A Study of How to Promote the Use of Mobile Payment

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The mobile payment here refers to the on-line wireless payment methods by using mobile type devices, such as mobile phones, PDA and the likes. 2. Abstract 3. Aim To identify what factors has been a drawback or blockage of online payment, and what factors can help promoting the use of mobile payment.

In paradox, there is still not a lot of people knows about mobile commerce and mobile payments as a kind of services. In Ho, Fong, and Yan (2008: 345 – 346) research paper market survey sections showed that, 250/ 250 peoples (total number of questionnaire feed backed) have at least one mobile phone; 92% of the survey populations are using mobile phone as communication channel rather than 3% and 5% are using the device as commerce and content purposes; lastly, about 77% of the survey population are not sure and never heard about mobile commerce.

Consequently, many people still have no idea about their mobile phone actually can be function as a payment device. Opinion is clear that people want services that fit easily into their normal mobile workflow and daily lives. People want to do things on the move, yet most people are really sick of sitting in front of the computer for ever matters. 4. Objectives 1. Discover the current mobile payment service and merchants that is available within the current market. Analyse the issues occurring in the services. 2.

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Gathering facts of people not willing and willing to use mobile payment services by collecting sampling from different geographical area of mobile users. 3. Analyse the collection of data and compare with secondary data to determine problems that is actually impact within mobile payment environment 4. Identify the strategic factors that can be possible implement to improving current situation of mobile payment. Suggestion of recommendations and conclusions will be based on the above investigation. 5. Background Electronic payment system is has been played an important roles with e-commerce environments.

It has become progressively more fashionable because of widespread use of the internet-based shopping and banking. These kinds of payments include traditional plastic money – credit, debit and charge card plus included the new emerged technologies such as digital-wallets, e-cash, mobile payment and e-checks. From these rapid technologies evolutions, in 1999, DoCoMo NTT introduced iMode (which is wireless internet through mobile services) in Japan. According to NTT DoCoMo (n. d. ) the mobile internet user has increased from 1 million to 48 million in 2009.

As user are using this wireless internet to download music, games, entertainment , online shopping, paying bills, banking services and others. Moreover, According to (Miniwatts Marketing Group 2009), China has the highest percentage (20. 8%) which was 360,000,000 of internet user among other countries in the world; and in 2007, China has 547,286,000 cell phones usage among the world (Infoplease 2009). Eventually this figure has showed there is more people are using mobile phone compare with internet. As the figures above proved that mobile phone has becomes essential in everyone life. . Critical review of relevant literature 1. Basic Mobile Payment Types Monetary transactions have been played in crucial roles since centuries. People has been adopted various payment methods for transfer monetary values freely for their targeted party or parties. Now a days, people not only transferring their assets by physically currency like notes and coins, but also they have adopt using plastic cards or even virtual money within their daily activities such as buy things in the flea markets, paying train tickets or parking tickets, buying antiques from eBay and so on.

It is required to identify the basic payment method that exists within the mobile environment before further investigations. 1. Mobile Fees Account Payment A very ordinary forms of mobile payment is user usually subscribe an additional mobile services from their fixed mobile account. Normally people use this payment method to purchase software, music, or other correspondence authorities via mobile phone. The fees will be sum up with the monthly basis of an individual customer. No doubt this micropayment method is convenience and quick.

Feig (2007) stated, “…allowing users to charge their purchases at participating Web sites to their mobiles phone bills without having to sign up for an account of even going through a credit card. The customer sends a text to the retailer and the transaction is complete in less than 20 seconds. ” However, there is the high risk if the company did not do the background check on the user whether they can afford to pay the bills. Moreover, it is agreeable become a high risk if users are not clear about the payment instructions and understand the clause and regulation.

Just as one of the point that mentioned in Zhang (2008: 6651), disadvantages of mobile fee account payment is weak guarantee for trading security. 2. Bank Card Mobile Payment Bank card payment is slightly complicated compare with Mobile Fees Account Payment. As this services required a subscription from not only the bank as well as with the mobile service provider. This has abundant financial functions could provide full play to the mobilisation and individualisation characteristics of mobile phone, and provide users with ultra-powerful mobile payment functions (Zhang 2008: 6651).

