Mobile payment is about making purchases with a mobile device. Instead of paying with cash, cheque, or credit cards, a consumer can use a smartphone or tablet to pay for a wide range of goods and services. This is done via applications installed on a mobile device or directly from a web page. The transaction is subject to restrictions and guidelines.
There are five types of mobile payments, and the Mobile wallet is one of them. A mobile wallet is an application on your mobile device that enables you to store virtual versions of items you would normally find in a real wallet.
Users can pay their bills with it, transfer money, store credit card or bank account information, customer loyalty cards, gift cards, coupons, boarding passes or event tickets.
These information may be stored either on the device itself or in the cloud. Just as with real money, it can be used to make instant payments, be it at e-stores or physical ones.
Mobile wallets generally work as follows.
- The user downloads the mobile wallet app (if it’s not already built into his mobile device).
- The user registers and inputs his phone number.
- The provider sends an SMS with a Personal Identification Number (PIN) to the user.
- The user enters the received PIN, authenticating the number
- The user inputs his credit card info or another payment method and validates payment.
For subsequent payments, the user will only have to re-enter his PIN to authenticate and validate payment.
Near Field Communication
Near Field Communication (NFC) is a form of contactless communication that enables two electronic devices to transfer data by bringing them within 4 cm of each other. One of the devices is usually a smartphone or a tablet.
NFC is possibly the most enticing and convenient way to make payments, retrieve information, and even exchange videos with friends on the go. NFC is used mostly in paying for purchases made in physical stores, where a user has only to wave his smartphone over a NFC compatible device to instantly pay for his groceries without having to fumble into his wallet for a debit or credit card. The payment could be deducted from a pre-paid account or charged to a mobile or bank account directly.
Jointly developed by Philips and Sony, NFC works via enabled cards and devices. No pairing code is necessary to link up.
NFC technology can still be used on a smartphone that isn’t compatible as the technology is set to be available on both SIM cards and Micro SD cards soon.
It is much more power-efficient than other wireless communication types, as it uses chips that run on very low amounts of power. Unlike Bluetooth and Wi-Fi which use radio transmissions for communication, NFC uses utilizes electromagnetic radio fields to allow wireless communication and data exchange between digital devices.
To guarantee security, NFC often establishes a secure channel and uses encryption when sending sensitive information such as credit card numbers. It is recommended that users protect their private data by adding a password to their smartphone in the event their phone is stolen or lost.
Some Mobile Payment and Digital Wallet services
Apple Pay is a mobile payment and digital wallet service by Apple Inc. It lets users make payments using the iPhone 5 and later models as well as the iPad Air 2, iPad Pro and iPad Mini 3 and later and Mac. Apple Pay does not require contactless payment terminals specific to it, but it works with existing contactless terminals.
Apple Pay lets mobile devices make payments at contactless points of sale, and also in iOS apps and on the Web. It digitizes (that is, in puts in digital form) and replaces the credit or debit card chip and PIN or magnetic stripe transaction at point-of-sale terminals. The service lets Apple devices wirelessly communicate with point of sale systems using a NFC antenna, a chip that stores encrypted payment information and Apple’s Touch ID and Wallet.
Samsung Pay is a mobile payment and digital wallet service by Samsung Electronics that lets users make payments using compatible phones and other Samsung-produced devices. The service supports contactless payments using NFC. It also incorporates an electromagnetic transmission system that allows contactless payments to be used on payment terminals that only support magnetic stripe cards. The service was launched in 2015.
Google Wallet is a payment service that allows people to send and receive money from a mobile device or desktop computer, at no cost to either sender or receiver. Developed by Google, Google Wallet can be used through the Google Wallet app, Gmail and the Google Wallet Card. The app is available for Android devices running Android 4.0 and above, and for iOS devices running iOS 7.0 and above. It depends on NFC hardware as well.
Alipay is a third-party online payment platform with no transaction fees. It was launched in China in 2004 by Alibaba Group. Alipay provides an escrow service, which enables consumers to verify whether they are happy with the goods they have bought before releasing money to the seller. This service was offered to compensate for China’s weak consumer protection laws, which had reduced consumer confidence. Alipay operates with over 50 financial institutions including Visa and Mastercard.
