Mobile Services, Safety, Security, Usage

Mobile Services, Safety, Security, Usage and Acceptance:

The Perception Of Consumers

Context of the Problem

Organization of the Study

Technology Acceptance Model: The Conceptual Framework

Mobile Banking

Technology Challenges and Security Risks

Near-Field Communications: Contactless Payments

Research Model (Kim, Koo & Song, 2007)

Relationships in Conceptual Model (de Ruyter, Kleijnen & Wetzels, 2004)

Conceptual Model (Bhatti, 2007)

Model of System of Relationships Influencing Use of m-services (Drennan & Mort, 2007)

Context of the Problem

This research paper presents some of the most important findings in the use of electronic services and communication changes over the past several years. Contemporary consumers have adopted an environment of electronic communications in order to manage business and personal transactions. Electronic communications has also changed the way organizations do business. "Over the past several years, electronic commerce has become the most important new way of doing business. Electronic commerce tends not to be perceived as just another example of the alliance of business and the new information technology; instead, the cross-organizational dimension of electronic commerce gives it a distinctive character in contrast to other applications of information technology to business" (Kreindler, Maislish, & Wang, 2004, p. 59). "As global competition intensifies, an organization's effective operational performance and strategic positioning will become more dependent upon its ability to successfully exploit information technologies. Of particular importance, in this context, is the Internet, which through its high levels of connectivity, reach and adoption has already impacted upon most sectors of the economy, including defense, banking, retail, manufacturing, healthcare and education" (Doherty & Ellis-Chadwick, 2006, p. 411).

Now there is a new form of electronic commerce marketers are calling, mobile commerce (m-commerce). "Wireless technology has been proclaimed as one of the most promising innovations of the last decade, creating tremendous business opportunities via the wireless infrastructure in terms of communication, transactions, purchasing, entertainment, trading, etc." (de Ruyter, Kleijnen, & Wetzels, 2004, p. 206). Firms have invested millions of dollars designing and implementing wireless infrastructures to support the shift to m-commerce.

Frolic & Chen (2004) stated, wireless Internet has become a valuable channel through which retailers interact with potential customers. The value of m-commerce is vast as it enables businesses to create more contact points with customers and to extend business into new markets (p. 53). eBay is an example of a firm that enables customers to participate in auctions utilizing mobile devices. Neilson Company reported nine million U.S. mobile-phone subscribers say they used their mobile devices to pay for goods or services in the first quarter of 2008. Nielson surveyed 30,000 wireless subscribers monthly. Nic Covey, director of insights at Nielson Mobile stated, "As more m-commerce services become available and consumers develop a greater trust for phone-based transactions, we expect commerce to be an increasingly important part of the mobile experience next year and beyond" ("9 Million," 2008).

It is obvious that the technology works and works well, the problem is will more consumers trust handling their business and personal transactions over wireless. Consumers need proof that mobile transactions will be a safe, affordable and an efficient balance to other methods of shopping and paying bills. Secondly, are consumers truly motivated to conducting their business wirelessly or are marketers pushing mobile technology through the market? "Firms that are considering implementing m-commerce strategies need to consider the behavioral aspects of consumers' use of m-commerce. Understanding these aspects of behavior would help businesses predict customers' reactions" (Kim, Koo & Song, 2007, p. 14).

This study will investigate what it will take for consumers to accept the new technology. The investigation will also include consumer behavior and characteristics, in addition to the characteristics of the technology.

Statement of the Problem

Many firms and retailers are increasingly moving from the traditional means of servicing their customers to a paperless and mobile form of communications. Consumer technology acceptance is a critical factor to the success of m-commerce. Consumers primarily will accept various means of new technology as long as it is easy to use, requires minimal effort on their part, and reasonably priced. This paper sets out to study the viewpoint and intentions of consumers and their perceived usefulness of mobile services in their daily lives.

Research Questions

Research has shown that organizations have already begun reengineering business processes and upgrading their network infrastructures to accommodate the use of mobile services by consumers. Researchers have also stated that marketers are vastly influencing the shift to m-services. The purpose of this research proposal is to attempt to understand how the impacts of mobile commerce affect consumers' behavior? To answer this question, the following subquestions will be addressed:

What are the technology characteristics and challenges of mobile communications?

