Mobile Wallet and Cash Transaction - Assignment Example

MOBILE WALLET AND CASH TRANSACTION Mobile Wallet and Cash Transaction Customer Name: Lecturer Name: Date: Question 1(a) Utilization of mobile phones has been gaining popularity globally with Mobile phones becoming the most important communication tool worldwide. There has been a convergence of laptop computers, mobile phones and personal digital assistants towards a common personal computer tablet. Several countries have penetration levels of more than hundred percent, and this has been increasing immensely in the last decade. The mobility, connectivity, reducing size, long battery life and flexibility of mobile phones has made the phones a companion for most people. In most cases, the use of mobile phones has been limited to communication aspects of Short Message Service, voice communication, and internet access as well as some phones having computing capability. The paper, presents a paradigm shift in the utilization of mobile phones, such that the phones are also used for cash transfers, electronic purse, payment of bills, and performing all the bank transactions. Idea Description The business idea is to develop applications using mobile computing applications such as J2ME. The phone shall act as an integrated financial device where users can perform all their transactions. The Mobile Switching Centers of mobile service providers shall be connected securely with encryption to the databases of the banks, insurance providers, utility providers and major stores. The Subscriber Identity Module (SIM) or the Re-Usable Identification Module (RUIM) shall then have a menu where users can choose any service they desire. When the menu is executed such as deposit funds, the user has to make a deposit in an agents shop or transfer money from their bank accounts and the virtual cash is loaded to the phone. The subscriber can then use the money for any transactions such as purchases, bill payments and transferring to others. Deposits and transfers can also be made to the person’s number, while a person can be paid through the mobile wallet. The value added is eliminating the need to carry cash money or several ATMs, while enhancing bill payments and cash transfer. Using the business competition chain, the idea can be translated to a business proposition. For the idea to be viable and enter into the market, it has to pass through a sequence of stages. The first state is the idea generation, where the idea generated is a mobile wallet and cash transaction. This then attracts an entrepreneur who seeks capital such as finances and resources to implement the idea. The resources required include mobile computing programming capability and an established mobile phone service provider, where the services shall be mounted on. Having capital enables several persons to come together such as programmers, mobile computing security professionals, hardware specialists, financial experts and strategists. The coming up together of several people with specific roles to play creates a team, and the availability of capital is the enabling foundation. Together the team can ensure that the idea is implemented in the market. Since there are other electronic transaction systems, the mobile phone based financial transactions idea has to compete with the existing technologies and methodologies in the market (Al Ries & Laura, 2002). This marks the development of the mobile phone based wallet and cash transaction. Question 1(b) STEEPLE analysis is concerned with the Socio-cultural, technological, economic, ethical, political, legal, and environmental factors. The STEEPLE analysis considers the probable effects of broader factors on the mobile computing and financial sector as well as on the business idea. The STEEPLE analysis is therefore uncomplicated framework used to identify diverse factors, which may influence the Mobile phone based cash transactions. STEEPLE is the preferred analysis tool for the innovative idea since it offers comprehensive analysis while covering any eventuality, assists in providing an enhanced understanding of external conditions impacting on market growth, draws attention to a wide variety of issues such as social, political and regulatory. Furthermore, the tool considers some of the wider changes in the environment, including those outside the mobile phone computing particular market. The STEEPLE analysis on the Mobile Cash Transactions and wallet business idea, the components that make up the analysis are integrated. The socio-cultural analysis involves the analysis of Income distributions of the targeted market, in this case the users of mobile phones. The income distribution is also important considering that the users of the ideas have to have a mobile phone. Demographics, which are the characteristics of a human population is also an important consideration. Different age groups, genders and persons of different academic levels have different perceptions in issues such as the preference for the user interface of the service in the mobile equipment. Labor/Social mobility and lifestyle changes are important since the potential customers have to embrace mobile phones as a financial tool. The poverty levels also influence the success of the project. In situations where people are living from hand to mouth, they may have no money to save or to transact hence invalidating the