consumer can use a mobile phone to pay for a wide range of services and digital or hard goods. In the following, we categorise m-payment systems according to the where about of the customer’s money:

i. Software electronic coins – electronic money stored on the mobile in file format. ii. Hardware electronic coins – electronic money stored on the mobile device on a smart card. iii. Background account – electronic money stored in a remote account at a trusted third party.

i. Software Electronic Coins: In this case, monetary value is stored on the mobile device and the customer has full control of his/her money wherever he/she goes and whatever he/she does. An electronic coin is represented as a file containing, among other information, a value, a serial number, a validity period and the signature of the issuing bank. Since software electronic coins are easy to copy, the validity of an electronic coin depends on its uniqueness in terms of its serial number. The customer transfers electronic coins to the merchant, who forwards them to the issuing bank for the “double spending test.”

ii. Hardware Electronic Coins In this case, monetary value is stored on a secure hardware token, typically a smart card, in the mobile device. The presentation of electronic money is not important, as long as it is stored securely on the smart card. Electronic money could be represented as a simple numeric counter. In order to get to the money, the customer’s smart card and the merchant’s payment server authenticate each other and a secure channel is set up between them. Then, electronic money can be transferred from one to the other. This approach is quite attractive because smart cards provide an additional level of mobility. That means the payment smart card can also be used in POS transactions. E.g., Geldkarte, Mondex and Barclay card.

iii. Background Account Here, the money is stored remotely on an account at a trusted third party. Depending on the specific payment system, the account could be a credit card account, a bank account, or an account held at the network operator. For example, in some cases this data is sent in the clear (e.g. a credit card authorisation) not providing any security against eavesdropping and in some cases this information is encrypted and digitally signed, providing anonymity to the customer (e.g. SET – Secure Electronic Transactions).

1.10 Advantages & Disadvantages of M-Commerce
1.10.1 Advantages • Accessibility – Accessibility is related to ubiquity and means that the end user is accessible anywhere at any time. Accessibility is probably the major advantage by comparison with e-commerce applications involving a wired end user device. • Security – Depending on the specific end user device, the device offers a certain level of inherent security. For example, the SIM card commonly employed in mobile phones is a smart card that stores confidential user information, such as the user’s secret authentication key. As such, the mobile phone can be regarded as a smart card reader with smart card. • Localisation – A network operator can localise registered users by using a positioning systems, such as GPS, or via GSM or UMTS network technology, and offer location dependent services. Those services include local information services about hotels, restaurants, and amenities, travel information, emergency calls, and mobile office facilities. • Convenience – The size and weight of mobile devices and their ubiquity and accessibility makes them an ideal tool for performing personal tasks. • Personalisation – Mobile devices are usually not shared between users. This makes it possible to adjust a mobile device to the user’s needs and wishes (starting with the mobile phone housing and ringtones). On the other hand, a mobile operator can offer personalised services to its users, depending on specified user characteristics (e.g. a user may prefer Italian food) and the user’s location. • Instant Connectivity – There is instant connectivity between the user handset and internet service provider and by that connectivity the user can access various applications on the mobile phone. • High Speed Services: As the technology is changing that is also lead to change in the speed of the different services provided by service provider like downloading which can be done on the mobile at the speed near about 3.6 Mbps. and much more. • Competitive pricing: the services which are offered in the M-commerce are varied in the prices from the company to company because the company has always a aim to take a competitive edge upon its competitors. The competitive edge can be on the bases of the price also.

1.10.2 Disadvantages • Mobile devices offer limited capabilities. • The heterogeneity of devices, operating systems, and network technologies is a challenge for a uniform end user platform. • Mobile devices are more prone to theft and destruction. • The communication over the air interface between mobile device and network introduces additional security threats.

1.11 Conclusion
As m-commerce applications and wireless devices are evolving rapidly, one will take forward the other one towards empowering innovation, versatility and power in them. There are a number of business opportunities and grand challenges of bringing forth viable and robust wireless technologies ahead for fully realizing the enormous strength of m-commerce in this Internet era and thereby meeting both the basic requirements and advanced expectations of mobile users and providers.