Mobile Commerce — New Experiences, Emerging Consumer Issues: Footnotes

1 In this paper, 'cellphone', 'mobile phone', and 'mobile device' are used interchangeably. (Return to Reference 1)

2 For an overview of statistics and references with respect to Canadians' ownership and use of cellphones, see Industry Canada 2006 and Industry Canada 2008. Other data also indicates that "[i]n 2008, 8.0% of households reported having cell phones only, up from 6.4% in 2007" (Statistics Canada 2009). (Return to Reference 2)

3 NFC phones offer the potential to use the mobile phone for contactless payments at point-of-sale, much like the tap-and-go functions being added to new chip-based credit cards. (Return to Reference 3)

4 The definition of mobile commerce varies across the references used in this Update; the reader is therefore advised to consult the sources for details. It is usually implicit in these definitions that mobile commerce includes transactions conducted with a mobile device but through the use of non-voice functions. (Return to Reference 4)

5 Short Message Service (SMS) is a messaging protocol that allows cellphones to send plain text-based messages of up to 136 characters to another cellphone or computer. (Return to Reference 5)

6 "Every carrier is now promoting the smartphone in Canada. Most new phones, with the exception of the most basic, are Internet ready." (CMA 2008, p. 5). (Return to Reference 6)

7 For example, "though it [mobile commerce] has gained steam in overseas markets such as Japan, where mobile devices are widely used to make payments in person and over the Internet, it has grown much more slowly in the U.S." (Regan 2008). (Return to Reference 7)

8 In 1999, NTT DoCoMo introduced a technological innovation called i-mode, which was a system of Internet-enabled mobile phones. In the following years, "DoCoMo and its competitors established a new technological platform for the internet in Japan, sparking an m-commerce revolution that is one of the most significant and successful commercial application of the internet age" (Holroyd 2005). (Return to Reference 8)

9 "The boom in data adoption is driven by availability of more functional handsets (…). The iconic Apple iPhone was the prime market mover followed quickly by a series of new devices from Canada's RIM [Research in Motion] that also made the Internet experience easier. But it took more than devices to drive adoption and usage. Canadian mobile data prices have also shifted considerably over the past thirty months." (SeaBoard Group 2009, p. 4). (Return to Reference 9)

10 The number of mobile transactions in North America is expected to grow from 34 million in 2009 to 221 million by 2012, representing an increase of 6.5 times over the period. In comparison, the number of mobile commerce transactions in Asia, while starting at higher levels (500 million in 2009), is expected to grow 4.8 times by 2012 (reported in Isensee 2009). (Return to Reference 10)

11 For example, consumers can subscribe to The Weather Network's SMS weather alert service for a monthly fee. They simply need to send a text message to the Network's SMS number, and the monthly charges are then automatically added to their cellphone bill. See (Return to Reference 11)

12 For a list of text messaging programs available in Canada, see (Return to Reference 12)

13 For example, see "Bell shop" a ringtone service that, at the time of writing, offered thousands of song clips, sound effects, and voice clips, for prices ranging from $2.50 to $4.00 each. (Return to Reference 13)

14 For example, see; at the time of writing, this was a $15 per month video-on-demand service, which also included some mobile TV content. Further, while "watching mobile TV is still considered a niche activity in North America, (…) it's growing" (LaSalle 2009a). (Return to Reference 14)

15 "Just as in the early days of the PC [personal computer] Web, where users initially experienced the on-line world through a safe portal (e.g., Yahoo, AOL, MSN) before venturing out to find interesting and relevant sites and services directly, we are now starting to see increasingly wide browsing behaviour amongst mobile users. For example, 50% of all U.S. users who can access WAP [Wireless Access Protocole] services now also browse outside of the carrier's deck (…)." (MMA 2007, pp. 1–2). (Return to Reference 15)

16 See, for example, MacRury 2008, Union des consommateurs 2009 and CBC News 2009. (Return to Reference 16)

17 Nowadays, according to a Consumers Union representative in the U.S., "many of the latest cramming scams target smart phones and other wireless devices with Internet connections" (reported in Hall 2008). (Return to Reference 17)

18 See Florida Office of the Attorney General 2009 for an example of an Assurance of Voluntary Compliance concluded with Verizon Wireless in June 2009 that includes the specifics of the guidelines. The agreement with Verizon also included a multi-million refund to consumers for ringtone services advertised as 'free'. (Return to Reference 18)

