Business News

Business News NEWSROOM

Using Technology to do Everyday Shopping (In the News)

Oct. 26, 2005

By Katherine Heine

Palm Beach Post-Cox News Service

Thursday, October 06, 2005

A secretary's thorough pocket-fishing produces two pennies and a nickel, not nearly enough change for a vending-machine purchase to satisfy her midday munchies. She removes her cellphone from her purse as if to call a friend to bring her an extra 55 cents; instead, she points her phone at the vending machine. Beep, beep, beep, and voila, a Snickers bar tumbles down.

Don't worry, she didn't cheat the system. Food — 60 cents will show up on her next cellphone bill.

Mobile technology insiders and tech-savvy consumers have been ordering pizza, feeding parking meters and making credit-card payments with a few taps on their keypads since early 2001. In fact, nearly 95 million worldwide cellphone users made purchases via their mobile in 2003, according to a 2004 Telecom Trends International study.

But the wireless world of mobile commerce is making its way into the homes of mainstream moms and the workplaces of average Joes. Telecom Trends projects that by 2008, 2 billion people will be using cellphones to access the Internet for purchases.

"M-commerce is not just e-commerce gone mobile — it's much more — and it will become a serious part of the global economy," Susan Welsh de Grimaldo, author of the worldwide study, told Cellular Online. "Since people carry their cellphones everywhere, cellphones will eventually start to replace wallets as a place to store credit cards, frequent shopper cards and even family photos."

Sue Jackson, spokeswoman for Waco's Automatic Chef and Canteen, which services area vending machines, said the option to purchase goods and services with a cellphone is news to her. Area vending machines are not compatible for wireless transactions, she said.

"I just got the new merchandising magazine, and it didn't have anything in there about that, but it doesn't surprise me with all the new technology out there," Jackson said. "I bet the younger generation is going to jump on it in a heartbeat, but we older folks will still buy stuff the traditional way with change."

Motorola and Verizon Wireless teamed up with Domino's Pizza in 2001 to launch one of the nation's first trials of m-commerce in Las Vegas. Consumers participating in Pizzacast went online to create user profiles consisting of their names, one or more delivery addresses, payment information and custom orders to limit phone key strokes, such as "Dad's combo," an order for a large pepperoni, sausage and extra cheese pizza.

In June, Coral Gables became the nation's first city to employ the use of cellphone technology to feed parking meters.

CellPark, a payment method crafted by Canadian-based Mint Inc., allows drivers to dial the number assigned to each parking spot to activate charges. The charges cease once the driver calls again to log off. The meter fee, with the addition of a 25-cent usage fee, will show up on the driver's next credit card bill. Participants set up the service and payment information ahead of time.

"The program is going great. We started in June with 200 subscribers, and now we have 2-3,000," said Marie Rosa Higgins Fallon, the city's public affairs manager. "We have gotten great response from the public. If they are in a meeting, they don't have to go down to their car to put more money in the meter."

American companies funding m-commerce trials have reported positive feedback from consumers.

The benefits are obvious: being able to make quick transactions from anywhere and customizing repeat purchases.

But the number of businesses and banks equipped to deal with mobile wireless transactions is limited because of the relative newness of the technology in the States. And the technology used to convert Internet pages into user-friendly images on a cellphone screen is still being worked on.

While the technology is in its infant stages in the United States, it has flourished in other parts of the world. More than 3 million wireless subscribers in Japan are using a mobile wallet service to purchase items at 20,000 stores and vending machines, and as many as 100 new m-commerce companies launch in Europe every month, according to Time Europe magazine.

"If wireless Internet is hot, then Europe is on fire," Falk Muller-Veerse, head of European research activities at Durlacher, a research and investment group, told Time Europe. "While e-commerce is clearly run from Silicon Valley, mobile Internet commerce is being run by the wireless valley here in Europe."

J. William Petty, professor of finance at Baylor University, said that even though there might be some hesitancy to use the technology, it is only a matter of time before cell phones become the key instrument to controlling our lives in the United States.

"My sense is that cell phone technology is absolutely going to take over," Petty said. "And just like I still don't understand why people text message instead of talking to the person, people will be drawn in by the new technology and grow accustomed to it."

Petty said he thinks people would likely pay a small user fee, similar to 10 or 20 cent text messaging fees, for the convenience.

But some industry analysts have voiced concerns about identity theft and transaction glitches. Credit card companies are working with cell phone and wireless providers to ensure security. In conjunction with 15 cell phone providers, Visa International launched its 3-D Mobile Secure technology in late 2001 to extend payment authentication measures to mobile communications.

Cell phones might replace more than credit and debit cards — they also have the ability to supplant checkbooks, Web sites and computer programs similar to Quicken and such online bill payment sites as PayPal or CheckFree.

Border Title