Now a days people carry their mobile phones more often than a wallet or purse and with mobile payments getting popular people won’t even need a wallet.
Let us see how a payment is done through mobile?
Mobile payment is a new and rapidly growing alternative payment method. Instead of paying with cash, cheque or credit cards, a consumer can use a mobile phone to pay for services and digital or hard goods.
Mobile payments can be done through:
* SMS based transactional payments
* Direct Mobile Billing
* Mobile web payments (WAP)
* Contactless NFC (Near Field Communication)
SMS based transactional payments
The consumer sends a payment request via an SMS text message or a short code and a premium charge is applied to their phone bill or their online wallet. The merchant involved is informed of the payment success and can then release the paid for goods.
Since a trusted delivery address has typically not been given these goods are most frequently digital with the merchant replying using a Multimedia Messaging Service to deliver the purchased music, ringtones, wallpapers etc.
A Multimedia Messaging Service can also deliver barcodes which can then be scanned for confirmation of payment by a merchant. This is used as an electronic ticket for access to cinemas and events or to collect hard goods.
Direct Mobile Billing
The consumer uses the mobile billing option during checkout at an e-commerce site—such as an online gaming site—to make a payment. After two-factor authentication involving a PIN and One-Time-Password, the consumer’s mobile account is charged for the purchase. It is a true alternative payment method that does not require the use of credit/debit cards or pre-registration at an online payment solution such as PayPal.
Mobile web payments (WAP)
Users use web pages displayed or additional applications downloaded and installed on the mobile phone to make a payment. However, unless the mobile account is directly charged through a mobile network operator, the use of a credit/debit card or pre-registration at online payment solution such as PayPal is still required just as in a desktop environment.
Contactless NFC (Near Field Communication)
It is used mostly in paying for purchases made in physical stores or transportation services. User uses a special mobile phone equipped with a smartcard and waves the phone near a reader module. The payment could be deducted from pre-paid account or charged to mobile or bank account directly.
Would anyone like to add to this …
– Komal Arora
Manager – Technologies
Compare Infobase Limited