By Sol E. Solomon
Tuesday, March 04 2008 05:32 PM
URL: http://www.zdnetasia.com/news/business/0,39044229,62038485,00.htm

Expect greater adoption of mobile commerce (m-commerce) in the Asia-Pacific region this year as service providers, mobile operators and phone makers introduce new applications in the coming months, say industry observers.

"What was considered technically doubtful five years ago, m-commerce in Asia-Pacific will see a steady 18.4 percent growth as self-service applications provide significant value to mobile and traveling users," research house XMG said in a recent press release.

In fact, Sandy Shen, mobile and wireless research director at Gartner, said in an e-mail interview that m-commerce has already begun to show strong momentum in some Asian countries.

According to Winston Goh, Samsung Asia's product marketing manager, for most phone users, m-commerce currently still largely revolves around the purchase of ringtones, wallpapers and the like. However, among professionals, managers, executives and businessmen, mobile banking and stock trading are also gaining popularity, Goh said in an e-mail interview.

Alex Chau, IDC's Asia-Pacific senior research manager of mobile and wireless technologies and services research, said mobile payment services are the most popular among m-commerce applications.

Mobile payments on trial Various mobile payment trials are currently being conducted across the region, noted Alex Chau, IDC's Asia-Pacific senior research manager of mobile and wireless technologies and services research. Among these, Chau said, Japan is testing a system that uses RFID (radio frequency identification) in the handset to allow users to make payments of small amounts--and set the payment limit--for purchases at places such as convenience stores that would normally require cash. "In the Philippines, there are a number of commercial and e-government systems that are, technically speaking, mobile payments as they enable cash transfers between users using mobile phones via the use of SMS," he said.

Gartner's Shen noted that Asia is likely to see some markets spearheading m-payment with new technologies or innovative business models, while mobile banking will be deployed on a much wider basis.

Phua Chai Chung, deputy director of consumer products at SingTel, also expects m-payments to become more prevalent.

"Previously, mobile users used their phones to purchase mobile content and pay for their transactions through their prepaid or postpaid account. Moving ahead, if credit card and direct debit transactions can be initiated through the mobile phone, it will open the door to new opportunities in what consumers can transact and how they transact with their phones," Phua said in an e-mail interview.

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"This makes the end-user experience even more convenient and compelling," Phua said, adding that near-field communications (NFC) technology could give m-commerce a boost.

"The NFC mobile phone will be able to complement physical contactless cards. The benefits of carrying one phone with multiple wallets or cards will be very appealing to consumers," he said.

According to Shen, m-payments using NFC will be adopted in advanced markets such as Taiwan, Hong Kong and Singapore. In countries such as China, India, the Philippines and Malaysia, m-payments using SMS, WAP (wireless application protocol) and USSD (unstructured supplementary service data) are already available, "though the adoption is still low except for SMS money transfers", she added.

For m-payment alone, Gartner expects the number of users in Asia to increase from 6 million in 2006 to 28 million in 2008. To facilitate the growth and adoption of such services, Phua said mobile operators will need to collaborate with players in the financial services industry.

"To ensure that a larger group of customers can enjoy the service, operators need to make sure the service is compatible and can be used on as many handsets--in terms of brand and model--as possible," he explained. "The user interface must also be simple and intuitive."

Samsung's Goh noted that due to local banking regulations and concerns over end-user security, applications such as mobile banking and stock trading need to be developed by the organizations providing these services.

"For compatibility reasons, we usually urge application developers to work with Java as this enhances cross-platform compatibility," he said, adding that Samsung offers operating systems such as Symbian and Windows Mobile, as well as its own proprietary operating system, on its mobile phones.