19 "The power of premium rate debt over consumers is greatly increased if the originating operator is entitled to suspend the service because of non-payment of the bill and if there is no alternative access provider. In this case the threat of service suspension is used to recover a debt for money that is due eventually to the PRSP [premium rate service provider]. If instead of leveraging the power of the originating operator, the PRSP had to use the normal legal processes for debt recovery, it would not be cost effective to recover the smaller debts and the PRSP would not be willing to go to Court in cases where it had not complied with all relevant legislation." (ECC 2006, p. 7). (Return to Reference 19)

20 Pre-paid mobile ownership typically dominates in other countries. In the U.K., for example, it is recognized that: "The original rationale for PRS [premium rate services] regulation, to protect consumers from the risk of possible disconnection if they could not pay their phone bill, has now become less relevant. By the end of 2008, 61% of mobile users (…) were on pay-as-you-go services (…). The fact that 61% of mobile users are pay-as-you-go customers gives rise to a different set of potential concerns. Pay-as-you-go customers are likely to be less aware as to how much they spend on any given PRS. They do not receive a bill (…) and they are therefore generally less able to analyse their experience and learn from it." (Ofcom 2009, p. 11). (Return to Reference 20)

21 Surveys in the U.S. indicate that teenagers are in fact closing the gap with adults when it comes to cellphone ownership (Lenhart 2009). With its even stronger cellphone-based — as opposed to computer-based — Internet culture, Japanese youth appear to be leaders in terms of actual mobile commerce usage: for example, "80 percent of e-commerce by teenagers aged 15–19 was done on cellphones in 2005" (Izumi 2006). (Return to Reference 21)

22 Note that this concern also applies with respect to cellphone bills in general and minors' sometimes expensive misunderstanding of cellphone plans (costs for use beyond the plan's limits, roaming charges, etc.). For example, see Polak 2008. (Return to Reference 22)

23 The Finland note also emphasized that "it is more difficult for a child to understand how costs accumulate when the money spent on purchases and orders is invoiced later than would be the case if cash pocket money were involved" (Finnish Consumer Ombudsman / Consumer Agency 2007). (Return to Reference 23)

24 In Canada, Telus decided in 2007 to withdraw one such program, when faced with opposition to its adult-content service (Guglielminetti 2008). (Return to Reference 24)

25 See PhonepayPlus 2008 for the U.K. Code of practice for premium rate services. (Return to Reference 25)

26 See, for example, "AT&T Smart Limits for Wireless". (Return to Reference 26)

27 See Australian Communications Authority 2005. Technical measures that have been put in place in the Australian marketplace include the use of a personal identification number (PIN) to restrict access to adult content services (noted in OECD 2007, p. 29). (Return to Reference 27)

28 See Part 5 of CWTA 2009b. (Return to Reference 28)

29 Information on this file is available at (Return to Reference 29)

30 The industry is recognized as having shifted to a new focus on cellphone programs (Cheng 2009). Research in Motion, Google, Microsoft and Nokia are among the industry players having made subsequent announcements regarding their own launch of an application store (Perez 2009). (Return to Reference 30)

31 This is significant growth from just 500 at the time of its July 2008 launch (Thangham 2008). (Return to Reference 31)

32 Smartphones powered by Google's open-source Android operating system were first introduced to Canada in June 2009; see "News Releases: The Mobile Revolution is Here! Canada's First Android Powered Smartphones Available Exclusively at Rogers Wireless". (Return to Reference 32)

33 See, for example, Shaw 2008a. Consumers send a command by SMS and, in a text response, can see their account information directly on the displays of their mobile devices. (Return to Reference 33)

34 See, for example,,,,,317,00.html and Consumers must be pre-registered with the institution's Internet banking services and then use their same password to access the mobile banking Web site via their cellphones. (Return to Reference 34)

35 Consumers pre-register their credit card account and license plate information at a city website and call a city phone number when parking. A mobile payment service has also been tested for taxi cab fares (Jay 2007). (Return to Reference 35)

36 Using chip-embedded cellphones that contain credit card account details, consumers pay by tapping the handset close to a compatible point-of-sale reader. These NFC (near-field communication) contactless payment pilots parallel the migration to chip-based credit cards that is underway in Canada. (Return to Reference 36)

37 MMS is essentially a SMS upgrade where messages can also include images, photos, audio clips, etc.. (Return to Reference 37)

38 Subscribers receive tickets as a multimedia message with an embedded barcode that can be scanned. See, for example, and (Return to Reference 38)

39 Users receive a SMS ticket confirmation, which they can then show to the driver. (Return to Reference 39)

40 The targeted market was said to be $20-and-under transactions, such as paying a babysitter, settling up for lunch, or contributing to a gift in the office (Shaw 2008b). The trial ended in February 2009; at the time of writing, no information on the program's evaluation appeared to be publicly available. (Return to Reference 40)