What is the consumer trustworthiness of the technology and perceived ease of use?

What role does social influence play in consumers attitudes to the use mobile services?

Significance of the Study

This study is important in the sense that the lives of consumers are quickly changing toward an increased use of cyberspace. The author of this proposal will attempt to determine the differences between age and household income of mobile services adopters. Generations X, Y, and Z (the Internet Generation), are perceived to be more opt to use m-commerce where the baby-boomer generation would prefer more traditional means of banking and buying and selling of goods. The authors' interest will focus on investigating intentions of customers who currently use mobile services, those that will continue to use the services and users who will begin using mobile services in the future.

The author will leverage the Technology Acceptance Model (TAM) to assist in answering the research questions and to develop a theoretical model. Kim, Koo & Song (2007) stated that the TAM has been widely studied and accepted as a valid model in predicting an individual's behavior across various information technologies. In TAM, two factors are primary determinants of system use - perceived ease of use and perceived usefulness (p. 15).

Marketers are promoting a positive approach to mobile services. Society has become very much aware of the go green and save the world initiatives. It has been determined that consumers can contribute to going green by eliminating paper. M-commerce is a paperless service which may influence users to adopt at a faster rate. One of the main goals of the study will focus on social influences and awareness of m-commerce.

Research Design and Methodology

The research design and methodology of this paper will focus on a qualitative and quantitative style of research. The author will apply four methods of research; focus groups, observations, surveys, and empirical data from past research studies. With the use of these research methods the author is striving to capture a sampling of behaviors and to be as objective as possible when assessing the behaviors being studied.

The focus group will include a cross-sectional study of people of several different age groups, income levels, and ethnicity. In order for the author to obtain these sample data the intended method would be the use of a controlled online focus group. Online focus groups are appropriate for consumer research, business to business research and political research (Wikipedia, 2008). Interacting over the web avoids a significant amount of travel expense. It will allow the respondents from all over the world to gather electronically for a more representative sample. Often respondents open up more online than they would in person, which is valuable to the author of this study (Wikipedia, 2008). The online focus group will be limited to 8-10 participants.

Surveys will be utilized to obtain quantitative research results. "The survey questionnaire is an inexpensive way to gather information or data; it may be the only feasible way to reach a number of research participants large enough for a statistical analysis of the survey questionnaire responses. A survey questionnaire should be viewed as a multi-stage process beginning with a definition of the aspects to be examined and ending with interpretation of the results" (Strayer DRP Guidebook, 2006, p. 18). A web survey will be made up of respondents from an e-mail request to 25-30 participants. In order to reach consumers who do not regularly utilize the Internet and email, the survey process will also include additional 25-30 participants of face-to-face interviews, telephone interviews, and written questionnaires. All survey types developed for this study will consist of the same series of questions for the purpose of gathering an accurate sampling of information from respondents.

The next research technique is gathering of data through observation. "Observational research techniques solely involve the researcher making observations. There are many positive aspects of the observational research approach. Namely, observations are usually flexible and do not necessarily need to be structured around a hypothesis" (Brown). The author will begin the research study with observation, because observing an individual(s) is time consuming and can be difficult to observe behaviors rather than attitude. The researcher will try to observe the phenomena as much as possible, but will not focus a lot of time on observation research during this study.

Finally, the researcher will review literature from past research studies written by scholarly authors who focused on consumers use of mobile commerce. Many researchers have conducted studies on many aspects of m-commerce and the use of mobile technology by consumers. deRuyter, Kleijnen, & Wetzels (2006) stated, "M-commerce has been heralded repeatedly as the new service frontier of the millennium. Present market reality, however, seems to be less optimistic, therefore, the current study explores the factors contributing to the adoption of mobile services in a context of wireless finance" (p. 206).

Organization of the Study

Chapter two will consist of the literature review of published works and research studies on the subject of mobile commerce. There are many points-of-view and definitions of m-commerce and this chapter will attempt to examine the data as it relates to what is also referred to wireless e-commerce.

