A Beginners Guide to Mobile Payment Systems
The evolution of money is Barter, Commodity, Metallic, Paper, Credit, and Plastic. However, with innovative products and NFC or BLE technology, money once again has dramatically transformed its appearance and character in the form of m-payments or mobile payments. Smartphones have replaced credit and debit cards, coins, checks, and other payment methods as well as revolutionized the online shopping experience.
Nearly half of Millennials and around 80 percent of Generation Z use a mobile wallet and other m-payment methods over the traditional approaches. By 2020, the usage of various mobile payment systems and services among Millennials is anticipated to reach $503 billion. In fact, it’s also predicted that by 2021, the Near-Field Communication (NFC) and other contactless technologies are projected to generate a transaction value of approximately $190 billion. In addition to that, the total global transaction volume from mobile payment market will reach $1 trillion in 2019, according to Statista. Below we have outlined the top five secure mobile payment methods that entrepreneurs and users can use to process payments just by tapping or waving their mobile phones. So let’s check them out:
The contactless payments are one of the most convenient methods for commercial as well as personal trades. The fact of being secure, fast, and well-preserved made this approach an instant hit amongst users to purchase products or services using their debit, credit or chip cards. This approach utilizes RFID (Radio Frequency Identification) or NFC (Near-Fear Communication) technology for the secure transfer of card data between the user and terminal. During the data transmission, there’s minimal or no contact between the card and machine because users don’t have to insert their cards into any system. This practice is being employed in a range of devices including credit, pre-paid, and debit cards, wearables like wristband and watches, as well as smartphones and other mobile devices.
NFC and RFID technologies have an extensive range than traditional magnetic strips embedded on the back of a credit or debit card. After concealing the user information on these strips, it instantaneously transfers the encrypted data to a POS (Point-of-Sale) system.
2. In-app Payments
For the business world, the continually changing landscape of mobile commerce has brought a variety of opportunities to rejoin clientele and partners in a service-rich, decentralized environment. These days, an in-app payment mechanism is being utilized to deliver sustainable and robust payment solutions since it does not enforce any pre-restrained business model. The option to integrate their e-commerce with this mechanism is opening up a brand new frontier for businesses to create better revenue opportunities beyond just traditional sales.
In-App Purchase allows sellers to sell services, virtual goods, subscriptions, and add-on content, such as latest features and additional game levels, all within their apps. Numerous mobile payment software companies are providing businesses with secure and fast payment solutions to integrate payments directly into their apps. However, a key point to remember is that the goods can be purchased and delivered digitally within the app solitary. The traditional example of in-app purchase is Apple’s iTunes, which enables users to buy their favorite music directly from the app.
3. Mobile Wallets
Not that long ago, the shoppers were always left high and dry when they realized they mistakenly forgot to bring their wallets and didn’t have any resources, including cash and cards, to make a payment for goods. But that all changed when ‘Mobile Wallets’ emerged as the epitome of how the cutting-edge technology and innovations had advanced and enabled the manifestation of this genius concept.
Today, people altogether have replaced their physical wallets with its digital version that subsists on mobile devices. In addition to the efficiencies and easiness that mobile wallets have brought to the end users with the single tap technology, even advantageous conveniences are being employed by businesses, brick-and-mortar stores, and other service companies.
In this, a business integrates customer data like user information and purchase data with a POS data platform, which subsequently chronicles the inbound activity data within specific customer segments. On a side note, users can save credit/debit card details on their smartphones so that they can make contactless, e-commerce, POS, and in-app transactions seamlessly. The world’s most popular mobile wallets including Apple Pay and Samsung Pay also rely on the Near-Fear Communication technology to enable financial transactions. On top of that, this handy bit of mobile payment technology keeps your data secure using end-to-end encryption and tokenization.
4. QR Code Payments
According to a report, around 45 percent of the customers favor processing payments via the QR codes. QR is the abbreviation for Quick Response code first designed by Denso Wave to track the inventory of automobiles. QR is a two-dimensional barcode encrypted in the form of ‘Black Square’ that can be read and decoded using a barcode reader. These days, most smartphones with cameras are capable of scanning the QR codes, which has led to the widespread use of this payment technique. In essence, there are two ways to make payments via QR codes:
- Receiving a QR code in the phone and getting it scanned at the counter.
- Scanning the QR code directly at the counter and make the payment.
5. Person-to-Person or Peer-to-Peer (P2P) Payment
Regardless of what bank users be affiliated with, they can use their digital wallet to send to and receive bills from others via any funding source attached to their mWallet.
Peer-to-Peer (P2P) payment apps like PayPal and Square Cash are being adopted so quickly as well as rapidly growing in popularity. These apps enable consumers to exchange money directly, without needing to visit an ATM or write a check.
If you are seeking cost-effective, secure mobile payment solutions to reduce your liability for chargebacks and fraudulent activity, accept payments through your smartphone, and streamline the way your business processes payments, then get in contact with us.