Executive Summary
Globally, advancements in information technology have seen various initiatives been developed to provide solutions to aspects in different industries. Notably, information systems have brought huge advantages to the telecommunication and financial sectors (Curtis, and Cobham, 2008). The introductions of mobile payment services have registered immense success particularly in developing countries. Mobile payment solutions and pay-by-phone are undoubtedly the newest form of alternative payment methods that will be used by consumers to pay for a range of services. These forms of payment solutions utilize technological systems in different models to facilitate transactions. These models include direct mobile billing, contactless Near Field Communication (NFC), Mobile web payments, and premium SMS payments. Near Field Communication applications have been developed and tried in various countries using the SpeedPass systems on cellphone that is used to facilitate transportation ticketing. By touching the mobile phone near an NFC reader, it initiates a transaction via a two-way conversation just like a credit card (Kasper, 2007). Mobile payment and Pay-by-phone solutions have been successful in many countries such as Japan, Kenya, South Africa, US, Switzerland, and France. Pay-by-Mobile services is likely to register success in the UK given the existing level of infrastructure, mobile service providers, and coordination with banks and credit card companies/
Role of Information Systems
Introduction
Globally, advancements in information technology have seen various initiatives been developed to provide solutions to aspects in different industries. Notably, information systems have brought huge advantages to the telecommunication and financial sectors (Curtis, and Cobham, 2008). The introductions of mobile payment services have registered immense success particularly in developing countries. This can be attributed to the increased need of microfinance services in developing countries characterized lower penetration of banking services. Large, medium, and small companies are engaging in the creation of innovative ways aimed at enabling individuals to limit their levels of carrying cash (Rainer and Turban, 2009). For instance, a good number of companies have developed credit card scanners that can be connected to cellphones to perform similar functions as credit cards. These companies include PayPal, VeriFone, Intuit, and Square. The UK is yet to taste the advantages associated with the use of Pay-by-mobile services but with infrastructural measures in place, the service will probably register success in the region.
It is evident that information systems have played a central role in the development of Vodafone mobile phone payment solutions such as the M-Pesa in Kenya and Tanzania and M-Paisa in Afghanistan. Arguably, Mobile payment solutions will gain global traction in the near future given the increased advancement and innovations in payment technologies. Different technological platforms are competing to become the most established players in mobile payment solutions (Eppler, 2003; Lindsay, 2007).
Mobile payment solutions and pay-by-phone are undoubtedly the newest form of alternative payment methods that will be used by consumers to pay for a range of services. These forms of payment solutions utilize technological systems in different models to facilitate transactions. These models include direct mobile billing, contactless Near Field Communication (NFC), Mobile web payments, and premium SMS payments. The Pay-by-Phone and mobile payment are increasingly being adopted in many parts of Europe and its entry into the UK is likely to transform the manner of undertaking transactions now that mobile phones would be used as wallets. Near Field Communication is the most ideal mobile payment mode that suits the needs of users in the UK.
Near Field Communication (NFC)
Near Field Communication applications have been developed and tried in various countries using the SpeedPass systems on cellphone that is used to facilitate transportation ticketing. By touching the mobile phone near an NFC reader, it initiates a transaction via a two-way conversation just like a credit card (Kasper, 2007). NFC communication facilitates data exchange, connections, and simplified transactions through the touch. Tablets or Smartphone devices compatible with NFC standards are built with NFC chips that perform similar functions as Radio Frequency Identification (RFID). Near Field Communication and its related standards have enabled many a customers to purchase and exchange secure information through the touch of their devices (Lambert, Miriam, and Marseken, 2009). Economic benefits have enabled companies to minimize costs associated with staffing, point of sale, and printing among others.
NBA Synergy System
The Synergy Sports Technology developed this service as a way of collecting and organizing fine-grained statistical data and in addition to providing possibilities of relating the data to related video clips. The system ensures that numerous descriptive categories are linked to high-resolution video to provide statistical information to track the games that were played. The video clips can be downloaded to iPhones, iPods, and other smartphone devices and can be shared through protected video streaming sites. This service has been useful in helping NBA coaches to analyze the strength and weaknesses of each individual player and/or opposing teams.
Mobile Banking Technology
The banking sector is one of the sectors that highly utilize the technological innovations to transact its business activities. Over the years, banking has transformed from the traditional model where clients queue for services to the current format whereby they can be reached using technological means (Ivatury, and Mas, 2008). Today, technology is a predominant determinant and indicator of the rate of growth and the level of competitiveness in the economy. In the banking sector, information systems have in different platforms such as business, connectivity, and communication. Information Technology has enabled sophisticated development of banking products, aiding financial intermediaries, and improving market infrastructures (Jessup, and Valacich, 2008).
The latest development in the banking industry is the use of mobile banking technology to facilitate banking services. Majority of banks have adopted mobile and wireless technologies into their range of services to enable clients have the freedom to access their account, pay bills, and receive updates regarding banking. M-Banking, M-Payment, M-Finance, and M-Transfer applications are examples of payment solutions that have enabled clients to manipulate transactions in their bank accounts using their mobile handsets (Taylor, and Raden, 2007). Virtually, these applications are capable of completing all services offered in the banking system.
Findings and analysis: Case Studies
M-Pesa in Kenya, Tanzania, and South Africa
M-Pesa refers to a mobile-payment and money transfer service used by Vodafone’s Kenyan affiliate, Safaricom. M-Pesa was developed under the sponsorship of the Department for International Development based in the UK to assist microfinance borrowers to get loans and repay loans using the services provided by Safaricom (Morawczynski, and Miscione, 2008). However, the system failed to deliver the intended uses with Microfinance institutions due to complications. This led the entire M-Pesa system being re-focused and developed to use another different value preposition that could see individuals transfer their remittances across the country and as well make payments for various services. Users can deposit, send, and withdraws funds through SMS and charges fees for transfers and withdrawals. The M-Pesa service has since grown into a branchless baking service that has enabled users to complete their transactions using their phones (Morawczynski, and Miscione, 2008). Transactions are done at various registered dealers and agents who are located throughout the country.
