Mobile payment systems allow you to keep your wallet and cash at your home and instead, use your mobile phones to do all the financial transactions every day. Since, your mobile becomes your payment instrument, it is often referred to as mobile wallet, mobile money and mobile money transfer. Mobile based transactions can either be paymentor point of sale transaction done via cell phones rather than paying in cash, card or check. People can use by mobile phones. It is not only a convenient method, but it also involves the great security feature. Mobile payment systems are increasing day by day with consumers as it becomes a security token as it generates a random code or pin for every transaction made. Mobile technology has driven progression in the payments field which helps in making easier purchases without opening your wallet.
Here the question arises: Why to use the mobile payment?
The concept of keeping tens of large money bills in your pocket is on a shrinking mode. Just like mobiles have replaced cameras, alarm clocks, reminder diaries, etc., paper and plastic money are soon to be replaced too. A far more safe and convenient option, mobile pay rushes ahead than the conventional payment systems. It is fast, secure, usually comes with a lot of offers/cash backs etc.
Now, if we look from the future point of view, the benefits can be numerous and ever increasing. However, for now, we can brief out the major benefits as under:
- Security:
Mobile payments helpto reduce the chances of stealing, hacking and other fraudulent activities as mobiles carry huge security features as the fingerprint scanner, pin, code and many other options to make your payment safe and secure from misuse. If you carry enough cash it will bulk up your pocket and thus, would increase risk. Also, now the credit card details are not stored on smartphones directly but in the cloud. So no chance of theft could extract your credit card details just by stealing your phone.
- Reduces time:
The Speed at which m-payments are executed are acceptable to both customers and merchants. It reduces the time as it is faster than any other form of payments. The time savings can also increase profits by allowing you to put up more customers at the same time, especially for businesses with a busy scheduled during the day like a lunch rush at a restaurant.
- Cost:
Basic advantage is thelowercostsof using a mobile card reader or barcode scanner than carrying a credit card terminal from a bank that also charges merchants/ retailers with a monthly fee and the transaction fees.
- Involve customers:
By offering a lot of mobile payment options to customers offline and online, helps to make the purchase process easier for them. This in turn increases the number returning customer and the conversion rates for the businesses.
How mobile payment system works?
There are two main methods mobile wallets work in stores; first by using wireless technology called near field communication (NFC) and other by scanning a QR or other code.
Major companies who provide mobile-payment systems are Apple, Google, Android, Samsung, PayPal and Square which all rely on NFC. When customers enter banking or credit card details to set up the service then the customer simply clicks on the phone next to a payment machine at the store and approve the transaction and purchase is made, usually with a Touch ID (Fingerprint).
Top 6 mobile payment systems are:
1. Google Wallet
In September 2011, the first major NFC enabled payment systems was released as Google Wallet. Users can use Google Wallet to buy online or in a store and even to send money to friends and family or company.
2. Apple Pay
Apple Pay is a digital wallet for individuals or a mobile payment service offered by Apple Company which was launch in 2014. Rather than paying with a physical card simply by using Apple Pay in stores with your iPhone and Apple Watch you can make your purchase in a minute. By just holding your iPhone close to the reader with your fingerprint (Touch ID) or double click the side button on your AppleWatch and keep it near the reader. So, it is just a one step payment method.
3. Square Cash
Square App is an also mobile payment option that provides users to create a username known as a $Cash tag. Here the users can tweet out their $Cashtag for donations, or use it to pay their rent and even to pay someone for their services or simply send them some money. Square app is not as popular as its Google and Apple counterparts are, but is increasingly gaining popularity globally.
4. PayPal
PayPal is one of the best online payment services that provide business and individuals to transfer money even abroad electronically. It is very easy or primary even the safest and secure method of online payment. You can use PayPal for many purposes such as buying or selling of goods and services, to make or receive donations, to send or get payments for online auctions for websites such as EBay and many more. PayPal has collaboratedwith Uber, Airbnb, and StubHub for suitable payments.
5. M-Pesa
M-Pesa was launched by Vodafone in late 2007. It provides users to deposit or withdraw money or to send/transfer money and make payments via mobile phone. M-Pesa is vastly popular in Kenya, where the theservice first launched.
6. Samsung Pay
Samsung pay is the one of the latest entrants in themobile payment service. After Samsung acquired the company LoopPay, Samsung fold its Samsung Wallet to be restored by Samsung Pay. A technology known as Magnetic Secure Transmission along with the much known NFC is embedded in Samsung’s Galaxy S6 and S6 edge, Galaxy S7 Edge, Samsung Galaxy A7, Samsung Galaxy S6 Edge and Samsung Galaxy A5.
The division of mobile based payment systems is a new form of electronic payment system. Unlike its predecessors, mobile pay has already addressed the critical issues of security and safety. It has even evolved itself to come out of the limitations of being dependant on the internet.
However, it is still too soon to predict about the future of mobile payment systems. We can expect this path to expand far beyond the mobile phones’ operating systems and device capability and be more centered towards the customer.