Chapter three through chapter five will substantiate and provide the details of the research methodology utilized for collecting the data. The collected data will be used to answer the research questions.

The author will discuss the analyses of the research data and its results in chapter three. The analyses will focus on the technological challenges, characteristics, and quality of service of mobile commerce. Financial institutions appear to be at the forefront technically than other retailers and organizations. This chapter will analyze the development of reliable infrastructures, which is necessary to administer m-commerce consumers.

Consumer acceptance, behaviors, and trustworthiness of m-commerce are also analyzed in chapter four. M-commerce is categorized by many researchers as an extension of electronic commerce, but consumers may not view m-commerce the same. This chapter will follow the Technology Acceptance Model to determine the consumer's usefulness of m-commerce, its perceived ease of use, and perceived value; in addition to examine consumers' adoption of m-commerce.

Chapter five will explore the factors that influence consumers' behavior for using m-commerce. The author will gather and analyze demographic data to include age, gender, social status/income, race/ethnicity, and household population.

Chapter six will conclude the study by compiling the data and results gathered in the previous chapters. The author's results will offer insight into implications on why or why not adopt mobile commerce. Finally, this chapter will summarize the findings and determine if the study presented limitations and may need further research.

CHAPTER II:

REVIEW of LITERATURE

Mobile commerce, also known as m-commerce, is described as a form of electronic commerce where at least part of the transaction is conducted via a mobile device, most often with a mobile telephone (Bhatti, 2007, p.2; Mallat & Tuunainen, 2008, p.24). The term m-commerce was adopted by marketers in the late 1990s, and predictions were made of rapid growth in the volume of commerce conducted through mobile devices (Clarke, 2008, p.63). Bhatti's study (2007) assumed mobile commerce applications are becoming an important area of electronic commerce generating substantial profits. Rapidly developing technology capabilities and mobile device adoptions have increasingly led to the expectations of a mobile commerce, similar in scale to the first wave of electronic commerce experienced in the late 1990s (p.2). A report from Boston Consulting Group predicted that "global m-commerce sales" would rise rapidly to $20 billion in 2001, $60 billion in 2002 and $100 billion in 2003 (Clarke, 2008, p.63).

Mention mobile commerce in North America and the common response is a roll of the eyes. it's not hard to guess why. Back in the early days of the Internet dot-com bubble, m-commerce was one of the many buzz words connected with e-commerce whose promise failed to materialize because the hype was premature. Today's landscape is much different. Several trends are helping to drive momentum for consumer purchases over mobile phones. They include the growth in mobile data services, advances in handsets and operator networks, consumer acceptance of the Internet as a purchasing and payment vehicle, and growing consumer interest in mobile banking" (Vyas, 2008, p.14).

Technology Acceptance Model: The Conceptual Framework

In the Information Systems (IS) field, the importance of technology acceptance as the precursor to the use of technology has attracted much attention (Kim, Koo & Song, 2007, p.15). The TAM model proposes that beliefs about usefulness and ease-of-use of a new system are essential elements in determining a user's attitude to using a technology (Bhatti, 2007, p.2; de Ruyter, Kleijnen & Wetzels, 2004, p.207; Kim, Koo & Song, 2007, p.15). TAM is based upon, and has been compared with, the theory of reasoned action and the theory of planned behavior. TAM has been applied to different technologies' acceptance such as voice mail, e-mail, micro-computer, Word, Excel, data systems, and information retrieval (Kim, Koo & Song, 2007, p.16). It has been argued that TAM is an appropriate theory to use in m-commerce contexts as well. It was argued that predicting users' behavior in a wireless context would be similar to that of an e-commerce context (Kim, Koo & Song, 2007, p.16).

