In the context of this research, payment is understood as the exchange of monetary
value between participants either directly or using an intermediary.5 Mobile payment
(mPayment) can be understood as every payment where at least one participant applies
mobile phone technology, thus, uses a mobile phone.6 But due to technological progress
it seems reasonable to classify other devices like a Personal Digital Assistant (PDA) or
devices with embedded Radio Frequency (RF) technology as mobile payment devices.7
However, mobile phones today clearly outnumber every other mobile payment device.
Penetration rates8 are forecasted to reach almost 80% in Europe by 2005.9 The number
of worldwide cellular subscribers is expected to pass one billion by 2003.10 By 2005
there will be more mobile phones worldwide than TVs, fixed line phones, and Personal
Computers (PC).11
Driven by the increasing penetration and resulting business opportunities, numerous
mPayment solutions have been offered by payment service providers, telcos, and financial institutions. The variety of applicable technologies, the possible linkage
between the financial instruments, and the mPayment device combined with different
payment scenarios offer a wide landscape of mPayment solutions. Besides technology,
questions dealing with consumer expectations, factors thriving or inhibiting a
widespread adoption, and with it related penetration strategies for payment service
providers have to be carefully researched to develop a successful mPayment.12
5 See Dahlberg/Mallat (2002) p. 651.
6 See Krueger (2001) p. 1; see IWW (2002a) p. 5; see Kreyer/Pousttchi/Turowski (2002) p. 1 f.
7 See Thing/Rouse (2001); cp. chapter 3.2.
8 Users as a percentage of the population.
9 See Barnett/Hodges/Wilshire (2000) p. 164.
10 See Barnett/Hodges/Wilshire (2000) p. 164; see Krueger (2001) p. 3; see GSM Association (2002b).
11 See Datta/Pasa/Schnitker (2001) p. 72.
12 See Dahlberg/Mallat (2002) p. 650.
Table of Contents
1 INTRODUCTION
1.1 Motivation
1.2 Goals of the study
1.3 Structure
2 TRADITIONAL AND FIXED-LINE ONLINE PAYMENT METHODS
2.1 History of payments
2.2 Traditional payment methods
2.3 Fixed-line online payment methods
2.4 Summary
3 MOBILE PAYMENT
3.1 Market and players
3.2 Mobile hardware
3.3 Connection technologies
3.3.1 Cellular network technologies
3.3.1.1 GSM
3.3.1.2 HSCSD
3.3.1.3 GPRS
3.3.1.4 EDGE
3.3.1.5 UMTS
3.3.1.6 SMS
3.3.2. Proximity technologies
3.3.2.1 Bluetooth
3.3.2.2 IR
3.3.2.3 RFID
3.3.3 Wireless Internet technologies
3.3.3.1 WAP
3.3.3.2 I-Mode
3.4 Types of mPayment
3.4.1 mPayments applying cellular network technology
3.4.1.1 mPayment linked to phone bill
3.4.1.2 mPayment linked to bank or credit card account
3.4.2 mPayments applying mobile Internet technology
3.4.2.1 Personal online payments
3.4.2.2 Micropayments
3.4.3 mPayments applying proximity technology
3.4.3.1 Single chip
3.4.3.2 Dual chip
3.4.3.3 Dual slot
3.5 Describing criteria
3.6 Summary
4 CRITICAL SUCCESS FACTORS
4.1 Contingency factors
4.2 User specific factors
4.3 Value creating factors
4.3.1 Diffusion of innovations theory
4.3.2 Technology acceptance model
4.3.3 Network externalities theory
4.3.4 Customer perceived value
4.3.5 Critical value creating success factors
4.3.5.1 Cost
4.3.5.2 Complexity
4.3.5.3 Trialability
4.3.5.4 Acceptance
4.3.5.5 Observability
4.3.5.6 Convenience
4.3.5.7 Security
4.3.5.8 Anonymity
4.3.5.9 Standard
4.4 Summary
5 APPLICATION CASES
5.1 Paybox
5.2 Speedpass
5.3 PayPal
5.4 Firstgate
5.5 Summary
6 SUMMARY AND OUTLOOK
Objectives and Topics
This thesis investigates the critical success factors for mobile payment systems by analyzing the current mPayment landscape and deriving key influential factors from theoretical models and related literature. The study focuses on B2C and C2C scenarios within the European and United States markets.
- Analysis of traditional and fixed-line online payment methods as a foundation.
- Technical classification of mPayment hardware and connection technologies (cellular, proximity, wireless Internet).
- Development of describing criteria to categorize mPayment solutions.
- Identification of critical success factors categorized into contingency, user-specific, and value-creating factors.