By using this payment, user can increase the accessibility of checking their financial status for their private account. The reason why it is more secure and powerful is because there is have a tight secure control by not only bank, mobile service provider and merchants but also the processes have to go through with the 3rd party – CA (Certification Authority). It has the abilities to increase prevention likes counterfeit party especially as a “fake” merchant. Although (Zhang 2008: 6651) believed that there is a powerful security guarantee by using bank card mobile payment.

Unfortunately, there is more likely forging the real user identity by just using the same devices once the device got stolen. Mobile phone size are small and it is easy to be dropped or gone missing. As a result, it has been a concern of drawback for people who want to choose this payment method. 3. Token based Mobile Payment Token based payments are another type of mobile payment that can be use within the mobile environments. Usually user exchanges actual money into electronic forms of token from the bank. Just like people exchange their U. S. D. into different countries currency.

The token or tokens contains the actual values of currency for this payment purposes. Eventually Zheng and Chen (2003: 24 – 25) stated that, one particular advantages of token-based payment method is that they are well suited to handle micro-payments, because the administrative charges are relatively lower compared to account-based methods. Unfortunately this payment method is not popular in the conventional electronic commerce environment and not commonly use by the user although the services have been provided. Also, rarely to hear people are using this method within the payment system.

Plus there is no evidence of popularity of this payment that Zheng and Chen (2003: 25) provided within their research. Thus, it is an uncertainty matters to see whether this will be works within the mobile commerce environment. 2. Mobile payment choice Theoretically, bank card services payment method is the choices in B2C business environment. This payment method is highly flexible for end user. Account holder able to purchase anything (bidding antiques on EBay or purchase newspaper article on newspaper site) as they wish. At the end, the ank account holder can utilised their mobile banking to check their bank account status in real time just like online banking services for the user as long as there is mobile internet connections. As this highly convenience payment technology can eliminate annoying queue at ATM for just checking their account or withdrawing piles of cash for shopping. As this payment method have potential of improving its security features due to personal account reasons. Personal account classified as highly confidential information, therefore banks and regulations is responsible to protect their customers.

Thus, by enforcing a tight security measure can attracts users using this payment system and it can enhance grow of banking business. 3. Factors that influence mobile payment In one of the series of Computerworld magazine, Mitchell (2007: 26) has summaries “there’s just one problem: only a tiny percentage of consumers have contactless cards today, and most retailers remain on the sidelines. ” That illustrated that actually most of the business are really ready for various kind of payments – especially mobile payment.

Business will not eliminate any possible opportunity for their business growth. The reason is “…the pharmacy chain CVS/ Caremark Corp. , which has had contactless readers in operation since 2005, say that less than 1% of its card transactions are contactless. ” Mitchell (2007: 26) and a company spokesman said “The adoption of the technology by consumers remains very small,” Mitchell (2007: 26). From the statement above, an identification of factors that constraint mobile payment is required to be further identified. Ho, Fong, and Yan (2008: 348) have listed several obstacles of mobile commerce.

These obstacles are stability of mobile network, standardisation challenge, and user experience. Due to this factors it has been contributed a negative trust within the mobile payment environment. 1. Stability of mobile network facilities Ho, Fong, and Yan (2008: 348) described that mobile network is a wireless network configuration and sometimes exposed to certain threats in the events of network failure. It is clearly that the mobile phone connections are mostly failed when peoples are using the network in the same time especially every New Year.

Mobile network connectivity also can be influenced by the external influence such as weather and also places that have yet been cover with mobile network coverage. Moreover, the current mobile connectivity is still not adequate for mobile payment usage due to instabilities. Usually mobile internet mostly got disconnect when people using it on the subway trains, buses or others moving vehicle. As the current mobile network can only cover within the limited range from the mobile connection towers. Only within the range of coverage will be classified as a cellblock.

There will be an interruption (maybe disconnection) when the mobile connection is skipping from one cell to another cell. 2. Standardisation challenges At the present, mobile phone also mobile payment is lack of standardisation. These issues will makes the mobile payment world more challenging because it will affects the usabilities and trust from the user prospective. Ho, Fong, and Yan (2008: 348) stated the expansion of SMS and mobile messaging for mobile commerce currently lack of officially approval standards.

Different operators would code different header fields and different massage envelops in different ways (Ho, Fong, and Yan 2008: 348). As it showed that it will cause confusion between illegitimate fraud and actual payment services. As well lack of standardisation of display format, operating systems, and different mobile connection protocols can be also a challenge for uniform a recognisable standard to gain customer trust of utilising these payment technologies. Standardisation can be disputes for banks and other financial industry. As standardisation has becomes a crucial legal documents when problem arise.