concept of the mobile wallet Living conditions analysis involves the evaluation of the conditions of the potential users of the service. The idea involves payment of utility bills using mobile phones; therefore, if the potential clientele are living in squalid conditions, with not utilities, the idea of utility payments is challenged. Analysis of the work/life balance, serves to cement the implementation of the idea. Job security, education levels, health and welfare as well the fashions and trends impacts on the success of the idea (Douglas, 2004). The technological considerations include the evaluating the advances in the mobile phone industry. Issues to be investigated include the progression in second generation, third generation and fourth generation mobile phones such that the differences in generations do not influence the services. Other technological considerations include platform independence, differences in mobile phone makes and models, phone capabilities such as processing speed, the rate of technological obsolescence, new communication channels and the internet capability and connectivity. Other issues to be considered include integration of databases of different providers, security and encryption techniques to ensure the safety of data, speed of transmission channels to ensure interactive and instantaneous services, and the suitability of the user interface (Brouwer, 2000). Economical factors shall also be investigated to determine the economic viability of the project. In the economic perspective, factors to be investigated include the economic performance of the country of implementing the idea as well as the global economy, the government spending and personal consumption expenditure, the short term and long-term exchange rates. Other economic factors are the government monetary policy, taxation as well as the Information/knowledge economy (David, 2004). There are several environmental constructs to be considered in the analysis. Issues such as green agenda shall be investigated. Electronic transactions save on the need for paper money. Having the power to transact through the phone also reduces the need to travel, hence being environmental conscious undertaking. Other environmental issues to be investigated include the climate change and Environmental regulation/protection. Political issues determine the viability of the idea in the market in the long term. The issues include considering the stability and the viability of the political climate of a country before implementing the idea in that country. This includes investigating issues such as transparency and fairness of general election result and utilizing other methodologies such as the Lisbon strategy (Sicco, 2003). There are legal factors to be considered. Any innovations or venture, which deals with money, has to undergo numerous and several legal and regulatory requirements to ensure that they conform. The Statutory and regulatory conditions set by the central banking authority as well as those defined by the communication commission have to be satisfied. The International trade regulations as appertains to the electronic banking and monetary transactions shall be examined. The analysis shall also consider the corporate governance regulations as well as competition regulations. Considering that different countries have different laws and regulations, yet financial transactions can traverse regional and country borders, it is also important to analyze the laws of different countries concerning cross border monetary transactions and money transfer. Analysis of the Banking Act serves as a basis for defining the relationship between the entrepreneurial venture and the banks. There are several ethical constructs to be analyzed, such as the business ethics. Consent especially of the consumers is vital, since money has to be withdrawn from their accounts. Official Secrets Act is analyzed to ensure conformity and avoid revealing secretive information such as the encryption methodologies used to safeguard the data. Financial transactions are also based on trust and non-repudiation (Schumann & Thorson, 2007). This shall be considered from all perspectives as well as security access and terms of business/trade. There are several factors to be considered therefore to ensure successful STEEPLE analysis. Question two The concept of knowledge has varied definitions and understandings. In the mobile cash transaction and wallet idea, there is need to understand the data are the numerical quantities of process elements. This includes the mobile phone specific attributes such as memory capacity, storage, and type of processor, processor speed, and support for Connected Limited Device Configuration (CLDC) or Connected Device Configuration (CDC). Other data constructs include Mobile phone service providers, defined metrics of database capability, subscribers served by base transceiver stations, system intrusions, number of security flaws and compromises as well as hackings, number of banks in a place and cost of annual financial transaction. In the basic, data are meaningless unless arranged in an organized framework. Information is data endowed with purpose and relevance. There is need to understand the Information required such as the total number of mobile users that can use their mobile phones for financial transactions, the minimum system requirements of