Location-Based Services in Mobile Commerce at MWC’11
Convergence between location-based services and mobile commerce was gaining momentum at the Mobile World Congress this year, but as of yet present in few ready solutions.

A key topic at the conference was the overall convergence of services into mobile devices. This featured central roles in the visions of industry leaders such as Google’s Eric Schmidt and Nokia’s Stephen Elop, who discussed the ongoing convergence of fields such as search, location based services, commerce, and advertising. This change is underway, but still at its infancy. For instance apps featuring location based services are increasingly being integrated with mobile commerce. Over the next few years a primary driver of this convergence will be Near Field Communication (NFC), which bridges the online and offline worlds.

An excellent example of the enhanced user convenience that can be obtained by integrating mobile payments with location-based services is the Uber application. Uber enables users to order a taxi using an app on their iPhone or Android device, with the phone suggesting a pick-up spot on the map, which further can be adjusted by the user. The user is notified when the order is accepted, as well as when the cab has arrived. As the application is linked to the customer’s credit or debit card, there is no need to deal with cash or card payments during the trip.

Other companies that have realized the true potential of the mobile phone as a channel for commerce include Starbucks, Pizza Hut, and Western Union. These companies have all been pioneers in integrating location based features with mobile commerce and smartphone functionality. Western Union demonstrated a forthcoming iPhone app at the congress. Using the application remittances can be sent internationally, and Western Union agents can be located. The comfort and convenience proposition to consumers is remarkable, as remittance senders can choose the receiver from a list of favourites, relieving them from the process of filling in the paper application. Combined with Western Unions goCASH prepaid value cards that are available for purchase at retailers, this proposition is viable even for users without access to credit or debit cards.

The interest that the industry showed in NFC during the congress surpassed expectations. The NFC conference session at the Mobile World Congress was held twice in a row on Thursday the 16th – to fully packed audiences both times – as the number of attendees by far exceeded the auditorium’s capacity. At the show countless technology provides were showcasing nearly identical NFC mobile payment demos featuring POS terminals and Smartphone’s. However, the added value users can obtain through NFC – apart from the tap-and-go experience – remained largely absent from presentations. Next year we are likely to see more consumer-oriented value propositions, such as personal finance applications and NFC-empowered advertising solutions, as well as location-based services more tightly integrated with search and marketing.

Lars Kurkinen

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