M Commerce is a by product of convergence process of the telecommunication technologies (TCT) & Information Technology (IT), which is collectively referred to as Information and Communication Technologies (ICT). Thus MCommerce may be considered as an extended arm of Electronic Commerce (E-Commerce) to wireless mediums. This convergence, however, enables some unique, location based services, which is very difficult to achieve in E-Commerce. The convergence of TCT & IT has made these innovative services easily accessible to common people. Today, the scope of M-Commerce encompasses almost every walk of life. Mobile services have found its utility almost in every field of content, travel, entertainment, marketing and banking. Mobile revoluation is all set to reach every corner of India after the internet revolution and fast adoption of its use in Indian village and town. Because of this Indian business companies have shifted their focus towards the ignored but potential rural markets. There is a huge opportunity for mobile technologies based business models to experiment with the rural, and convert it into a business opportunity of 75 million potential rural customers in the country. Unlike the ecommerce, businesses based on mobile technology have the advantage of overcoming the barriers of literacy, cost and availability. Innovations in new mobile devices, in term of features and ease of use, have enabled an illiterate to understand and operate. It is very difficult to define M-commerce and thus can be interpreted in a variety of ways because M-commerce is a fairly new phenomenon and several people define it in several ways. M-commerce can be defined as all activities related to a (potential) commercial transaction conducted through communication networks that interface with wireless devices. Another definition of M-commerce could be the use of wireless device to communicate, transact and interact via high speed communication link through the internet (Shuster, 2001, p. 2). Angsana (2002) emphasizes on three elements of Mcommerce devices , network types and a range of activities and explains M-commerce as all electronic based transactions (e.g., payment, purchase and communication interaction) that Use data-enabled wireless device connected to the internet or to a vendors private network

M-commerce in India:

In India the mobile service charges are all time low as compared to the other countries, which has enabled even the low-income earning groups to own and operate multiple mobile phones. To utilize the opportunities which mobile based technologies have to offer and a continuous growth of this sector, a pro- active rather than reactive public policy and regulatory initiatives are desired from the government of India. In mobile Commerce commercial transactions between both B2C and B2B entities happens through mobile devices. With a gradual shift towards modern retailing formats, Indian retail market has experienced high growth over the last decade. Companies have shifted their focuses to plateforms based on mobile technologies because of growing numbers of mobile devices and mammoth wireless subscriber base. Leveraging on enhanced reach like MVAS and diverse features like of e-commerce, m-commerce is poised for greater adoption across India, in the coming years. Although mobile commerce market in International Journal of Technical Research(IJTR) Vol 1, Issue 2, Nov-Dec 2012 ISSN 2278-5787 Page 34 India is in nascent stage, but over the last few years m-payment and m-banking segments have shown significant growth opportunities. The government and other Banking and non banking financial organizations have taken strong steps to reach the Indias population which are still deprived of financial facilities which can ensure a tremendous growth in the latter segments. There are around 89,000 bank branches to serve the 600,000 territories that require banking facilities. This clearly shows a wide gap between what is needed and what is being provided. As a vast segment of the Indian population who neither had a landline nor a bank account today have made a generation leap and not only do they own a mobile handset, but are also slowly attempting to transact on their mobile phone. Keeping this in mind, the estimated potential market size of the m- commerce in India is pegged to be somewhere around 400 crore. Also the potential revenue through mobile commerce can go up to 20 billion in 2015, according to a survey conducted by IAMAI 2011 and this is just the beginning in India. So, there is hardly any doubt that mobile commerce has emerged as a major potential growth area for various mobile operators. Although mobile commerce market in India is in nascent stage, m-payment and m-banking segments have shown significant growth over the last few years. Initiatives taken by the government and financial organizations to reach India's unbanked population can ensure tremendous growth in the latter segments. M-commerce in India is primarily dependent on network operators who can effectively enhance and advance the usage of its services, which has resulted in collaboration and partnership models in domains like banks and telecom operators and technology provider. The market expansion needs to be continuously supported in this domain, which has a huge potential of offering a wide scope in increasing revenue for m-commerce players and telecom operators. Although m-commerce market in India is still in its initial phase, but m-commerce has started to gain importance in the digital marketplace with the growth of Smartphones, tablets, and mobile devices. Mobile phone penetration in India is estimated to be 90% by 2015 which is more than 60% as of now. Over the last few years, services like mbanking, m-trading, and m-shopping segments have shown significant growth. A recent study shows that 45% of smart phone owners and 53% of tablet owners plan to purchase more products on their handheld devices in the future, predicting a huge opportunity for the service in the country.

Why M- PESA?

