Innovation, Industry and Institutional Dynamics in Mobile Payments
INTRODUCTION Mobile commerce (m-commerce) promises to deliver electronic commerce capabilities directly into consumers’ hands – anytime and anywhere – utilizing wireless technology. Mobile payments, referring to multiple, overlapping payment methods in mobile commerce, are important tools in m-commerce. According to the Mobile Payment Forum 1 – a global, crossindustry alliance of the leading organizations from the wireless and financial industries dedicated to advancing standardized technology and functionality for secure mobile payments – mobile payments are defined as wireless transactions of a monetary value from one party to another using a mobile device (Mobile Payment Forum, 2002). A mobile device can be a mobile phone or any wireless-enabled portable device, such as a PDA (personal digital assistant), a key ring, a contactless card 2 or a handheld computer. Various dimensions, such as payment size, location of purchase, channel of payment and time of payment can be used to characterize a mobile payment system. The concept of mobile payments emerged in the late 1990s when European mobile operators (and banks) paid a huge premium for the 3G (third-generation) mobile network spectrum licenses and were hungrily looking for ‘killer applications’ (Forrester Research, 2001). In order for mobile operators to validate their investments, mobile commerce and mobile payments were expected to revolutionize the mobile communications industry and generate substantial new income streams. At that time, the question confronting mobile operators regarding mobile payment technologies was not ‘if’, but ‘when’ and ‘how’, to launch a global mobile payment network to earn estimated transaction fees in the range of 1.5...
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