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“SoLoMo” and Legislation

The “SoLoMo” (Social, Local, and Mobile) movement has great impact on consumer behavior and business operations. Now than ever before, more consumers are using mobile payments. According to a recent report @USAToday, the number of mobile payment users is expected to surge from 160.5 million in 2011 to 212.2 million in 2012, a 32% increase; likewise, the amount of mobile payment transactions will grow from $105.9 billion in 2011 to $171.5 billion in 2012, up 62%.

Earlier this month, Starbucks announced that consumers would be able to purchase coffee with Square’s Wallet App starting in November 2012. Eventually, consumers will be able to place an order and settle the payment even before they enter a Starbucks’ store.

When promoting mobile payment options or doing mobile marketing, however, businesses have to jump through one hoop --- they must convince their customers that such mobile app is safe and reliable and that their business is trustworthy. Recently, I received a few spam text messages, telling me that I have won a BestBuy gift card or have an issue with my credit card that needs my immediate response. Like many other consumers, I become more cautious for mobile marketing messages because of spams. Thus, spams create negative impact to those authentic mobile marketing messages as well as “SoLoMo.”

The good news is FCC (Federal Communications Commission) in the U.S.  has published guidelines and oversees the policies for communications, which regulate businesses’ using email and text messaging as a marketing or a business-to-consumer communication tool. For example, consumers must choose to opt-in/double-opt-in to receive e-mail or mobile marketing messages, and companies must allow consumers to opt-out such service at any time. More recently, FCC is proposed to ban internet to phone text messages, according to this FoxNews video.

Are such legislations sufficient in protecting consumers and thus help promote the “SoLoMo” movement? What else could be done to further protect consumers?

Or, do you think legislation should be kept in a minimal level so that companies can compete with one another with more freedom? Besides legislation, what other alternatives could be helpful in promoting “SoLoMo” while protecting consumers?

Relevant discussions:
Using Cell Phones to Make Payments


References:
Platt, Spencer (October 5, 2012). Starbucks gets a Square dealUSA Today. pp. 1B and 2B. 

Comments

  1. Dr. Kwok, the final questions posted in your blog highlight several important issues related to consumer-to-customer promotion and customer protection. When exploring the FCC website, I found the following statement: "We're committed to helping consumers through information, complaint mediation, and regulatory policy. We believe that consumers deserve clear, complete information to help them make the best choices in communications services." I believe this quote best summarizes my desired status as a customer, and also allows for further advancement of the "SoLoMo" movement. Although we have a right to sign up for promotion emails and text messages, I believe they should be kept to a minimum. This issue is becoming more significant because of the reasons first stated in the blog. With more advancements in technology, such as the ability to order and pay via phone, customers are releasing more and more confidential information to companies.

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