It will become a crisis as their business protections plus another barrier for mobile payment developments issues. Another barrier that Mallat & Tuunainen (2005: 351) believed that the lack of mobile payment standardisation was caused by competition factors in the mobile commerce market. Mallat & Tuunainen (2005: 351) proved that “… the interviewees were concerned that several competing mobile payment solutions would try to enter the emerging small market where there is little room for several standards…” The merchant are looking for the best solutions to compete with their own competitors.

As a result, these solutions can confuse customers and end users with their different set of system plus it can become costly to provide services and maintenance for all different payment standards that offering to the end user. 3. User experience Besides, there would be other reasons is the drawback of mobile payment system. It is necessary to identify mobile commerce is difference from electronic commerce. Ho, Fong, and Yan (2008: 347) had identified that mobile devices have limited capability like screen display are to concern for the user adopt mobile payment.

Usually people are feels more comfortable with this that have a big display therefore they can read things more properly. This has proved that the buying process of mobile commerce is not as convenient as electronic commerce as usabilities in user experiences Ho, Fong, and Yan (2008: 348). Plus human usually can generate input error via using a small touch screen and keyboard compared with a bigger keypad. Moreover, a complexity of mobile payment system can bring negative effects on user experience. Users are usually adapted to user friendly system compare with a complex functionality without a proper in helps or instructions.

Thus, it can be an impact against the mobile payment because these the mobile phone designed physiologies’ factor. In Mallat & Tuunainen (2005: 351) research mentioned that, “… many interviewees perceived current mobile payment solutions as complex and difficult to use…” Interviewees from the paper has defined “difficult to use” is human are still not accustom to small key pad and be able to type it fast during SMS, which makes this payment method are time consuming and easily to generate typo-error. Users usually presumed mobile payment solutions are efficiency and fast.

The payment system supposes only little or none typing or a few steps during the payment transactions. Thus, the speed of the current payment system is not as efficient that end user expected plus payment procedures are complex. Moreover, there is not enough populations of user to be to justify in the user experience of mobile payment system. As this payment technology has been just emerged within the market not that long ago and therefore it is hard to measure the successful factors of ease to use within the emerging technologies. . Security Other factors that Mitchell (2007: 26) has listed in the paper are due to security and privacy may be slowing the adoption of contactless payment system, but they are largely unfounded. The reason is customers are not comfortable with the new adoption of technologies. Plus, illegitimacy rumours like the movie plot threat have brain washed customer mind that fraudsters can just grab information from the air and used that (Mitchell 2007: 26).

Although Mitchell believed if that is possible, he believed that dynamical verification values would make the fraud and theft difficult to successful replicate and use a card for illegal transactions – unless someone has stolen the user’s sim card and directly duplicate the information from the chips. Therefore, there are still issues within issues for encounter security issues around the technological world. Other than the factors above, most of peoples who possessed small devices like mobile phone have been experienced mobile phone lost and theft.

According to Flatley (2007: 16) the 2005/06 BCS estimates that two per cent of mobile phone owners experienced theft of a mobile phone in the previous 12 months, which is equates to an estimated 800,000 mobile phone owners having experienced a mobile phone theft during the reference period of the 2005/06 BCS13. Ho, Fong, and Yan (2008: 347 – 348) mentioned about one of the reason is because mobile phone are highly personalised and contain confidential user information; they need to be guarded accordingly to the highest security standards.

Another area has yet not been cover in the research is the strong implementation on transaction assurance. As Pasupathinathan et. al. , (2006: 214) noted, “…Each time the card holder makes a purchase, the registered password is verified, thus providing card holder authentication. The card holders also select a “personal assurance message”, which is displayed by the issuer every time the card holder is authenticated. ” The response time of the personal assurance message is crucial to determine the security prevention for the owner. As the security ssurance need to indentify kinds of media they used to compliance the response time plus integrated with a suitable kind of communication forms. 5. Regulation Issues In Zhang and Wu (2009: 684) research, it concluded that “…the relevant electronic commerce laws and regulations are lagging behind. The underground trading of virtual money, virtual Mint, and networks gambling has arisen. In order to protect the legitimate rights, the government has to regulate the virtual money to ensure the better development of virtual money market. This indicated that if these issues arise from the electronic commerce world, it will also arise within the mobile payment environment. Untied regulations and ambiguity of electronic law can only attracts eavesdropping and other security issues for cyber criminal encouragement. Without a proper implementation of law can contributes a major drawback from the mobile payment services. Furthermore from the statement above has excluded the development of laws to protect the actual purpose of using mobile payment system. As if the problem grows more seriously.

