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Discuss the different technologies associated with e-commerce Viz SMS, WAP, GPRS, Bluetooth.

Marks: 10M

Year: May 2013, Dec 2013

1. Introduction:

   i. M-commerce (mobile commerce) is the buying and selling of goods and services through wireless handheld devices such as cellular telephone and personal digital assistants (PDAs). Known as next-generation e-commerce, m-commerce enables users to access the Internet without needing to find a place to plug in.

   ii. While electronic commerce (e-commerce) continues to impact the global business environment profoundly, technologies and applications are beginning to focus more on mobile computing and the wireless Web.

   iii. Mobile commerce (M-commerce) can be defined as the delivery of electronic commerce capabilities directly into the consumer’s hand, anywhere, via wireless technology.

   iv. In very simple terms, one can say:

   M-commerce = E-commerce + Wireless Web

2. Technologies:

   i. GSM:- GSM (Global System for Mobile Communication) operates in the 900 MHz and the 1800 MHz (1900 MHz in the US) frequency band and is the prevailing mobile standard in Europe and most of the Asia-Pacific region. GSM is being used by more than 864 million people (end May2003). Now GSM accounts for approximately 72 percent of the total digital wireless market today. Today's GSM platform is a hugely successful wireless technology and an unprecedented story of global achievement. In less than ten years since the first GSM network was commercially launched, it became the world's leading and fastest growing mobile standard.

   ii. HSCSD:- HSCSD (High Speed Circuit Switched Data) is a circuit switched protocol based on GSM. It is able to transmit data up to 4 times the speed of the typical theoretical wireless transmission rate of 14.4 kbps (kilo bytes per second), i.e. 57.6 kbps, simply by using 4 radio channels simultaneously. The key problem in the emergence of this market is that there is currently only few manufacturers who can provide PCMCIA modem cards for HSCSD clients, which offers a transmission speed of 42.3 kbps downstream and 28.8 kbps upstream.

   iii. GPRS:- GPRS (General Packet Radio Service) is a packet switched wireless protocol that offers instant access to data networks. It will permit burst transmission speeds of up to 115 kbps (or theoretically even 171 kbps) when it is completely rolled out. The real advantage of GPRS is that it provides a connection (i.e. instant IP connectivity) between the mobile terminal and the network but the actual capacity would be consumed only when data is actually transmitted.

   iv. EDGE:- Enhanced Data Rates for Global Evolution (EDGE) is a higher bandwidth version of GPRS permitting transmission speeds of up to 384 kbps. The number of EDGE users worldwide is set to reach 331.4 million by the year 2007, according to predictions by the experts. This will achieve the delivery of advanced mobile services such as the downloading of video and music clips, full multimedia messaging, high-speed colour Internet access and e-mail on the move. It will bring about the modulation changes that will be necessary for UMTS at a later stage.

   v. 3G/UMTS:- Standing for "Universal Mobile Telecommunications System", UMTS represents an evolution in terms of services and data speeds from today's "second generation" mobile networks. As a key member of the "global family" of third generation (3G) mobile technologies identified by the ITU, UMTS is the natural evolutionary choice for operators of GSM networks, currently representing customer base of more than 850 million end users in 195 countries and representing over 70% of today's digital wireless market. Using fresh radio spectrum to support increased numbers of customers in line with industry forecasts of demand for data services over the next decade and beyond, "UMTS" is synonymous with a choice of WCDMA radio access technology that has already been selected by approaching 120licensees worldwide.

   vi. SMS:- SMS, or text messaging, is the oldest of these technologies and the most widely used. SMS messages can transmit one-way “push” notifications such as alerts, news, offers and other data from content providers to subscribers. In addition, SMS can carry binary data, so it can be the wireless delivery mechanism for downloads such as ringtones and operator logos as well as encrypted messages

   vii. WAP/MobileWeb:- Using XHTML – a variation of HTML – for mobile Web access, WAP 2.0 has been available on most feature phones since 2004. Since the launch of iPhone, most smart phones have supported browsers that support HTML.WAP 2.0 provides a mobile experience much closer to a desktop and laptop Web experience than the original WAP standards did, but it is still different enough that a WAP experience and Web experience will not be exactly the same. A WAP user experience can be close to what you get with a basic mobile app. WAP does not have access to the mobile phone’s features like an app does, but it is still a good back-up plan for users without smart phones.

