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Also known as m-commerce, mobile commerce is the activity of buying and selling goods and services via the use of a cellular or mobile telephone, or a smartphone. Since the advent of mobile services that include the ability to send and receive text messages, as well as access and browse the Internet, a number of businesses have developed ways to provide consumers with the chance to purchase products using their cellular service as the medium. In some cases, the purchase are charged directly to the mobile phone account, while others are managed by collecting data via text messaging, and applying the charges to a bank or credit card account.
One of the most recent innovations in mobile commerce is the ability to secure a short-term loan via texting the provider. This particular approach has become increasingly popular among the providers of payday loans in the United Kingdom and several other countries. The process involves nothing more than establishing an account with the lender, then requesting the loan via a text. If approved, the funds from the loan are deposited directly into the borrower’s bank account, and are often accessible for use immediately.
Mobile commerce is also an increasingly popular way to manage tasks such as securing tickets to a sports or entertainment event. As with the loans, the transaction is managed with the use of text messaging. For example, a user could reserve and pay for tickets to a softball game using this method, then have the tickets held at the sports stadium for pickup, dispatched via courier to a specific address, or made available for printing on a home computer later in the day.
Some vendors currently allow users to make payments on revolving accounts with the use of mobile commerce. For example, the user can connect with a credit card provider, identify the amount he or she wishes to pay, authorize the withdrawal of the payment from a specific bank account, and receive a text message confirming the transaction as soon as it is processed. In a few countries around the world, lenders also allow mobile commerce payments to be made on mortgages, car loans, and other types of debt instruments.
The idea of mobile commerce is a natural extension of the electronic commerce solutions that developed once the Internet was made widely available to consumers. Over time, the opportunities to make purchases and pay bills using a mobile device are likely to expand beyond the somewhat limited applications today. As vendors find ways to ensure the security of the transactions, mobile commerce will become a common option for conducting transactions, just as paying bills from the home computer has become the method of choice for many consumers.