It can leads to the growth of cyber crime. “With the rapid growth of electronic payment system, effective measures should be taken to deal with theft, money laundering, tax evasion and other infractions. ” Zhang (2009: 107). Rather than just focus on rules and regulations development, a counter measures and protocols likes limitation amount of transactions had yet not mentioned in the report. Another challenge of the regulation for mobile payment is standardisation. The world has been developed their own laws and regulations to dictate and run their own countries and regions.

Law and regulation are used to protect the countries finance and economic power also their law obedience citizen. Unfortunately in realistic law and regulation can be an ambiguity entity when the technology is evolving. Therefore regulations has been triggered by the need for new and enhanced payment service, and drive or hinder the development of mobile payments (Dalberg et. al. , 2007: 8). Law and regulation becomes ambiguity when globalisation or cross broader financial transaction happened. It will becomes more complex when mobile transaction because the nature of internet law and immaturity of technology law.

Therefore Dalberg et. al. (2007: 8) suggested that unifying regulation and legal frameworks such as the EU directives in the European Commission may reduce complexity and support the development of international mobile payment services can gain the trust of using mobile payment system. 4. Other issues of mobile payment Singh (2004: 511) stated “It was easier to control the flow of cash, for it was immediately evident how much money had been spent and how much money remained. ” That mean human being is easier to control their money when it is a physical forms.

Singh (2004: 511) also stated “Paying for groceries on credit was seen as the beginning of a slippery slope to debt and a loss of control over the budget. ” Since people who possessed credit cards or without handling physical currency, it may face difficulty to budget their spending, thus, banks have redeveloped another kind of notification on mobile payment which can helping the consumer for budgeting their spending. The mobile payment system like Pay pal can be development like a debit card or prepayment system for budget controlling system to increase the encouragement of using mobile payment system.

Significantly, it is another area that payment system can be further develops. In Fang and Peter (2007: 21) empirical research “decision factors for the adoption of an online payment system by customers” summarised that “… nearly 80% of the respondents are young people with ages between 20 and 29. Future research should not only extend the sample coverage into various social settings, but also investigate whether the findings in this study hold in consumers’ adoption process of various e-finance tools other than online bill payment systems. Significantly it may shows because of this age group are more comfortable to accept this type of technology payment system and they were growing up with technology. Thus, it shows that other age groups may have others factors to hold back for the survey. Therefore education and marketing on introducing mobile payments to other age groups can be further improved by adopting different methods and channels. Other than the factors above, Thanh (2000: 467) mentioned that limited bandwidth of wireless link; the limitation of mobile devices concerning processing, storage, battery life, size and weight, WAP is optimised for the ireless environment. These physical factors of mobile phone devices cannot be ignore as the primary factors can cause the failure of development and using mobile payment system. Especially comes to batteries life. This crucial source of power usually plays important roles for mobile payment. User does not want their mobile losing their power while they are in the middle of mobile transaction. Thus, a development or an alternative solution of these features must be investigated. 7. Research methods

In this research, inductive approach will be implemented to be determining the truth of the theory after process or test has carry out. The purpose of this research will adopt exploratory studies for investigating to promote mobile payment within mobile phone environments. By achieving the studies, questionnaire from other similar source has adopted in this research. The questionnaire will be constructed with original set of questions that has been written plus some question that required be adding or tailoring to fit in this research. The questionnaire example has included at the appendix section in this report.

A non-probability sampling techniques like convenience sampling and snowball sampling would be the most suitable techniques to adopt for achieving the result within a short time frame. There will be about 100 – 250 sets of qualitative data would be collected. The questionnaire will be posted on online for peoples all over the world who has been using electronic payment system online. In addition, interview will be included as one of the techniques in this research. For collecting sufficient questionnaire volumes, it has to eliminate the bias against age, gender, geographical and other factors.

