M-Commerce

With the proliferation of mobile phone users in Singapore, the scope for m-commerce has increased tremendously. Currently, there are three mobile phone operators—Singtel, MobileONE and Starhub. The competitive framework in which the three operators strive for market share with their innovative range of offerings has been a key factor in the high take-up rates for mobile phones as well as the affordable pricing packages. There is also a tendency among consumers to change phone sets regularly, and a propensity for the younger generation to be in the forefront of new technologies and service offerings.

The Infocommunications Development Authority (IDA) of Singapore is accelerating the growth of m-commerce by getting innovative industry players to come together as partners in various consortia in order to drive applications (http://www.ida.gov.sg). There is recognition that without this lead initiative by the regulator, it will be difficult to get the players in a segmented market who are entrenched in their own comfort zones to realize the synergies that can arise from alliances within a consortia. A multiplicity of consortia is encouraged as the diversity in the core competencies of the various players will not only fuel the development of new applications but also provide a stimulus for promoting competition between consortia in getting new services to the market place rapidly. In getting major industry players to come together, the branding afforded by established players was a key consideration. This helps to foster confidence and trust among the public.

In August 2002, IDA awarded four tenders for m-commerce operators. Each of the operators represent a consortium formed by varied business groups—for example, banks, telcos, IT firms, merchants, cinema operators, shopping malls, cab operators, and so on. Together, they would be offering a plethora of applications that can ride on the m-commerce platform—for example, payment for drinks from vending machines, payment of library fines, etc. The intent is to harness the synergy of the operators within the consortium to drive a suite of applications. Field trials involving 10,000 people are currently being held at a cost of S$20 million, with the government subsidizing 60 percent of the cost. Some examples of the applications include:

• Telepay, a service which permits shoppers at Suntec City Mall to use their mobile phones to pay for purchases at 30 shops.

• Telecab, which is a service that lets passengers in City Cab's fleet of 300 taxis to pay for their fares using their mobile phones.

In the above transactions, payment is debited by requiring the customer to key in a predetermined set of numbers on his mobile phone or by sending an SMS message. The signal is then relayed to a server in a central bank for facilitating the deduction of the requisite charges from an account maintained by the customer—typically this would be his credit card, savings account or phone account.

Other key initiatives driven by IDA to promote m-commerce include:

1. Go Virtual, which is a wireless payment platform set up by Nokia and NETS, the latter being the pioneer of the national retail payment infrastructure. Relying on the use of a Nokia 3310/3330 phone set, which has an ISO 14445 Type A contactless smart chip embedded in the chassis of the phone set, it facilitates payment when the set is fronted against a special reader in selected retail establishments. A pilot trial from April to August 2002 involved 1,000 users trying out the services at established merchant outlets such as Coffee Bean & Tea, Bossini clothing stores, and Ritz Apple Strudel shops (http://www.nets.com.sg/netslink/netslink.php?ID=7&tmplt=a&type=a).

2. DBS Mobile Payment, which is jointly set up by Nokia and Singapore's DBS Bank to effect first party and third party fund transfers using a specially configured Nokia N6310 phone set. The phone set has one Subscriber Identity Module Card and a Wireless Identity Module Identity Card. Trialed from May-July 2002, participants were the first in Asia to use wireless digital certificates and dual chip technology to effect m-commerce transactions (Liew, 2002).

3. Mobile Ticketing, which is a joint venture established in 2001 between MasterCard International and SISTIC, Singapore's largest events ticketing service provider, to support m-commerce on all WAP-enabled phone sets and Personal Digital Assistants (http://www.sistic.com.sg/wap/presscon.htm). For the consumer, this offers a hassles-free option to purchase a ticket without queuing.

4. YW8 (Why Wait), which is a consortium comprising the three mobile phone operators as well as the National Computer Systems, NETS, DBS Bank and Visa International to set up a nationwide mobile payment platform for mobile phone users (http://www.nets.com.sg/netslink/netslink.php?ID=7&tmplt=a&type=a). This obviates the need for retail establishments to maintain disparate integration systems with each phone operator. Reliant on a NETS Virtual Card system to effect e-payment, it requires the consumer to maintain up to S$200 in a virtual account with NETS. Payment can be made for any purchases at a string of merchant establishments via direct debiting of the user's bank account through the mobile phone. Trials, which started in 2001, are continuing.

Setting up of 3G networks has been completed in Singapore. Pending the availability of handsets in 2003, it is expected that m-commerce will get another boost from its deployment. The faster connection speeds and the greater bandwidth available on these phones will drive the development of more sophisticated applications on the m-commerce platform.