- Evaluation of successful application cases like Paybox, Speedpass, PayPal, and Firstgate.
Excerpt from the Book
3.3.2.1 Bluetooth
Bluetooth is a computing and telecommunications industry specification describing how different devices can establish a wireless short-range connection to exchange data. Bluetooth technology was an internal Ericsson project on wireless connectivity developed in 1995. In 1998 the Home RF Working Group (HRFWG) and the Bluetooth Special Interest Group (SIG) started to develop industry standards for an integrated voice/data home wireless network. Bluetooth uses the Industrial Scientific and Medical spectrum (ISM). It provides 79 channels, operates at 2.45 GHz, and is almost globally available. Every Bluetooth device is equipped with a low cost chip transmitting and receiving at the 2.45 GHz band. To establish a network each device owns a unique 48-bit address from the IEEE 802 standard. The network throughput is 723.2 Kbps. Bluetooth utilizes fast-frequency hopping at a rate of 1600 times per second with spread-spectrum techniques. This enables communication even in areas with heavy electromagnetic interference. Built-in encryption and verification is provided.
One advantage is that Bluetooth does not require a line of sight to communicate. The connection can be point to point or multi-point at a range of 10 meters. Disadvantages are found in the field of security. There is the possibility to “datajack” a mobile phone via Bluetooth. This allows an unauthorized third party to make phone calls via someone else’s phone. Another possibility is to record a communication between two Bluetooth devices by recording all possible 79 channels. If the intruder finds out the hopping frequency he could repeat a transaction. It is also possible to conduct a denial of service attack by jamming transmission frequencies.
Summary of Chapters
1 INTRODUCTION: Introduces the research motivation, goals, and the structure of the study regarding mobile payment systems.
2 TRADITIONAL AND FIXED-LINE ONLINE PAYMENT METHODS: Provides a historical overview and analysis of established payment systems, serving as the basis for understanding mPayment evolution.
3 MOBILE PAYMENT: Offers a comprehensive introduction to the mPayment landscape, including market players, mobile hardware, and detailed technical connection standards.
4 CRITICAL SUCCESS FACTORS: Identifies and analyzes key factors influencing the success of mPayments, ranging from external contingency factors to specific value-creating attributes.
5 APPLICATION CASES: Examines real-world mPayment solutions like Paybox and PayPal to validate theoretical findings against practical implementation.
6 SUMMARY AND OUTLOOK: Consolidates the research results and provides a perspective on future developments and further research requirements in the field of mobile payments.
Keywords
Mobile Payment, mPayment, Critical Success Factors, Mobile Commerce, Wireless Connection, Cellular Network, Proximity Technology, Bluetooth, RFID, Diffusion of Innovations, Technology Acceptance Model, Network Externalities, Customer Perceived Value, Payment Security, Electronic Cash
Frequently Asked Questions
What is the primary focus of this research paper?
The research focuses on identifying and analyzing the critical success factors that drive the widespread adoption and successful implementation of mobile payment systems in business-to-consumer and consumer-to-consumer environments.
Which thematic fields does the study cover?
The study covers the evolution of payment methods, the technical landscape of mobile devices and connection standards (cellular, proximity, and internet), and the theoretical success factors derived from academic models like the Technology Acceptance Model.
What is the core research objective?
The primary goal is to derive key factors influencing the success of mobile payment systems from theoretical models and existing literature to provide a foundational understanding for future research.
Which scientific methodology is applied?
The paper employs a structured analysis, beginning with an introduction to the landscape, followed by a review of relevant theoretical models (e.g., Diffusion of Innovations, TAM, Network Externalities), and concludes with an empirical evaluation of practical application cases.
What topics are discussed in the main body of the work?
The main body treats the market players (telcos, banks, start-ups), detailed technical infrastructures, the development of describing criteria for payment solutions, and the critical success factors such as cost, security, complexity, and convenience.
Which keywords define this work?
Key terms include mPayment, Critical Success Factors, Mobile Commerce, Network Externalities, Customer Perceived Value, and Wireless Connection technologies.
How do telcos and banks differ in their approach to mPayment services?
Banks emphasize security, risk management, and existing infrastructure, while telcos focus on their billing capabilities, large customer bases, and technical experience in wireless network management.
What role does RFID play in the future of mobile payments?
RFID is highlighted as a significant technology for physical point-of-sale environments, as it offers high speed and convenience, though it is currently more prevalent in North American retail markets than in Europe.
- Quote paper
- Christian Hort (Author), 2002, Critical Success Factors of Mobile Payments, Munich, GRIN Verlag, https://www.grin.com/document/11750
