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M-commerce to be $25bn market by 2006

Electronic commerce conducted via mobile devices such as phones and PDAs will take off over the next few years to become a $25bn (£17.bn) market worldwide by 2006, according to a study by Frost & Sullivan.

By that time, m-commerce will account for 15% of the world's online commerce, according to a summary of the study.

According to Frost & Sullivan, several different market sectors will make up m-commerce, including:

  • automated point-of-sale payments (vending machines, parking meters and ticket machines)


  • attended point-of-sale payments (shop counters, taxis)


  • mobile-accessed Internet payments (merchant WAP sites)


  • mobile-assisted Internet payments (fixed Internet sites using phone instead of credit card)


  • peer-to-peer payments between individuals.


Of these, mobile-assisted Internet payments will account for 39% of m-commerce spending, and peer-to-peer payments between individuals will account for 34%, the company said.

The benefits of m-commerce to consumers include convenience for booking and paying for tickets, and managing stock trading or financial transactions. Benefits for merchants and banks include reducing fraud and cash-handling costs, and an estimated 20% increase in sales caused by customers being able to make payments more easily and conveniently.

Consumers, merchants and banks all benefit from the increased security of mobile phone-based transactions compared with online credit card payments, which remain a concern to many potential e-commerce consumers, according to the study.

M-commerce, offers significant market opportunities for network operators, banks, credit card associations, manufacturers and many startups looking to claim a stake in the payment market, Frost & Sullivan said.

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