The aim of the research is to investigate the challenges of implementation of m-commerce in Bangladesh from security and legislative perspective for fulfilling the requirement of the customers to buy goods by using their mobile phones.

1.3 Objectives:

To critical review of the theory of M-Commerce, M-Banking and its related issues to find out the standard of m-commerce.

To analyse the current m-commerce situation in the country.

To evaluate and analyse the implementation challenges for m-commerce systems.

To come out with research based conclusion and recommendation to overcome the implementation challenges for m-commerce systems.

1.4 Scope

The research project will examine and identify the issues in implementation of m-commerce in the country and recommend the solutions by using the literature and the experience of the other developing and developed countries and interviewing the stakeholders of m-commerce through e-mail and telephone with an expectation of correct information from them.

The research project is concentrating only on the theoretical outcomes of implementation challenges m-commerce and not on development or implement of any technology regarding these.

1.5 Introduction

1.5.1 What is M-Commerce?

According to Shih and Shim (2002) Mobile commerce or m-commerce is the ability to conduct wireless commerce transaction using mobile device applications.

M-Commerce could be defined as the integration of mobile computing devices into business processes.(Snowden et. al, 2006). Any transaction with a financial value that is conducted via a mobile network is also referred as M-commerce. It allows the user to use the internet without using personal computer. (Mennecke & Strader, 2003). Details will be given in literature review (chapter 2).

M-commerce is a new concept for a developing country like Bangladesh. Success of m-commerce depends on how it would be presented in front of the customers. A well designed form of m-commerce and its payment system may lead to a very successful establishment of the new technology.

1.5.2 M-Banking

Mobile banking or M-banking services allow the users to fund transfers between accounts, confirmation of direct payments, check balance and stock trading with help of SMS or using GPRS via the phone’s microbrowser. (Mallat, et al. 2004). Details of m-banking will be discussed in literature review chapter.

1.5.3 M-Commerce Security

Security and data privacy is a major concern for M-commerce where security measures like encryption could be implemented to protect availability, integrity and confidentiality. (Hamad, et al. 2009). General cryptographic concepts like authentication, integrity, confidentiality and non-repudiation could be used to achieve the trust between the participants in m-commerce. (Karunanayake, et al. 2008). Details about the security will be discussed in literature review chapter.

1.6 Concluding Remarks

To know about the Implementation challenges of m-commerce system it is important to know about the theories of e-commerce and m-commerce and their security issues. The theories will be discussed in next chapter.

Chapter 2 Literature review

2.1 Introduction

2.2 E-Commerce and E-Business

2.2.1 E-commerce Framework

2.2.2 Types of E-Commerce

2.2.3 Infrastructural Issues of E-Commerce

2.2.4 Security Issues of E-Commerce

2.3 Mobile Computing

2.4 M-Commerce

2.9 M-Banking

2.10 M-Commerce in Developing Countries

2.11 Electronic Payment Methods

2.12 Mobile Payment Systems

2.13 Types of Mobile Payment Systems

2.14 Key Issues of Mobile Payment System

2.14.1 Infrastructural Issues

2.14.2 Security Issues

2.14.3 Legislative Issues

2.15 Prospect of Bangladesh in M-Commerce

2.16 Conclusion

2.1 Introduction

“Writing a faulty literature review is one of many ways to derail a dissertation” Randolph (2009). Literature review is the key part of a dissertation. In this part the author intend to bridge a connection with the theory of research.

2.2 E-commerce and E-Business

The ability to made transaction for personal or professional use over the internet is known as electronic commerce or e-commerce. (Coursaris, et al., 2003). Chaffey (2007) defined e-commerce as “The exchange of information across electronic networks, at any stage in the supply chain, whether within an organization, between businesses, between businesses and consumers or between the public and private sector, whether paid or unpaid.” E-commerce allows a flexible opportunity for the business and consumer to transact without being present in front of each other.

Though most of the cases e-commerce and e-business are used interchangeably but there is a difference between e-commerce and e-business. Adam (2003) defines e-business as “The transformation of an organization’s process to deliver additional customer value through the application of technologies, philosophies and computing paradigm of the new economy”.

Production processes, customer-focused process and internal management process are three primary processes that enhanced the e-business. (Adam, 2003)

2.2.1 E-commerce Framework

Finger (2000) categorized the e-commerce functionality into four main groupings shown in figure 2.1. He argues I-market application involves order management, trading communities, catalogue management, marketing and advertising. Customer care deals with customer relationship management, customer self service and business intelligence support. Vendor Management systems speed up the procurement processes. Extended Supply Chain Management involves collaborative forecasting, planning, scheduling and logistics.

Figure 2.1 E-commerce Functionality

Source: (Finger, 2000)

Core business processes of e-commerce are embedded in client/server, enterprise resource planning (ERP) and legacy systems.

2.2.3 Types of E-Commerce

Adam (2003) categorised e-commerce in business-to-business (B2B); business-to-consumer (B2C); business-to-government (B2G); consumer-to-consumer(C2C) and mobile commerce (m-commerce).

B2B e-commerce deals between and among the businesses.