mobile phones to be supported have to have 16 or 32 bit microprocessors with at least 128 KB Random Access Memory capacity, supporting SMS service, CDMS/GSM phones. Understanding information enables offering a diversified view of the mobile transaction idea, as well as supporting the underlying factors with scientific evidences and statistical findings. The information serves a specific purpose, such as providing understanding on the technical operating environment. It is important to understand the knowledge component in the knowledge pyramid. To implement the idea, persons of varied experiences, knowledge and skills are required to derive important information from the basic data. Knowledge involves individual intuition and fluid mix of expert insight, contextual information, values and framed experience is important to offer the framework and environment for incorporating new experiences and information. The implementation of the idea requires experts’ mobile computing, security and encryption, mobile commerce, market conditions, legal constraints, database management and other professionals. Understanding the knowledge component is therefore important towards definition and sourcing of the requisite knowledge base, skills and expertise. Wisdom is the capacity to utilize previous insight, experience and knowledge to identify truth and make correct judgments. Wisdom is important in improving the quality of services offered by the business. Considering the performance of several money transfer and transaction methodologies, wisdom is important in reviewing the quality standards and the required control process. Wisdom is important in the planning of the organization and developing and sticking to the strategic plan, vision, mission and objectives of the business. Wisdom also serves in strategic marketing of the business products, such as developing strategic advantage in terms of customer care, service provision and service quality. Innovation and development of other new products and addition of more functional features to the current product also demands wisdom. Question three The concept of aware entrepreneur is the mobile cash transactions and wallet entrepreneurial venture is highlighted through comprehending the differences between Customers, consumers and market dynamics. In the venture, customers are understood to be the persons who purchase the services offered by the entrepreneurial venture. The customers may include both the end consumers and customers who shall purchase the services to sale. Consumers are the ultimate end users of the mobile cash transactions and wallet venture, they may not necessarily be customers, but the customers can source the services on their behalf. The market dynamics are the Interaction between forces of demand and supply and the pricing signals generated by the forces. This includes changes in the mobile phone markets, as well as the underlying factors influencing the markets. Furthermore, market dynamics involves the money transfer markets. Customers are the persons the entrepreneur target to purchase the services offered by the Mobile cash transactions and wallet venture. The customers shall vary, depending on the level of service provision. Banks are important customers. The venture shall offer electronic based banking services where customers can make deposits, withdraw funds, and transfer their money in the bank, without necessarily being physically present in the bank. The agents of the mobile phone service providers are also customers; since they can take cash deposits from subscribers, and deposit the funds to the subscribers’ electronic account. They also give cash to subscribers. Utility providers and sales stores are also customers who are provided the services of receiving client payments on their behalf. Subscribers of mobile phone service providers are also customers. There are several consumers of the entrepreneurial venture. These persons and organization ultimately utilize the services as the end consumer. Bank customers are consumers, since they use the service to withdraw money, check for financial statements, and make direct deposits to their bank accounts. The persons with electronic accounts, having registered with their mobile phones are also consumers, who can send and receive money. Utility companies and sales stores are also the ultimate consumers, since they utilize the service to receive payments made by customers. The service offers benefits to consumers such as simplicity of cash transacting, flexibility, convenience, security, integrated approach to managing funds using mobile phone and competitive pricing. The market dynamics involve demand and supply issues. The demand for mobile phones service has been growing, considering that in the past decade, the penetration of phone usage in most countries grew from less than 10% to over seventy percent. Therefore, most persons in the society have mobile phones; they however have other devices for financial transactions such as Automated Teller Machines, Credit and Debit cards. With the innovation, the mobile phone can serve as a communication tool and a financial tool hence utilizing the advances in the mobile phone market. Question four Communication is the pillar of an interacting method and has a broad range of promotional tools. Considering the entrepreneurial communications mix, communication is not