Sagentia developed the M-Pesa system but Vodafone has since made the service to be operationally controlled by IBM Global Services on its behalf. M-Pesa has transformed the manner in which users control and manage their finances since its launch in 2007. The M-Pesa service is now available in the UK to enable users to remit their funds to Kenya through the M-Pesa international money transfer solution. Vodacom, a Vodafone subsidiary in Tanzania has also launched M-Pesa services. The service has also been launched in South Africa through partnership between Vodacom and Nedbank. In Afghanistan, Vodafone entered into partnership with Roshan and launched the M-Paisa service which is similar to the M-Pesa and is used to pay salaries, disburse loans to MFI, peer-to-peer, and merchant payments.
NFC Self-Service in Zurich
Shoppers in Zurich, Switzerland are utilizing NFC-Capable smartphones supplied by Nexperts Corporation to purchase products in local markets for farmers. The project in Switzerland is called the ‘touch’ n ‘pay’ was designed to test the usefulness of the NFC interfaces in supporting shopping initiatives (Stair, and Reynolds, 2011). The farmers market was ideal for this project because they lacked an efficient credit card process to facilitate their payments. The service also allows customers to purchase products without having to be exposed to merchants or salespersons.
Cellular Network for Inventory Data by Adidas
The Adidas Group is one of world’s leaders in the supply of sporting goods and portfolio products. The group employs many workers who have to travel around the world to supply orders. One of the challenges faced by the sales is the management of inventories and order placement (Laudon, and Laudon, 2010). The salespersons used to contact the Adidas customer care to order for products or inquire about the products that were available in stock. This led to the setting up of VPNs to facilitate sales representatives to connect to the Adidas corporate network and access the levels of inventory. However, using laptops seemed too bulky for the sales representatives and therefore, the Group opted to use business applications on that utilized the Blackberry Mobile Data system and Enterprise server. The powerful sales tool facilitated transactions undertaken by the sales representatives’ thereby easing inventory management (Stair, and Reynolds, 2011).
Pay-By-Phone in the UK
Near Field Communication payments via cellphones require a great deal of adjustments in payment solutions and systems. This is common in highly developed countries that have well-established payment systems (Stair, and Reynolds, 2011). Mobile phones are slowly substituting the wallet given their abilities of linking debit or credit card accounts to mobile devices. Through joint initiatives with banks, mobile operators, and card companies, one-swipe technology is most likely going to replace the use of cards and cash to make transactions (Resatsch, 2010). Japan is already ahead whereby ‘pay-by-mobile’ payment solution is already in operation.
The Groupe Speciale Mobile Association (GSMA) is laying framework plans for Pay-by-mobile solutions. This new technology will allow users from different networks to make purchases using their smartphones. The costs of convectional calls have fallen significantly with mobile phone companies resorting to use new applications to generate more revenue streams. The reduced costs can be attributed to increased use of VoIP calls. Similarly, the use of pay-by-mobile solutions is still low in the UK given that majority of purchases are still transacted using credit cards or cash terms. This shows that the use of the ‘mobile wallet’ is likely to boost the level of these transactions given the idea that majority of individuals might prefer to carry their mobile phones as compared to carrying their mobile phones.
The NFC chips will be installed in Handsets to facilitate wireless communication within the short-range. Communication between the phone and NFC reader will initiate transactions. Access to credit card details or banks details can be stored on the Subscriber Identification Module card (Resatsch, 2010). When the phone is swiped or placed near the reader, a two-communication will ensue whereby the client might be authorized to enter PIN in order for transactions to take place. An example of a Pay-by-phone service that is likely to enter the UK market is the PayPass phone payment system by MasterCard. Majority of Mobile Service providers will utilize the range of innovativeness that comes with the use of Pay-by-mobile services. However, the realization of such visions requires a great deal of cooperation between Mobile phone manufacturers, service providers, banks, customers, and Credit Card companies.
Conclusions
Admittedly, the heart of every business is found in the utilization of modern information technology initiatives. Advancements in information technology have seen various initiatives been developed to provide solutions to aspects in different industries. The telecommunication and financial sectors are some of the sectors that are increasingly depending on Information Technology and Systems to facilitate transactions. Smartphones and Tablets are slowly substituting wallets as the primary devices for carrying cash or credit cards. Through technologies such as Near Field Communications, numerous applications have developed to utilize NFC chips to store information and facilitate transactions. These phones can be swiped near NFC readers and transactions can be undertaken through communication between mobile devices and the reader.
Pay-by-phone and mobile payment solutions have registered significant success in different regions. For instance, Mobile payments have are highly used in Kenya, Tanzania, and South Africa through the M-Pesa payment solutions. Similar services are used in Afghanistan through the M-Paisa that targets Microfinance institutions. Globally, large, medium, and small companies such as PayPal, VeriFone, Intuit, and Square are engaging in the creation of innovative ways aimed at enabling individuals to limit their levels of carrying cash. Sports companies and teams also rely on information technology solutions improve their tactics.
The UK is still characterized by increased usage of credit cards and cash terms to pay for purchases and other transactions. This shows that the use of the ‘mobile wallet’ is likely to boost the level of these transactions given the idea that majority of individuals might prefer to carry their mobile phones as compared to carrying their mobile phones. Pay-by-Mobile services are likely to register success in the UK given the existing level of infrastructure, mobile service providers, and coordination with banks and credit card companies.
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