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LBS & tourism through the eyes of a postgrad marketing student in New Zealand.

Tuesday, March 15, 2005

The paradoxes of mobile commerce

Re-reading my two previous posts, I realised that they may be a bit confusing because I've been mixing methods without explanation - first I said that tourists could book and pay for their hotels at the same time; then I said that the anonymous nature of Octopus cards as a form of contactless payment may appeal to many.

Basically I'm talking about two entirely different uses of mobile payment. Also, hotels are not a good example because you usually don't pay until afterwards, seeing as they need to check whether you raided the mini-bar or not. So here's a different example - say you want to buy tickets for the Skytower (a popular Auckland tourist attraction).

1) You can remotely pre-purchase a ticket via your Timespot-like device from anywhere in Auckland (or even New Zealand), whereby the ticket price will be added from your credit card account. When you arrive at the Skytower, just show them the electronic ticket or receipt on your device, and you're good to go.

or 2) With an Octopus card chip embedded in the device, instead of paying cash or credit card when you get to the counter, just flash the Timespot in the appropriate place and you're issued a ticket.

While both do away with cash, the first is really more applicable to adding value to a Timespot device and tourism in general. The second option is just another form of payment aimed at enhancing speed and convenience, hence why it was first implemented in public transport in Hong Kong. You could conceivably have both in the same device, but that may confuse the issue here. In fact, I'm getting a little confused myself...

Basically, while I think it would be fantastic to embed Octopus card chips in mobiles to enable that type of contactless payment (which is much more user-friendly than the SMS type), it's a whole different kettle of fish, and will probably be a lot more difficult to implement because of the hardware and retailer-adoption requirements. Even in Hong Kong, Octopus cards are still mainly used for public transport and other small purchases such as from vending machines - people still use cash or debit/credit cards to buy clothes, and this is unlikely to change in the meantime.

While it does mean additional fees for going through the mobile carrier, as well as reduced user-friendliness, Timespot-wannabes will be better off concentrating on the (1) form of payment for practical implementation reasons. Also, the fact that the carrier profits is not necessarily a bad thing - at least then they will have the motivation to cooperate in these types of ventures!

In the end, it's impossible to have anonymity and mobile marketing simultaneously, because as a marketer, first you have to obtain their permission (therefore they lose anonymity) . If you haven't got permission, then you're (surprise, surprise) spamming! Fortunately, most people will happily give you permission if they think you have something relevant and valuable to offer them - for tourists, I'd imagine that a user-friendly, reasonably-priced Timespot device will be very difficult to resist indeed...

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