   viii. Bluetooth:- Bluetooth is a wireless technology standard for exchanging data over short distances (using short-wavelength UHF radio waves in the ISM band from 2.4 to 2.485 GHz) from fixed and mobile devices, and building personal area networks (PANs).Bluetooth is managed by the Bluetooth Special Interest Group (SIG).Bluetooth is a packet-based protocol with a master-slave structure. One master may communicate with up to seven slaves in a piconet (a computer network which links a wireless user group of devices using Bluetooth technology protocols). At any given time, data can be transferred between the master and one other device. The master chooses which slave device to address; typically, it switches rapidly from one device to another in a round-robin fashion.

3. Implementation Challenges

   i. Security

   • Security is a key enabling factor in M-commerce. GSM provides a relatively secure connection through the PIN (personal Identification Number) when turning on the handset. An authentication protocol between handset and the network through SSL Encryption of voice and data is also there in GSM.
   • But it is not enough to convince people.
   • In order to get the confidence of critical mass of consumers, more is expected in the field of security.
   • It looks that the smart cards will be the preferred way of gaining access to a secure system. The smart card can be in the form of a credit card or in the form of a SIM like miniature card.
   • It is possible to run a variety of application on a single small SIM card. Encryption is being used to ensure confidentiality through a secret key in association with the algorithm.
   • This produces a scrambled version of the original message that the recipient can decrypt using the original key to retrieve the content. The key must be kept secret between the two parties.
   • There are two basic methods, which can be used to encrypt a document: symmetric and asymmetric.
   • With the symmetric method the same key is used for encryption and decryption. The problem is that the key has to be transmitted to the recipient of the message, and a third party could gain access to the key during this transmission.
   • Within symmetric encryption both parties have typically a key of 1024 2048 bits. Using asymmetric algorithm, also known as public key methods, a set of two keys is used a private and a public key.
   • Information encrypted using the public key can only be retrieved using the complementary private key.

   ii. Business:

   • A key challenge that companies will face as they build businesses for the wireless and wired age is that they will need to integrate capabilities and disciplines that are quite separate in most organizations today.
   • These include creative thinking, seasoned business skills, a deep understanding of technology and technical issues in both telecommunications and information systems, an understanding of how all this will evolve, and well-honed skills in design and branding.
   • Executives will need to begin to think now about how to assemble these skills and how to create processes for effectively coordinating them.
   • As they build these new digital businesses, executives should not underestimate what they already know.
   • The lessons learned from the many business successes and failures we have seen during the last five years on the wired Web apply to mobile businesses as well, and to the integrated wired and wireless, on-line and off-line businesses of the future. Going forward from here, the opportunities for success in m-commerce will go to those who focus on creating compelling value for customers, rooted in a deep understanding of the mobile experience, who build dynamic infra-structures for the business, and who forge business models that harvest sustainable value from the offerings and economics of the mobile Web.
   • Executives are also to think about how to tackle the changes that mobile computing will bring about in the organization. Absence of proper management can have negative effect in the performance of business and lead to failure of mobile computing as such.

4. Payment Issues:

   i. Due to the widespread use of mobile phones today, a number of payment schemes have emerged which allow the payment of services/goods from these mobile devices.

   ii. The payment cycle involves:

5. Registration
6. Transaction

7. Payment settlement

   iii. The various online payment issues are as follows:

8. Lack of standards for m-commerce between different financial institutions
9. End-to-end security issue
10. Retailer-processing centre integration problems.
11. High transaction processing capacity at the backend application processors
12. Lack of payment infrastructure