A de Ruyter, Kleijnen & Wetzels (2004) studied perceived costs, perceived system quality and social influence had been incorporated as antecedents considering the relevance of these constructs for mobile service adoption, plus several moderating variables were included. Many researchers thought was mobile services can be accessed at any time, no matter where the consumer is, in a social as well as a business context (de Ruyter, Kleijnen & Wetzels, 2004, p.207). Mobile services are important for firms and consumers because of ubiquitous, universal, and unison access to information and services, and the possibility for unique and personalized exchange of information (Bhatti, 2007, p.2-3; Clarke, 2008, p.64; Mallat & Tuunainen, 2008, p.26). Ubiquitous connectivity changes the way smartphones are used, because a network connection is always available, there is no need to store sensitive personal information or corporate databases on smartphones -- "the information may be retrieved whenever necessary (Disabato, 2008, p.9). Based on the TAM explanation that perceived ease of use and perceived usefulness determined intention to use:

H1: Perceived usefulness of m-commerce has a positive effect on the intention to use m-commerce.

H2: Perceived ease of use of m-commerce has a positive effect on the intention to use m-commerce.

Likewise, based on the TAM explanation that perceived ease of use positively influences perceived usefulness (for a wide variety of technologies), we hypothesize that:

H3: Perceived ease of use of m-commerce has a positive effect on the perceived usefulness of m-commerce.

H4: Perceived enjoyment has a positive effect on perceived ease of use.

H5: Perceived enjoyment has a positive effect on the intention to use m-commerce.

H6: Perceived usefulness of m-commerce has a positive effect on positive word-of-mouth about m-commerce.

H7: Perceived ease of use of m-commerce has a positive effect on positive word-of-mouth about m-commerce.

H8: Perceived enjoyment of m-commerce has a positive effect on positive word-of-mouth about m-commerce.

H9: Positive word-of-mouth about m-commerce has a positive effect on the intention to use m-commerce (Kim, Koo & Song, 2007, p.16-20).

Research Model (Kim, Koo & Song, 2007)

While perceived usefulness in the original TAM model strongly focuses on the extent to which a system adds to the consumer's job performance, de Ruyter, Kleijnen & Wetzels (2004) provided the current context to their research with a broader perspective (p.207). Since mobile services can be available at any time, it refers to this phenomenon as the mobile lifestyle. Perceived usefulness is defined as how well consumers believe mobile services can be integrated into their daily activities hypothesized:

H1: attitude to using mobile services has a direct, positive effect on the intention to use mobile services

H2: perceived usefulness of mobile services has a direct, positive effect on the intention to use mobile services

H3: perceived usefulness of mobile services has a direct, positive effect on the attitude to using mobile services

H4: Perceived ease of use has a direct, positive effect on the attitude to using mobile services

H5: Perceived ease of use has a direct, positive effect on the perceived usefulness of mobile services

H6: Perceived costs have a direct, negative effect on the attitude to using mobile services

H7: Perceived system quality has a direct, positive effect on the attitude to using mobile services

H8a: Social influence has a direct, positive effect on the intention to use mobile services

H8b: As social influence is greater, the relationship between attitude and intention to use mobile services will be attenuated

H9: As consumers become older, the positive relationship between perceived usefulness and attitude is strengthened the positive relationship between perceived ease of use and attitude is strengthened the negative relationship between perceived costs and attitude is strengthened the positive relationship between perceived system quality and attitude is strengthened

H10: As consumers become more experienced, the positive relationship between perceived ease of use and attitude is attenuated

H11: As consumers express higher mobile technology readiness the positive relationship between perceived usefulness and attitude is attenuated the positive relationship between perceived ease of use and attitude is attenuated the negative relationship between perceived costs and attitude is attenuated the positive relationship between perceived system quality and attitude is attenuated the positive relationship between attitude and intention to use is attenuated (de Ruyter, Kleijnen & Wetzels, 2004, p.207).

Relationships in Conceptual Model (de Ruyter, Kleijnen & Wetzels, 2004)

Prior studies have extended TAM with constructs such as perceived playfulness, perceived enjoyment and others. It is widely recognized that subjective norms and perceived behavioral control are important for understanding and predicting intentions and behavior in specific contexts. Bhatti elaborated on the rationale for the constructs to be included in his research model and the hypothesized relationship among these constructs:

H1: Subjective norm positively affects perceived usefulness.