Mobile payments are fast becoming the preferred payment method for Chinese tourists abroad, according to a global research study by payment specialists, Cancan. The study revealed (…) Read more
Smartphones have taken the mobile phone from being a device to talk and text with, to something more akin to a mini computer with the ability to be a personal assistant, virtual (…) Read more
Digital wallets are a relatively new kind of electronic application that can be used to store funds and make payments for good in stores or online over the internet. A bank (…) Read more
Payment systems abound around the world, and many have very different systems, processing systems, and payment ability options. There are also differences in the amounts being (…) Read more
Mobile payments are all the rage these days. With millions of people now using smartphones, the ease of use of a mobile wallet for making payments is the preferred method of the (…) Read more
Before the advent of the internet, businesses had two ways to pay or be paid cash or check. Then came the credit cards, closely followed by debit cards linked to bank accounts. (…) Read more
Everyone knows what an SMS is, and people use them every day. However, few people realize that they can make a payment via SMS on their mobile phone. Read more
In the past, terms such as end-to-end encryption (E2EE) were things known only by the “geeks” who worked in the back-end of programs for security. The majority of people would not (…) Read more
Mobile payments are the modern form of payment with an increasing number of people using their phones for payment of bills, purchases and money transfers. But the question (…) Read more
Card payment technology has rapidly evolved from the old magnetic strip cards to incorporate chip and PIN technology, making them more secure for card present transactions. All (…) Read more
With the global adoption rate of EMV-enabled cards gaining traction, South Africa is slowly starting to move in the same direction as the rest of the world. And with MasterCard (…) Read more
Over a decade ago, chip and PIN technology was first rolled out in Europe and the UK. Its adoption was fast, and almost complete, with only a few merchants not accepting the new (…) Read more
EMV, which stands for EuroPay, MasterCard, and Visa, is a technology that uses an embedded chip to increase card security for the retail card-present transaction. And all across (…) Read more
Entering new markets has become a simplified process nowadays. Thanks to the Internet and technological innovations, payment modes for goods and services have also undergone (…) Read more
Cloud-based mobile payment is gaining momentum across the world. Technological innovations are now offering customers the full suite of capabilities as devices are being (…) Read more
Mobile payments solutions are one of the biggest sections of financial technology (fintech). And in South America, there is a growing trend for mobile payment solutions, as more (…) Read more
With major advancements in mobile payment technology, more people are finding out about the convenience of mobile payment solutions. Smartphones have taken retail payments to a (…) Read more
The rapid growth of financial technology, or fintech, is mainly due to the industry’s adoption of innovative technologies in western countries. In order to continue this growth, (…) Read more
Is it possible to make a payment the same way you make a phone call? Just using the recipient’s number, you could send them money. This is already possible, and the European (…) Read more
Mobile payment options are the growing trend in many Asian countries. With the increase in smartphone use in third-world Asian countries and an ever-increasing selection of mobile (…) Read more
It is not some outlandish project. Biometrics does represent the future of the payment industry, imposing itself as the safest method possible. Indeed, what can be more secure (…) Read more
The series of innovations in the payment industry is rolling on and on. As automakers are partnering with card networks and retailers to equip vehicles with in-car payment (…) Read more
The fear of becoming a victim of mobile payment fraud restrains many shoppers from purchasing from their mobiles. Admittedly, there have been occurrences of data breaches at (…) Read more
The advent of the digital wallet is being largely influenced by discussions on social media. The 2017 Digital Payments Study led by MasterCard concluded that social media (…) Read more
With an increase in the use of mobile payments in the United States, new mobile payment apps are popping up. But many developers are not thinking about integration with all the (…) Read more
The industry leaders in marketing news and mobile payment trends are predicting that mobile payments will finally gain some long-overdue momentum this year. The movement towards (…) Read more
It was predicted that mobile payments would be outrunning other modes of payment. It is indeed witnessing a consistent boom: by the end of 2016, there were more than four hundred (…) Read more
Apple Pay and Samsung Pay are well-established as mobile payment methods in the marketplace. However, since their introduction there has only been a slow rise in their use by the (…) Read more
Near field communication (NFC) has become one of the mainstream payment solutions for today’s consumer. NFC technology is fast becoming the standard in tablets and smartphones. (…) Read more
We may no longer have to walk around with cash bulging in our wallets. It is predicted that in the near future, digital wallets will end up replacing other types of payments. (…) Read more
Mobile phones with their texting and video chat applications, have definitely taken over our means of communication. Thus, mobile wallets and mPOS come as no surprise to modern (…) Read more
Worldline, one of the European leaders in the payment and transactional services industry, has partnered with Visa to run in-house its Cloud-based Payments solution. As such, the (…) Read more
Should you own a smartphone, you could almost certainly pay for things with a swipe of your phone known as electronic or digital wallet. If you are not yet the owner of one, (…) Read more
Nowadays many customers use their smartphone or tablet for making payments. Businesses will have to adapt to this system as it has various advantages. Read more
Thanks to the implementation of new technology, the mobile phone has now become the wallet, with all your financial transactions carried out through an app on your smartphone. Now (…) Read more
Other Topic Pages