a static stand-alone system, but rather it is a set on integrated modules aimed at creating an effective entrepreneurial campaign consistent across diverse platforms. The different promotional tools have different strengths and weaknesses, therefore to meet entrepreneurial objectives, it is important to consider the relative contribution of each component of the mix, and leveraging different elements of the mix to maximize the return on entrepreneurial investment. Communication mix is therefore an integration of several components such as personal selling, advertising, sales promotion, direct marketing and public relations. The varied approaches implement different emphasis on each element depending on the attributes of the consumers of the entrepreneurial venture, managerial style, organization size and strategic competitive strengths and weaknesses. Considering the entrepreneurial communication mix, advertising is founded on the mass-media approach, aimed at reaching the most diverse and the largest audience (Robert, 2001). Whereas advertising consumes the greatest percentage in terms of total expenditure, it is the most cost-effective promotional method with the lowest cost per unit. Advertising occurs through different mass media approaches such as billboards, TV, newspapers, telephone books, magazines and radio as well as the internet (Castells, 2003). The advertising can also be targeted for example using a person’s frequently visited web links, to offer them customized adverts depending on their likes. Personal Selling is an expensive approach in the entrepreneurial communication mix. The personal selling approach involves face-to-face communication and in most cases, suitable for the products where referral from one person to another is important. The approach is however limited in some ways, when it is impossible or impractical to achieve. In an entrepreneurial venture that targets a diverse set of customers, in different geographical locations, personal selling becomes unviable communication alternative. Sales Promotion communication approach involves the short-term activities aimed at generating quick sales such as such as giving coupons whether inserts, newspaper ads, Internet coupons and mailers. The entrepreneur can also adopt the samples approach offered in-store or through mailing. There are several ways of adopting the samples approach including rebates, two-for-one deals, free samples and first-time-free offers. Communication mix also involves direct marketing that is specifically targeted to specific audiences. The communication approach is customized to suit the intended recipient, where the entrepreneur perceives that the targeted party is of value to the business. The narrowness of direct marketing makes the approach the least attractive component in the mix. The direct marketing communication approach utilizes varied techniques such as telephone solicitations, electronic marketing and direct mail. The approach is relatively less costly due to the limited number of persons being targeted, and produces instant results but is perceived by some to be possible respondents as intrusive and bothersome. Public Relations are a component of the communications mix that the entrepreneur cannot solely control at their own discretion. Public relations offer the view of the entrepreneurial venture from the outside world. It is important in determining how the venture relates with other stakeholders. Superior public relations efforts advance community-based programs, ethical practices and socially conscious practices. Public relations communications approach is very believable and credible and reaches several many prospects missed via other forms of promotion. The relations are achieved through different forms such as events and sponsorships, news features and philanthropic actions. Cultivating good public relations communications demands several considerations by the entrepreneur including ensuring that persons have good perception of the venture. Good relations is however inexpensive, and once cultivated and internalized, it can spur the entrepreneurial venture to greater heights. Different approaches and methodologies interact to make up communication. Reference List Al Ries & Laura Ries 2002, The 22 immutable laws of branding: how to build a product or service into a world-class brand, HarperBusiness, New York. Brouwer, M., 2000, Entrepreneurship and Uncertainty: Innovation and Competition among Many. Small Business Economics. Vol. 15, pg. 149–60. Cast ells, M. 2003. The galaxy of the internet: reflections on the Internet, business, and society. London: Oxford University Press. David A. Aaker, 2004, Brand portfolio strategy: creating relevance, differentiation, energy, leverage, and clarity, Simon and Schuster, New York. Douglas B. Holt 2004, How brands become icons: the principles of cultural branding, Harvard Business Press, Harvard. Joan Schneider & Jeanne Yocum 2004, New Product Launch: 10 Proven Strategies, Stagnito Communications, Deerfield  Robert Gravlin Cooper 2001, Winning at new products: accelerating the process from idea to launch, Perseus, New York. Schumann, D.W., & Thorson, E. 2007. Internet advertising: theory and research. Michigan: Routledge. Sicco Van Gelder 2003, Global brand strategy: unlocking brand potential across countries, cultures & markets, Kogan Page Publishers, London. Read More