41 See In the U.S., Visa is also testing a person-to-person service, which can link any Visa credit or debit card and, in a second phase, will support cross-border transactions (Bills and Aspan, 2008). Mastercard has also announced the launch of its person-to-person payments service in the United States; see (Return to Reference 41)

42 At its launch, Zoompass was described by the carriers' joint venture company as "an important milestone towards developing a mobile commerce ecosystem in Canada that provides users a convenient mode of doing everyday transactions with their phone". (Return to Reference 42)

43 "Mobile payments are about much more than mere credit card substitution; rather, they represent a transformative digital application that will benefit consumers, merchants, and the economy and society at large. Mobile wallets will enhance consumer convenience through the potential to replace a litany of artifacts of analog life designed to convey money or information—credit cards, loyalty cards, transit cards, ID cards, keys, key fobs, tickets, passes, etc.—with a single, more powerful digital device. Moreover, mobile payments will benefit the economy by driving a range of productivity improvements through: 1) bringing operational efficiencies to merchants, retailers, transit authorities and others engaged in routinized monetary or information transactions; 2) enabling a range of innovative new business models and service offerings; and 3) pushing distributed computing intelligence into the physical world." (Ezell 2009, p. 2). (Return to Reference 43)

44 "(…) among those respondents who had not conducted banking through their mobile device, 44 percent globally and 55 percent in Canada cite security and privacy issues as a primary reason for not utilizing the service." (KPMG LLP. 2009). (Return to Reference 44)

45 For example, less than half of South Africans reportedly have bank accounts, but nine out of ten are said to own a mobile phone (Lapper 2009). (Return to Reference 45)

46 The cellphone-based payments essentially operate as a wireless cash transfer system: "The mobile payments schemes work because field agents can be appointed who carry a cash float. A relative in Nairobi can send money back to family in the Rift Valley using Safaricom's M-pesa system. The person in the village takes the phone to an agent, which in Kenya is often a local Safaricom shop, shows the text message and some ID, and is handed the Kenyan Shillings. The receiver doesn't have to have an M-pesa account, or even be on Safaricom. It's been fantastically successful, and Safaricom now has 5M accounts in a country which only has 4M bank accounts." (Rockman 2009). (Return to Reference 46)

47 For example, Western Union rolled out a mobile pilot that is available from its global agent locations for money transfers to subscribers in the Philippines; "Western Union Mobile Money Transfer". (Return to Reference 47)

48 "Although for regulatory reasons M-PESA accounts do not pay interest, the service is used by some people as a savings account. (…) Mobile banking is safer than storing wealth in the form of cattle (which can become diseased and die), gold (which can be stolen) or by stuffing banknotes into a mattress." (The Economist 2009, p. 13). (Return to Reference 48)

49 In November 2008, a working group reporting to Finland's Justice Ministry recommended that secure procedures such as web bank logins be required (Pohjanpalo 2008). (Return to Reference 49)

50 As reported by the U.K.'s Home Office, a mobile phone was stolen in half of all 2007–08 robberies recorded by police in England and Wales, and it was the only thing taken in a third of all robberies. (Return to Reference 50)

51 In the specific case of unauthorized transactions through FIs' mobile banking sites, it appears that the banking industry's online protections are simply extended; see, for example, However, a review of online banking policies by security experts concluded that: "Although banks heavily advertise an apparent '100% online security guarantee', typically the fine print makes this conditional on users fulfilling certain security requirements. We found that many security requirements are too difficult for regular users to follow, and believe that some marketing-related messages about safety and security actually mislead users." (Mannan and Oorschot 2007, p. 1). (Return to Reference 51)

52 A 2008 survey of New York City cab drivers estimated that over 30,000 cellphones were forgotten over a 6-month period; see (Return to Reference 52)

53 In Denmark, "the SIM [Subscriber Identification Module] card in mobile phones is explicitly regarded as a means of payment like other payment cards covered by the Act on Certain Payment Instruments" (OECD 2007, p. 27). (Return to Reference 53)

54 For example, Apple introduced a MobileMe feature on its iPhone, which allows users to locate their lost phone on a map and remotely wipe out personal data; see (Return to Reference 54)

55 See "The PayPal SMS Security Key adds another layer of protection to PayPal accounts and uses the same security infrastructure as the PayPal Security Key, which generates a unique security code approximately every 30 seconds on a small electronic token. Members receive this code to their phones or tokens, and use the codes along with their usernames and passwords to sign in to their accounts." (Return to Reference 55)