Concept of Mobile Computing

According to Gupta (2008) “The combination of wireless communication infrastructure and portable computing devices has laid the foundation for a new network computing paradigm, called mobile computing, which allows the users access information and collaborate with others while on the move.”

Imieliński and Korth (2000) suggested that following key issues should be kept in mind while designing mobile computing devices:

Adaptability and Interoperability to the different networking environment.

Data access should be energy-efficient so that it could able to manage it with its own power.

Support mobility and disconnection.

Support for active services.

Mobile computing is the key platform for mobile commerce. Performance of mobile commerce depends on the smoothness of the mobile computing.

2.4 M-Commerce

Recent trend is to use the e-commerce technology with portable form of computing like PDAs, mobile phones, laptop computers. The e-commerce using these devices resulted in naming new trend as mobile commerce or m-commerce. (Leiner, et al., 2002).

M-Commerce could be defined as the integration of mobile computing devices into business processes.(Snowden et. al, 2006). Any transaction with a financial value that is conducted via a mobile network is also referred as M-commerce. It allows the user to use the internet without using personal computer. (Mennecke & Strader, 2003).

Early years of this decade was expected a boom on m-commerce and lot of investment was made though it could not able to reach its expected goal. (Urbaczewski, et al., 2003). The progress of m-commerce technology seams very slow during 2002 to 2008. But resent years it seems very faster due to improvement of mobile communication technologies. Using a 2.5G and 3G cell phone it is possible to run well featured m-commerce applications with higher data rates. (Okazaki, 2005 and GOI, 2008)

The business environment of e-commerce and m-commerce has a lot similarity. This is because they are involved with same functionality in terms of facilitating electronic commerce over the Internet. However they have difference in their communication mode, the devices used to access internet, development programming languages and communication protocol and their enabling technology. (Coursaris, et al., 2003)

2.4.1 Key Issues of M-Commerce

2.4.2 M-Commerce in Developing Countries

The growth of e-commerce is a bit higher in developed countries compare to that of the developing countries due to the lake of security instruments and legal frameworks, inefficient telecommunication and banking systems and higher level of illiteracy. (Mensah, et al. 2005). On the other hand opportunity of emergence of m-commerce in the developing countries is higher due to the quickness of implementation of mobile phone network infrastructure with less intense of capital investment. Moreover people are more enthusiastic to adopt mobile phone as the operators offers prepaid services without the identity or credit check. (Saidi, 2010)

According to Hu, et al. (2008) the people of the developing countries prefer to use mobile phones for communication due to high cost of computers and its internet connection charges.

Like other developing countries Bangladesh is beginning to adopt m-commerce technology where growth of mobile phone subscriber is higher. According to Bangladesh Telecommunication Regulatory Commission mobile phone users reached to 59.98 million in June 2010 which is more than 33% of total population. (BTRC, 2010).

According to Saidi (2009) the key stake holders to play a leading role in implementation of m-commerce are banks, mobile phone operators and the central bank and key issues are technical, business and policy problems.

2.5 E-Banking

In monthly report of December 2000 Deutsche Bundesbank (Deutsche Bundesbank, 2000) considered e-banking is a segment of e-commerce where banks are involved in the conduct of business transaction with the help of electronic media. Electronic channels used in this case are for both business-to-business and business-to-customer transactions.

2.5.1 Types of E-banking

E-banking could be categorised into pc banking, online banking, internet banking, telephone banking and mobile banking. (Deutsche Bundesbank, 2000 and Orbicom, 2008)

2.5.2 E-Banking Components

Kondabagil(2007) identifies following components as essential for e-banking:

Operational Processes: includes different services offered by the bank.

ICT Infrastructure: includes internal networks communication systems, servers for net-banking, storage area network(SAN), equipments like ATMs, MICR and operating systems

Applications: includes core banking system, automated decision support system, e-banking applications, intrusion detection and performance monitoring systems.

Operational aspects: includes network administration, programming support, security management, configuration management and firewall configuration and management.

Service Provider: is responsible for website design and hosting and disaster recovery services.

2.5.3 Risk Management Challenges in E-Banking

Basel Committee (2003) suggested that a number of risk management challenges are involved to implement e-banking. They are:

Due to competitive pressure the banks will have very limited time frame to implement new technology like e-banking as a result there could be lack of strategic assessment, risk analysis and security reviews.

Transaction between e-banking web sites and business applications are integrated with legacy systems which allow more straight-through processing of electronic transaction. Straight-through transaction processing may reduce human error and fraud inherent in manual processes but would increase dependences on systems design and architecture, system interoperability and operational scalability.

E-banking increases the dependences on information and communication technology as a result there is an increase of technical complexity of security and operational issues which allow the partnership with third parties where many of them are not regulated with the regulatory bodies.

As the internet is ubiquitous and global by nature, it could be accessible from anywhere in the world by unknown parties though unknown locations. So a special care should be taken in connection with security controls, data protection, customer authentication techniques, audit trails procedure and customer privacy standards.

2.6 M-Banking

2.7 Electronic Payment Methods

2.8 Mobile Payment Systems

2.9 Types of Mobile Payment Systems

2.10 Key Issues of Mobile Payment System

2.10.1 Infrastructural Issues

2.10.2 Security Issues

2.10.3 Legislative Issues

2.12 Conclusion