Dial m-commerce for money

Banks, mobile operators and content providers are positioning themselves for the Internet's next big thing - m-commerce, the sale of data services via mobile phones.

The technology pieces are beginning to fall together. Today BT Cellnet took the wraps off its mobile Internet strategy, as well as outlining its plans for GPRS (General Packet Radio Service) and for the delivery of services using WAP (Wireless Application Protocol), a worldwide standard for wireless information and telephony services.

Britain's first WAP service was launched by Orange only last November but already businesses are looking to deliver more complex and sensitive services, a trend that will be accelerated by the emergence of encryption technologies for mobile services.

Baltimore last week launched the world's first product to provide encryption security between Wireless Application Protocol (WAP) phones and WAP servers. It is geared at allowing mobile networks to support financial transactions.

Revenue equals interest
Many of these technologies, which allow more complex and sensitive transactions, are getting their first public airing at the RSA conference in San Jose this week.

The reason for the interest isn't hard to find. Revenue from European m-commerce will rise to $10.8 billion, or 13 percent of mobile phone companies' revenue, by the end of 2003, from $1.2 billion, or 2 percent this year, according to market research company IDC.

According to Forrester Research 90 per of large media, retailers and banks in Europe are developing online services for mobile phones.

Content providers have been won over to the technology by the belief that with nearly 130 million European subscribers, mobile telephones, once enabled to access the Web using WAP, will rapidly gain mass market acceptance.

Service providers and phone manufacturers are actively marketing WAP to sustain handset replacement and traffic growth. But with volume shipments of WAP handsets not expected until 2001, content providers must jump-start the market.

Best of the bunch
Therese Torris, of Forrester Research, said that to succeed firms must "cherry pick services and content that fit current limitations and build on habitual use of the phone." Examples include flight information, stock brokerage and banking facilities.

Some high street banks claim that their telephone banking services are sufficient, or that they are concentrating their resources on developing Internet banking. But this attitude is changing, and many banks are expected to this year offer mobile banking services that promise to allow customers to keep track of their finances at the touch of a button.

Ulster Bank is bidding to become one of the first banks in Britain to offer customers access to their accounts via mobile phones. The bank is using an early version of WAP handsets to hook up to the Internet for the launch of the service in April.

It will initially offer recent account transactions, balances and cheque-book ordering, with more complex services being added as more sophisticated versions of the handsets become available.

"The speed at which we proceed is hugely dependent on security - initial WAP phones don't have the heavy duty requirement for more advanced services," said Ulster Bank IT manager Martin Drayne. He expects the technology to be available in three and four months' time.

"WAP technology is where the Internet was three years ago," Drayne added.

Extended banking facilities
Ulster Bank's service, which will start with the Nokia 7110 handset, will be free of charge and is an extension of the bank's Internet banking facilities which were launched just six months ago. While Ulster Bank has been relatively slow to introduce Internet banking, the new mobile phone service puts it ahead of its competitors.

In October, Woolwich offered customers a free Nokia mobile phone in return for taking part in market research on banking using WAP.

They will be able to check balances on all of their Woolwich accounts (including mortgage and unit trusts) move funds between accounts, view current and investment account statements, pay bills and issue instructions. The knowledge gathered as a result of this exercise will be used in planning the roll-out of the service to all its Open Plan customers.

M-commerce services in Scandinavia
However fully-fledged services are already up and running in Scandinavia thanks in no small part to the region's love affair with the mobile phone.

Leonia Bank, Finland's second-largest bank, is backing its new mobile banking service with what it said is the world's first implementation of digital certificates on wireless phones.

Digital certificates authenticate the identity of users and encrypt their transactions, much like personal identification number safeguards that apply to automated teller machine transaction.

The SmartTrust division of Sonera, Finland's largest mobile phone operator, and CyberTrust provided the technology, which is based on subscriber identification modules (SIMS), to Leonia Bank.

Sonera SmartTrust technology enables the use of tamper-proof digital signatures and 1024 bit RSA-algorithm for data encryption.

"Banking on mobile phones is more convenient and allows for time-critical information to be sent," said Pim Laaksonen, VP of sales and marketing at Sonera SmartTrust. "It's a lot better to use a phone because you're always carrying it with you."

Collaborators become competitors
Laaksonen added that it is working with major players in encryption and security, such as Baltimore Technologies, to create the market but conceded that its current collaborators could rapidly become competitors.

Katrina Bond, of telecoms consultancy Analysys, said that mobile banking would be accelerated by GPRS and the more widespread availability of WAP phones.

"There are already some banking services using SMS but WAP is easier to implement," said Bond.

Bond added that current close co-operation in the market could come under strain as mobile operators will look to provide better payment processing than the banking industry as services mature.