56 A U.S. industry analysis also concluded that there is plenty of opportunity: "We believe that mobile marketing is one of the few instances in which the current hype actually underestimates the full potential of the market opportunity" (IDC 2007). (Return to Reference 56)

57 Companies invite consumers to send a text message to participate in a contest or obtain a promotion. See, for example, "Generation Rock". (Return to Reference 57)

58 See, for example, Projections for global growth in coupons issued via mobile phones by 2010 are as high as 30%, as "mobile coupons are expected to be one of the biggest winners of the current global recession" (Juniper Research 2009). (Return to Reference 58)

59 CDD and U.S. PIRG 2009 document worrisome industry practices or intentions with respect to behavioral targeting, location-based targeting, user tracking / mobile analytics, audience segmentation and data mining. In Canada, the marketing strategies deployed by some wireless providers with respect to their download storefronts and related pay-per-use services also raise questions. For example: "(…) Virgin Mobile Canada is able to monitor on an individual basis, each customer's download lifecycle — so if a reduction in download usage is observed, highly tailored messages can be sent to incent and motivate the customer to increase interactions. (…) Without using discounts or incentives we saw a 70 percent increase in downloads by customers that was directly attributable to the highly focused marketing message delivered (…)" (reported in Verisign 2007). (Return to Reference 59)

60 "(…) the Privacy Commissioner has not yet used PIPEDA to specifically address the issue of online behavioural targeted advertising practices. Moreover, it is unreasonable to expect consumers to complain about the practice when they are unaware of the extent to which their personal information is collected, used and disclosed for the purpose of online behavioural targeted advertising." (PIAC 2009, p. 76). (Return to Reference 60)

61 The U.S.-based telemarketing scam that targets both landlines and cellphones has been reported in Canada (see, for example, Mah 2009); in May 2009, the FTC filed a suit to stop these illegal robocalls (FTC 2009b). (Return to Reference 61)

62 One Canadian wireless provider has also requested that the CRTC include text-messaging in Canada's Do-Not-Call rules and system; the Commission indicated that it has prioritized other implementation issues (Cole 2008). (Return to Reference 62)

63 Location-based services (LBS) use location information (from cellular networks, a phone's global positioning system (GPS), or Bluetooth technology) to offer personalized marketing or services to users. (Return to Reference 63)

64 See, for example, (Return to Reference 64)

65 In 2007, one carrier launched a $5 per month Kid Find service, which offers family members on the same account the possibility to locate each other on an interactive map; see (Return to Reference 65)

66 ", a social network that lets users broadcast their location, will add content from Metro's Canadian papers that are specific to where they are. Using a mobile phone's GPS system, a user can receive, for example, a restaurant review from Metro if that user is near the corresponding eatery." (Rocha 2010). (Return to Reference 66)

67 This and a number of other issues will be part of the Office's 2010 Consumer Privacy Consultations; see (Return to Reference 67)

68 See, for example, (Return to Reference 68)

69 See, for example,'s pared-down mobile web site at (Return to Reference 69)

70 This compares to a little less than four out of ten for other smartphone users, and less than one in ten for the mobile market in general (M:Metrics 2008). (Return to Reference 70)

71 The netbook category includes "stripped-down PCs optimized for Internet use and costing a relatively affordable $300–$400 (U.S.)" (Madway 2009). (Return to Reference 71)

72 Purchases on a Kindle, for example, can be automatically linked to the credit card associated with the Amazon customer's account; see (Return to Reference 72)

73 "Some countries apply general provisions prohibiting unfair or deceptive acts or practices to consumer protection issues relating to mobile commerce. For example, the provision prohibiting misleading representations and deceptive marketing practices in Canada's Competition Act is technologically neutral." (OECD 2007, p. 23). (Return to Reference 73)

74 See for information on the OECD Conference on Empowering E-Consumers: Strengthening Consumer Protection in the Internet Economy, to be held in December 2009. (Return to Reference 74)

75 See the OECD work related to the 2008 Ministerial Meeting on the Future of the Internet Economy, which "recognizes that the dynamic nature of the Internet and its rapidly changing environment (…) may lead to unforeseen — and unforeseeable — developments. It acknowledges that the open and collaborative nature of the Internet challenges traditional policy-making processes and that a multi-stakeholder approach to achieving an appropriate balance of laws, policies, self-regulation and consumer empowerment may be the only way to promote the Internet economy effectively." (OECD 2008b). (Return to Reference 75)

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