H2: Subjective norm positively affects perceived ease of use.

H3: Subjective norm positively affects behavioral intention to adopt mobile commerce.

H4: Personal innovativeness positively affects perceived usefulness.

H5: Personal innovativeness positively affects perceived ease of use.

H6: Perceived usefulness positively affects the intention of users to adopt mobile commerce.

H7: Perceived ease of use has a positive effect on the intention to use mobile commerce.

H8: Perceived Behavioral Control positively affects perceived ease of use.

H9: Perceived Behavioral Control positively affects behavioral intention to adopt mobile commerce (Bhatti, 2007, p. 5-6)

Conceptual Model (Bhatti, 2007)

The research study conducted by Drennan & Mort (2007) took a holistic approach and examined the factors that influence consumers' use of m-services and not merely m-commerce. They defined m-services as enhanced information services accessed while mobile. Marketing communications, specifically advertising, can be delivered as an m-service (p.302). Consumers already use mobile devices (cell phones, personal mobile digital assistants) for traditional phone calls and message handling. The combination of rapidly developing mobile digital technology and high uptake rates of mobile devices presents enormous potential for delivery of m-services through these devices. M-services encompass a wide variety of types including the ability to trade stock, to book theater and movie tickets while accessing seating plans online, to send and receive text and pictures, and receive personalized direct advertising such as alerts for shopping bargains (Drennan & Mort, 2007, p.303). Drennan & Mort hypothesized the following research study constructs:

H1: Perceived utilitarianism of mobile phones will be positively related to mobile phone purchase involvement.

H2: Perceived utilitarianism of mobile phones will be positively related to mobile phone product involvement.

H3: Perceived hedonism of mobile phones will be positively related to mobile phone purchase involvement.

H4: Perceived hedonism of mobile phones will be positively related to mobile phone product involvement.

H5: Mobile phone purchase involvement will be positively related to use of m-services.

H6: Mobile phone product involvement will be positively related to use of m-services.

H7: Innovativeness will be positively related to use of m-services.

H8: Self-efficacy will be positively related to use of m-services (Drennan & Mort, 2007, p.303).

Model of System of Relationships Influencing Use of m-services (Drennan & Mort, 2007)

Mobile Banking

With the use of wireless communications the two applications gaining the most momentum are mobile commerce and mobile finance. One of the first commercial applications of mobile commerce was mobile banking (Reddy, Routray & Sherry, 2008, p.1).

Technology Challenges and Security Risks

To make mobile banking applications a success bandwidth management is an important issue. The increased flexibility and mobility feature of wireless ATM and its bandwidth on demand function is motivating a large number of carries towards deployment of the wireless ATM networks (Reddy, Routray & Sherry, 2008, p.1).

Not only are there limitations with bandwidth and network reliability, the currently dominant mobile technologies have limitations which place demands on payment system design and may restrict their use in certain transactions. These limitations include the small size of screens and keyboards, limited battery life, limited processing power and memory (Mallat & Tuunainen, 2008, p.28).

The increasing functionality and number of mobile banking platforms, the growing sophistication of criminals, and the popularity of smart cell phones create the potential for mobile banking security issues, but industry watchers have widely divergent opinions about how serious the threat really is ("Mobile security," 2008).

Nielsen Mobile (2008) reported commerce over mobile devices such as cell phones is accelerating in the United States. As of the first quarter of 2008, 3.6% (9.2 million) of U.S. mobile subscribers use their phone to pay for goods or services - Men are more likely than women to use their phone for commerce, adults ages 25-34 are the most likely to have made a purchase using their phone, and 49% of mobile data users who have used one or more data features on their phone say that it is likely they will conduct mobile commerce in the future (Parry, 2008, p.1). Parry (2008) continue Nielsen's study also revealed that security is the number one concern among those mobile data users that are not yet participating in m-commerce - 41% of data users who do not participate in mobile commerce say security is their biggest concern (p.1). "U.S. consumers need proof that mobile transactions will be a safe, affordable and efficient complement to other modes of shopping," said Nic Covey, director of Insights at Nielsen Mobile. "As long as retailers continue to meet those expectations, more consumers will come to view mobile shopping as a compelling and viable option" (Parry, 2008, p.1).

