Will m-commerce provide the key to teen consumers?

Mobile phones technology could be adapted to give teenagers a credit service, so unlocking an elusive market.

Today’s teenagers are rarely to be found without some form of technology, typically carrying a pre-pay mobile phone with them at all times. And they use these gadgets in sophisticated ways – for example, they were early adopters of SMS text messaging.

Teens control significant purchasing power (in the UK alone, they spend more than &£20bn annually) and they are without doubt the expert consumer, having been subjected to sophisticated marketing from an early age .

But as e-commerce dominates more and more of our daily transactions, these consumers are being neglected. To complete e-commerce transactions, you need a means to instantly pay for goods and services without being physically present: a credit or debit card. In Europe, teenagers must wait until they are 18 years old before they can be considered for a credit card and be 16 before they can own a debit card.

Granted, there are various early stage initiatives currently underway in Europe and North America creating card-based financial products, such as Splash Plastic, which target teenagers. However, I believe products such as these will struggle to gain significant market penetration as they are variations on existing product themes and don’t leverage the specific benefits of interactive technologies.

My theory is that m-commerce has the potential to be this revolutionary new product. Simply, m-commerce is a commercial transaction where the payment component (at very least) is conducted through a mobile phone. For example, customers could pay for goods in a store or purchase cinema tickets through their mobile phone instead of a credit card.

The mobile phone and its sophisticated billing infrastructure is perfectly positioned to enable lower value but higher volume transactions.

The pre-pay voucher system, which currently can only be spent on airtime, is an ideal way of turning cash into digital currency for purchases up to &£100.

While the same is true for contract-based mobile phones (with the transactions simply being added to the overall bill), in the context of the teenage market it is this ability to convert cash into digital currency which has the power to capture their imagination.

M-commerce offers the potential to unlock a huge and still untapped market. First movers in this exciting area should be richly rewarded.

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