4 Most Used Mobile Payments

Be it that we are swiping our phone at Starbucks or using our mobile credit to buy a game, Mobile Payments seem to be more frequent in our lives. This common situation represent a wide range of opportunities for business owners to make their customers leave their wallet at home and make more sales!

This article intends to review the four most used mobile payment methods in order to have a clear idea for each one. But first…

What exactly are Mobile Payments?

Mobile Payments are a mobile money transfer system that works using a mobile device, such as a smartphone. In such terms, mobile payments enable the user to utilize his mobile device, and, purchase any kind of service or goods.

According to Mobile Payments Today we can differentiate 4 main types of mobile payments:

1.The Mobile Wallet

Resultado de imagen para apple pay

You have probably heard of Apple Pay, Android Pay or Paypal. These are all Mobile Wallets, they allow the customers to load “money” into their account by using a credit or debit card and then utilize that money to buy any type of goods or services.

Mobile Wallets can be used by businesses to make transactions more secure and more frequent. They usually help to secure the transactions and make the business more reliable in the eyes of the users. Furthermore, they collect data and help to manage the buying experience.

2. Mobile as a Point of Sale

Also known as mPOS (mobile Points of Sales), it allows any mobile device to become a cash register machine. It is a cost-effective tool that small business owners can use to conduct transactions using their tablets or mobile phones without having to invest in an electronic register or pay someone to support the software.

In this scenario, any tablet or mobile phone can be enabled with a mobile app and a special card reader that plugs into the mobile’s audio jack. Some other versions include hand-held docking stations that allow mobile devices to read barcodes and print receipts. To maintain security mPOS used encrypted data and store it in the cloud and not in the device of use.

Some mPOS providers are Square and Verifone.

 3. Direct Carrier Billing

direct carrier billing

Direct Carrier Billing is a type of mobile payment in which users can use their phone balance to purchase goods or services. While DCB had humble beginnings, being used by people to buy ringtones and wallpapers, it has evolved into a much convenient, faster and secure platform to pay for a wide variety of goods and services. Services such as mobile games, applications, and in-app purchases are the most acquired within Direct Carrier Billing.

Typically, mobile operators enable their own Direct Carrier Billing systems. However, platforms such as Bango, Fortumo or Asean DCB  have created a one-click tool that gathers all the carrier billing services available and make it easy for businesses to integrate DCB payments.

In countries where credit cards have a low penetration rate, carrier billing is an excellent option to reach a wider range of customers.

4. Close Loop Mobile Payments

4. NFC PaymentsClosed loop mobile payments are mostly used in physical stores. These type of payments enable consumers to load money into a spending account that is linked to a payment device – for example, a gift card for a specific company.

One of the most successful close loop mobile payments was the one established by Starbucks. It was enabled through their own mobile app and it is linked to the Starbucks card. With this systems, customers can add money to their account, check their promo points and pay for their coffee using the mobile application only.

A much more advanced type of Close Mobile Loop Payment is Amazon Go. It allows buyers to make purchases automatically only by “checking-in” with their smartphones. Amazon Go takes advantage of RFID (Radio-Frequency Identification) and NFC (Near Field Communication) Systems in order to identify the products the users take with them, recognizing their pricing and charging into their account once the phone has passed through the Exit Door.

While many other types of mobile payments exist, these four categories summarize the types that businesses can integrate to make a smooth buying experience for their customers. And, with the advancement of technology, a world in which physical wallets are not longer needs seems possible. 

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Marisa Cardenas

The author Marisa Cardenas

A Senior Marketing & Business Development Executive at Forest Interactive. Marissa works with Mobile Operators to enable mobile digital services across Asia. She is passionate about technology, traveling and currently on a mission to be a lifetime vegetarian.

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