FINANCIAL INCLUSIONA developing country like India faces a huge shortage of physical infrastructure of the financialinstitutionsthat means a large part of Indian population remain deprived of formal banking system. For an example Kenya has 840 bank branches and around 1500 ATMs which are not at all sufficient for the entire 38 million people.. M-PESA scheme helps the Micro Finance Institutions (MFIs) to target even remote areas veryquicklyand with a reduced cost.Financial inclusion has a multiplier impact on the lives of people drawn into the formal financial system which leads to social inclusion. It is a known fact that when the poor people is provided with financial services, they tend to manage their cash flow in a better way, they do a better financial planning and their savings are increased.M-PESA has the capability to bring formal financial system at the door step of people who have never used these services.ENHANCED ECONOMIC ACTIVITYIt is always a problem from the supply side rather than demand side to provide the cash into the hands of people who can use it. Its the ability to move money from the sender to the receiver that is the stumbling block. Since the creation of money, the ability to move it from A to Bthe so-called velocity of moneyhas been a fundamental cornerstone of economic activity. But the burning issue is exactly how to facilitate the money transfer in a developing economy where the infrastructure is poor and where very few people hold bank accounts. Due to high penetration of mobile phones than the bank account penetration, mobile money transfer platform can substitute the banking infrastructure in rural areas in most of the developing countries.M-PESA could play an instrumental role in driving growth and development. According to the World Bank estimation a reduction in remittance commission by 2-5% could increase the flow of formal remittances by 50-70%, which could boost local economy.In Kenya M-PESA has resulted in higher and better remittance and higher economic activity leading to faster growth. CGAP in its survey has found that the incomes of ruralrecipientsincreased by 5- 30% since they started using M-PESA.REDUCED CASH IN THE ECONOMYIn the absence of formal banking system, most of the transactions are cash based giving no audit trail to the regulators. M-PESA brought in the transparency in the money transactions by reducing the cash economy and digitizing the transactions. M-PESA is equivalent of credit card or debit card which allows the regulators to monitor the trail. There is more visibility on the money flows as the remittances move from informal channels to formal channels.SECURITYM-PESA provides unbanked mobile phone users with a secure platformwhich uses simple, tailored menus on their phone to send fully encrypted and PINlocked messages to a thoroughly audited financial accounting system.It was observed by CGAP that M-PESA not only increased the MFI activity but is also used as a medium of storage of money. Informal saving channels are much less secure than formal saving facilities. Those who can afford it least suffer the highest risk. Both the banked as well as unbanked customers of M-PESA are using it as storage medium as it is easilyaccessible. There are many more agents of M-Pesa than bank which means that the customers need not travel long distances to withdraw cash. With M-PESA, there is no need to carry cash and hence the risk of the cash getting lost or stolen is not there.CONVENIENCECountry in which unemployment is very high people travel far from home in search of work and they also need to be able to send money back to their families to support them.Money remittance is very high in majority of the parts of the world which could range from 3 to as high as 10%. This high remittance cost is one the reason why more and more people depend on traditional and informal channels (through friends and family) to send money or physically deliver the money.The issues with this informal channel is that it cost high, risky unregulated services, unpredictable environment and possibly long expensive trips carrying cash in an unsafe manner.With the introduction of M-PESA users need not to make frequent trips back home to deliver money. Another advantage of M-PESA service that it is accessible 24X7 and money can be sent anytime, anywhere using this service.

Cost Reduction and Efficiency: By riding on the wave of M-PESA, institutions can achieve cost reductions because most of the cost is borne by the customer. For example, an MFI that deals in loans through its branches spends a large sum of money on cash insurance, cash logistics and managing the risk of carrying cash. Even the disbursement of cheques is also costly as MFIs have current accounts and are charged for cheque clearing. But now MFI only has to deposit money in M-PESA account and provide a list of accounts number and the amount to be paid to each. For this service a fee is charged from the MFI on a per transaction basis, but the charges are lower than what the MFI would incur for any other traditional mode of disbursement. Accepting cash deposits at a bank branch is also costly on a per transaction basis to the institution as it invests in branch infrastructure setup, equipment and security arrangements and manpower. If customers start depositing or repaying loans through M-PESA, the financial institution will outsource teller activities to those M-PESA agent.

M-PESA platform allows financial institutions to decongest their offices. Removing a large chunk of crowd from branch office gives the regular staff more time to focus on customer acquisition , product sales, business development and related activities. Branch member can stop worrying about servicing the products and cash management as repayment and disbursements, withdrawal and deposit can be done through agents. All these factors increases staff efficiency.

Customer Satisfaction:Customers do not have to go to the often-distantly located bank branch or deal with agents/cashiers, nor do they have to stand in a queue and complete lengthy bank forms. There are too few actual users at this point to judge client satisfaction, but a bank which offers the convenience of M-PESA could capitalize on positive benefits (security, product offering, and interest payments) and minimize the inconvenience caused due to branch visit.

Advantages for Customers

The potential benefit to end customers is that they need not waste their time travelling to a bank branch or an MFIs designated point for transacting into their accounts. They can go to their nearest M-PESA agent and can deposit money into M-PESA account and can transfer from M-PESA to their bank account resulting into following benefits: Money saved on travel expenses, opportunity cost of lost wages and turnover etc. Ease of transaction wherever/whenever: If a customer is carrying sufficient amount in his/her M-PESA account then he/she does not even need to go to an agent also M-PESA agents are ubiquitous. No hassle and reduced risk of carrying cash. M-PESA agents are closer than the bank branch.