After data has been collected, it needs to determine that a suitable sample size is efficient for this research. The formula below can help this report to find out the total response rate in this research. If the result is not optimistic, more data will need to be collected. Total number of responses Total Response rate = Total number in sample – ineligible Moreover, secondary data would be helpful in this research. Thus by combine these two data source, qualitative analysis can be carrying out. Due to there are constraint of time, resource and capabilities, other techniques will not be implemented within this study.

Potential limitations of the this study 1. There appears to be too many areas within the topic and this project will be required to be accomplished within 6 months. Thus only several of study areas will be focus on. 2. It may be difficult to receive a good response from the questionnaires due to mobile payment is not a widely used services. 3. Other issues which is external factors besides that information technology and business perspective that can influence on mobile payment will be not be included in this research. 8. Project Plan

This is the project plan has been drafted in this report, adjustment of the schedule will be made during the project is go along. [pic] 9. References Dahlberg, T. , Mallat, N. , Ondus, J. , Zmijewska, A. (2007), ‘Past, present and future of mobile payments research: A literature review’, in Electronic Commerce Research and Applications 7 (2),p 1 – 17 Fang, H. , and Peter, P. (2007), ‘Decision Factors for the Adoption of an Online Payment System by Customers’, in International Journal of E-Business Research 3 (4),p 1 – 32 Feig, N. 2007), Mobile Payment: Look to Korea [Online] available from [9 February 2010] Flatley, J. (2007),, Mobile phone theft, plastic card and identity fraud: Findings from the 2005/06 British Crime Survey, Home Office Statistical Bulletin 10/07 Ho, H. , Fong, S. , and Yan, Z. (2008), ‘User Acceptance Testing of Mobile Payment in Various Scenarios’. in IEEE International Conference on e-Business Engineering 2008 (7), 341 – 348 Infoplease (2009) Cell Phone Usage Worldwide, by Country [Online] available from [8 February 2010] Mallat, N. , and Tuunainen, V. 2005), ‘Merchant Adoption of Mobile Payment Systems’. in Proceedings of the International Conference on Mobile Business (ICMB’05). Held 21 – 23 July 2005 at Sydney, Australia, Helsinki School of Economics, Helsinki, Finland, 347 – 353 Miniwatts Marketing Group (2009) Top 20 Countries With The Highest Number of Internet Users [Online] available from [8 February 2010] Mitchell, R. (2007), ‘Strategies & Tactics’. in Computerworld 41 (24), 22, 26, 28 NTT DoCoMo (n. d. ) i-Mode History [Online] available from [8 February 2010] Pasupathinathan, V. , Pieprzyk, J. , Wang, H. , Cho, J. , (2006). Formal analysis of card-based payment systems in mobile devices’. in ACM International Conference Proceeding (167) & Proceedings of the 2006 Australasian workshops on Grid computing and e-research 54, p. 213 – 220 Questionpro, 1999, n. d. Consumers’ Perception and Attitude of Financial Sector on electronic wallet. [Online] Available at: http://www. questionpro. com/akira/showSurveyLibrary. do? surveyID=16750&mode=2. [Accessed 11 Dec 2009]. Singh, S. , (2004). ‘Impersonalisation of electronic money: implications for bank marketing’. International Journal of Bank Marketing 22 (7), 504 – 521

Zhang, H. , (2009) ‘The Study on the Influential Factors of Electronic Payment System Adoption’. In ICMSE. 2009 International Conference on Management Science & Engineering (16th). Held 14 – 16 Sept. 2009 at Moscow, Russia, College of Management, Henan University of Technology, P. R. China, 106 – 111 Thanh, D. (2000), ‘Security Issues in Mobile eCommerce’ In Proceedings of the First International Conference on Electronic Commerce and Web Technologies & Lecture Notes In Computer Science (1875), London, UK: Springer-Verlag, 467 – 476 Zhang, T. and Wu, H. 2009), ‘Comparative Static Analysis in the Application of Virtual Money Market’. in IEEC, International Symposium on Information Engineering and Electronic Commerce2009 (6), 681-685 Zhang, Q. (ed. ) (2008) Mobile Payment in Mobile E-Commerce. ‘Proceedings of the 7th World Congress on Intelligent Control and Automation’. Held 25 -27 June 2008 at Chongqing, China. Shanghai: School of Information Management & Engineering, Shanghai University of Finance & Economics Zheng, X. and Chen, D. (2003), ‘Study of Mobile Payment System’. in International Conference on E-Commerce 2003 (5), 24 – 27