A recent study conducted by Javelin Strategy & Research assessed the main obstacles to mobile banking adoption, which indicated that consumers regard security as the main concern which prevents them from engaging in mobile transactions ("Consumers fear," 2008). The Javelin study also shows that in the U.S., out of the 30 million potential mobile banking users, a very small percentage have actually signed up for the serve, with 47% of non-participants being kept at bay by security issues ("Consumers fear," 2008).

Clarke (2008) stated many authors have considered mobile payments from a technical perspective, but far less attention has been paid to practical application, security aspects, and acceptability by the users of mobile devices. In a survey of papers published in the Information Systems literature between January 2000 and September 2004, found only 4 of 253 articles addressed security (p.65).

Near-Field Communications: Contactless Payments

According to Vyas (2008) study, "One of the most exciting aspects of mobile commerce involves enabling consumers to use a handset to purchase goods at the physical point of sale. While commerce utilizing near-field communication in this manner holds great potential and trials continued globally, the underdeveloped ecosystem support near-field communications payments will prevent real uptake in this space in 2008 in the U.S. market" (p.14). A report from Juniper said the mobile market today is dominated by digital goods purchases such as ring-tones, music, games and infotainment, but near-field communications, money transfers and physical goods purchases via mobile devices will represent new opportunities for the mobile payments market ("Mobile Payments," 2008; Mallat & Tuunainen, 2008, p.1).

The immediate ancestor of near-field communication is the radio-frequency identification (RFID), short-range, contactless technology that is use for transport, payments and other applications (Birch, 2007, p.55). Birch's study revealed that this kind of contactless technology is generally known as 'proximity' technology and is well established, standardized (as ISO 14443) and widely used around the world and is the basis for the next generation of retail electronic payment technology, as there are more than 20 million contactless payment cards in circulation in the U.S. already (pp.55-56).

The work of Paul DeBeasi (2009) entitled: "Trends in Mobile Computing" states that enterprise mobility is driven "by the need for seamless access to information anytime, anywhere and from any device. However, mobility has far-reaching effects on the enterprise in areas such as security risk, use policies, manageability and governance." Elderly individuals are a user group in design of mobile devices that have been effectively neglected according to the study reported in the work of Mallenius, Rossi and Tuunainen entitled: "Factors Affecting the adoption and use of Mobile devices and Services by Elderly People - Results from a Pilot Study." This report states that age "as a concept is relative and open to various interpretations, and physical age does not always correlate with the feeling how old a person thinks he or she is." (nd) Social scientists posit that four types of aging exist including those as follows:

1) Functional age; pertains to senses, appearance, activity, body functions;

2) Historical age; accounts for a person's relation to a specific cultural event

3) Social age; accounts for a society's rites of passage

4) Societal age; investigates ageism, the specific culture's perception of aging that the individual. (Mallenius, Rossi and Tuunainenk. Nd)

Findings in the report of the study of Mallenius, Rossi and Tuunainen state that there was a "...clear consensus among the interviewees that elderly people are interested in using mobile phones and services, but these services need to deliver real value for them." (nd) the actual value is derived on "from extended possibilities to communicate with relatives and other reference groups...and...from critical services, such as emergency and health information services, as well as municipal services, such as reminders of doctor's appointments and book returns to library. All these services together can provide real benefits for the elderly, in form of more social, active and meaningful life, as well as in allowing them to live independent life longer." (Mallenius, Rossi and Tuunainen, nd) Stated as the major shortcomings of the current mobile devices and services were "the ease of use, and for non-technically-oriented person incomprehensible manuals and instructions. Furthermore, some physical limitations, such as the small keys and the limited size of the screen were seen as severe limiting factors for the usage of mobile devices by the elderly. Lack of clear pricing models for most current services was also considered a barrier to adoption by many of the interviewees." (Mallenius, Rossi and Tuunainen, nd)