Credit card companies form m-commerce forum

If a tree falls in the woods, it does make a sound, even if there’s no one around to hear it. But if four credit card companies come together to form another m-commerce forum, does anyone in the wireless industry hear it?

Last week, American Express (www.americanexpress.com), JCB (www.jcbusa.com), MasterCard (www.mastercard.com) and Visa (www.visa.com) established the Mobile Payment Forum (www.mobilepaymentforum.org).

The goal of the forum is to develop standards for secure mobile payments via card transactions and to address m-commerce issues such as interoperability, passwords, cardholder authentication and encryption methods.

According to Joe Chouinard, Visa vice president of new e-commerce channels, the forum will act as a bridge between the mobile and financial industries. Any organization interested in secure card-based m-commerce transactions can join the forum, including banks, carriers, merchants and software developers. Chouinard is co-president of the forum, along with Simon Pugh, MasterCard vice president of infrastructure standards and alliances.

Pugh said that given the economic climate, m-commerce has reached a plateau and has moved into replacement business rather than market-share growth.

“We see it as the correct time when a degree of realization and pragmatism is rife within the market to try to establish an open standardization group focusing on building the framework for mobile commerce and mobile payment transactions,” Pugh said.

M-commerce, an industry buzzword in 2000 and earlier 2001, hasn’t faired well recently. 2001’s economy sent some m-commerce companies into bankruptcy. Early m-commerce forecasts predicted widespread adoption and have yet to prove true. According to Gartner, m-commerce has come down from inflated expectations into a “trough of disillusionment,” where it will eventually climb out of and reach productivity in five to 10 years.

Adam Zawel, Yankee Group (www.yankeegroup.com) program manager for mobile commerce, said that m-commerce “was an over-hyped opportunity, but it’s still generally recognized as something that is going to come around in a big way.”

Other m-commerce forum exist and are typically controlled by a group of companies, such as banks or device manufacturers, that have a particular agenda, Zawel said. The strength of the Mobile Payment Forum is that it brings together the major competing credit card companies.

“Right from the start, they’re talking about engaging the other parties,” he said. “The question is will that materialize, will they really be able to engage all the necessary parties to enable this opportunity.”

Zawel won’t be surprised to see a major carrier or two join the forum quickly, most likely from overseas.

“The mobile commerce opportunity has manifested itself overseas first, so the more pressing need is for European and Asian carriers to get involved,” he said.

The Yankee Group projects that by 2006, m-commerce will represent approximately 2%-3% of all non-cash, electronic transactions. Fifty million m-commerce users will spend $15 billion on premium content and physical goods and services.