Mobilizing e-commerce: Start-ups pave way with wireless banking platforms

Mobile e-commerce one day will be the hottest sector in the wireless galaxy, but product announcements at Wireless 2000 last week indicated that the industry is still at least three years away from being a mass market. For example, a forecast by Strategy Analytics said mobile transactions will reach 14 billion and a value of $200 billion, but not until 2005.

In the meantime, discussions are occurring about how that pie will be divided between e-tailers and carriers. Carriers know money is to be made in addition to the increase in data flow through their networks. But they still are struggling to find the right spots to add value and determining what type of relationships to form with branded e-tailers such as Amazon.com, which could represent a threat to a carrier's customer ownership.

"There will be layers of applications - but it won't be longtime surfing and data manipulation," said John Zeglis, chairman and CEO of AT&T Wireless Group. "Urgent is good, instantly useful is good and location-specific services are good. But let's not bank on one particular app being the killer."

As carriers and large e-tailers debate high-level issues, small companies of varying pedigrees are working behind the scenes to build the necessary foundation for open access mobile e-commerce, including software infrastructures and security. They're moving beyond trying to scrape data off Web sites and instead are building mobile-specific platforms for airwave commerce.

w-Trade Technologies, whose stakeholders include Deutsche Telekom, last week introduced nine new wireless application products, including commerce platforms for travel, dining and entertainment and auction providers. The customizable software templates are available in a straight license or as an application service hosted in w-Trade's two data centers. w-Trade's patent-pending technology works from a variety of hand-held devices, and wireless data networks supported include GSM, cellular digital packet data, CDMA, Mobitex and Ardis.

Just as early Internet site developers first used rudimentary development tools, such as CGI scripts, and then turned to packaged development products, so will wireless commerce providers and carriers, said Donna Oliva, CEO of w-Trade. "You do have to build it in the wireless world."

w-Trade's heritage is in wireless securities trading and banking, a market where most early wireless commerce companies are focusing. Tantau Software, a 1-year-old Austin, Texas-based company headed by the founder of Tandem Computers, announced that its Wireless Internet Platform, which uses Wireless Application Protocol gateways and is built on Hewlett-Packard hardware, is being tested by EDB Novit, a Norwegian banking application service provider (ASP).

The ASP is enabling customers at more than 30 Norwegian banks to perform account transfers, balance inquiries and bill payments using mobile devices and phones. Fifteen other enterprises, including Deutsche Bank and the New Zealand Stock Exchange, also are testing the product.

724 Solutions of North York, Ontario, Canada, is providing financial institutions with the Internet infrastructure to offer personalized and secure online banking and brokerage services across a range of devices. The company partnered with the Bank of Montreal and Bell Mobility to introduce a wireless banking and brokerage service known as Veev.

Using wireless devices, Veev customers can pay bills, request credit card advances, order checks and monitor stock portfolios. Bank of Montreal's Chicago-based subsidiary Harris Bank is running a trial of the product in the U.S. Motorola purchased a stake in 724 Solutions in late February.

Security, of course, will be a primary concern to wireless banking customers and other e-commerce customers, which is where companies such as Diversinet hope to fit in. The company's wireless security infrastructure products include digital security certificates and digital permit servers that authenticate users and allow commerce providers to issue secure tokens such as redeemable coupons. To foster acceptance of its embedded technology outside banking, Diversinet will offer free Linux software development kits through a planned Web site, said Nagy Moustafa, president of Diversinet.

But for mass market acceptance, carriers and vendors must educate customers, particularly those in the U.S., about the capabilities and time-saving benefits of having a virtual store in their pockets.

"The cell phone is a device that many people are in a strong habit of using one way. I think getting them to think that they can order products and services over their mobile device is going to take some time, in addition to building the infrastructure," said Jeff Bezos, CEO of Amazon.com.