Haiti Donations: A Turning Point in Mobile Commerce?
The $7 million raised by the American Red Cross in the first two days after the earthquake and collected via text messaging shows the public has turned a corner with mobile commerce, analysts say. One lesson: Simpler mobile commerce technology is better.
CIO — Only two days after a 7.0-magnitude earthquake leveled the capital city of Port-au-Prince, Haiti, the American Red Cross raised $7 million via text messaging from more than 700,000 wireless customers. Donations poured in from every wireless network, including AT&T, Verizon (VZ), Sprint (S) and T-Mobile.
Red Cross' relief efforts in Haiti signaled a turning point in the history of mobile commerce. "It was a major validation about the possibilities of text and mobile commerce and what we're going to see in the future," says Gartner (IT) analyst Jeff Roster.
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Consumers have been slowly warming to the idea of zapping money through the air for years, from mobile banking to online shopping to purchasing mobile apps themselves. In fact, some analysts say that this year will be the year of the start of a mobile commerce tidal wave. Gartner predicts mobile app revenue will hit $6.7 billion this year, up from $4.2 billion last year, and the trend will continue to almost $30 billion in 2013.
Gartner's top 10 mobile consumer app areas for 2012 are: money transfer, location-based services, mobile search, mobile browsing, mobile health monitoring, mobile payment, near-field communication services, mobile advertising, mobile instant messaging, and mobile music. Two of these top ten app areas—money transfer and mobile payment—directly relate to mobile commerce.
SMS Succeeds Where WAP Floundered
For years, analysts have been waiting for mobile commerce to take off only to see it stumble.
The first false start came in the late 1990's when the wireless application protocol (WAP) arrived on the mobile market scene. Banks launched online banking websites as WAP sites. But WAP has been widely criticized for its lackluster capability and performance.
A few years later, banks turned to mobile applications for mobile commerce. Yet these apps were limited to a single carrier and a few phones. "It was a repeated mistake," says Diarmuid Mallon, product marketing manager at Sybase 365 mCommerce, which provides a platform for messaging and mobile commerce. "You forced people into something that was very limited.
Recent signs point to a coming of age. In the last couple of years, banks turned to less complex solutions from the user point of view, Mallon says, namely, the short messaging service protocol as the basis for transactions and alerts. The Red Cross' recent success through text payments illustrates the power of this model, he says.
