M-commerce or mobile commerce stands for electronic commerce made through mobile devices.

M-commerce is currently mainly used for the sale of mobile phone ring-tones and games, although as 3G/UMTS services roll out it is increasingly used to enable payment for location based services such as maps, as well as video and audio content, including full length music tracks. Other services include the sending of information such as football scores via SMS.

Currently the main payment methods used to enable m-commerce are:

• premium-rate calling numbers,
• charging to the mobile telephone user's bill or
• deducting from their calling credit, either directly or via reverse-charged SMS.

'M-commerce' was coined in the late 1990s during the dot-com boom. The idea that highly profitable M-commerce applications would be possible though the broadband mobile telephony provided by 2.5G and 3G cellphone services was one of the main reasons for hundreds of billions of dollars in licensing fees paid by European telecommunications companies for UMTS and other 3G licenses in 2000 and 2001.

Other examples of M-commerce applications are information-on-demand systems like news services or stock tickers, banking and stock brokerage applications by SMS, WAP or iMode.

Trends in Mobile Commerce:

PDA’s and cellular phones have become so popular that many businesses are beginning to use m-commerce as a more efficient method of reaching the demands of their customers. Although most trends and advances are seen overseas and in Europe, Canada and the United States are also beginning to take advantage of m-commerce. Banks and other financial services are now exploring the use of m-commerce to broaden their business by allowing their users to access information anywhere, such as bank balances, stock quotes and financial advice. Using the stock market has also become more popular with mobile brokering. Knowing the changing prices keeps buyers and sellers active in the markets. News information is also becoming more popular with subscriptions to daily headlines from anywhere in the world being transmitted to mobile devices. Sports and entertainment are areas that have also grown with the demand for mobile related services. Shopping and reservation services are now more accessible when using mobile devices. Corporations are now using m-commerce to expand everything from services to marketing and advertisement. Although there are currently very few regulations on the use and abuses of mobile commerce, this will change in the next few years. With the increased use of m-commerce comes increased security. Cell phone companies are now spending more money to protect their customers and their information from online intrusions and hackers.

Future Implications:

Financial Institutions such as Banks see mobile commerce as offering new channels of service to customers as well as offering them new and innovative products. These financial institutions are working to design and implement new applications that will offer mobile payment (ie. being able to pay for groceries) and mobile brokering. The travel industry, in realizing the possible benefits of m-commerce, is working on technologies that will take care of travel arrangements, update customers on flight status, notify them when this information changes and will offer to make new arrangements based on preset user preferences requiring no input from the user. Therefore, a customer’s entire trip can be scheduled and maintained using only their mobile device. The retail sector is also looking into the possibility of using mobile commerce for making the purchase of merchandize easier. Customers will be able to browse and order products while using a cheaper more secure payment method. An example of this is; instead of using paper catalogues, retailers can send customers a list of products that the customer would be interested in, directly to their mobile device. Additionally, retailers will also be able to track customers at all times and notify them of discounts at local stores in which that customer would be interested in. Shopping will also be easier. Soon, phones will be equipped with “bar-code scanners” and shoppers could scan an item and find out its pricing and availability. In the entertainment industry, m-commerce could be used for the purchasing of movie tickets, verify someone's ID or authorize their reservation information. This industry will also be able to promote wireless gaming and music.

Advantages of M-Commerce:

1. The benefits of M-Commerce include customer satisfaction, cost savings,and new business opportunities.

2. Use M-Commerce anytime, anywhere with the light-weighted device

3. Single owner has control over data whereas the mobile device can be highly personalized.

4. M-Commerce can bring the buyer and seller together more easily and facilitate greater profits and a closer customer relationship.

Disadvantages of M-Commerce:

1. Mobile solutions will never be as fast as a fixed connection, or have anything like the graphics or processing power of a PC.

2. Lack of Security, increasing hackers. Example Paris Hilton’s mobile got hacked

3. All the info from a PC is hard to put on a Mobile.

4. The small screen size of mobile terminals is also a major deterrent to many applications.