Mobile payments – Will wallets be a thing of the past?

Mobile payment involves paying for services or goods through your cellphone rather than with a physical credit card.

Most common forms of mobile payment:

Near field communication (NFC) mobile payment

Basically there is a chip in your phone that holds your credit card information. When you go grocery shopping and proceed to checkout, at the counter your chip would be scanned by another device that holds a transmitter chip and receives the necessary info to complete the transaction. 

A perfect example is the Google wallet

  • It allows you to carry less and save more – basically store all your credit cards and debit cards in Google wallet and you can access it through your smart phone.
  • You can buy in stores such as you would with any pay pass cards and simply tap your phone on the pay pass machine to checkout
  • You could also buy online with Google wallet making it very versatile. No need to keep re-entering your card info since your data is stored on Google wallet
  • Google wallet also has 24/7 fraud monitoring and Google wallet purchase protection which covers 100% of unauthorized transactions

Smart phone credit card reader mobile payment

You would swipe your credit or debit card through a small device that is attached to top of a smart phone. This device would basically behave like any other credit card processing machine.

Square is a perfect example

  • Square offers a card reader which you can attach to your smartphone or tablet.
  • This reader will allow transactions to be directly deposited in your bank account. Funds get deposited within 1-2 business days.
  • Gives businesses options to setup the items that appear on checkout. You have full control.
  • The tablet offers some more features compared to the smart phones such as in app data reporting, printing receipts and cash drawers which can be set up with compatible equipment connected through Wi-Fi.

Mobile Payment through SMS

SMS Payments are currently one of the most popular methods of using mobile phones to pay for goods or services.  Many experts believe that due to the simple nature of SMS payments, the fact that all the user needs is a phone with SMS capability, SMS payments will continue to be a growth area in mobile payments.

A good example would be companies that offer free ringtones online.

All you would have to do would be to SMS your ringtone choice and your ringtone would become available. The charge would be on your next phone bill.

Please comment as I would love to hear you thoughts and opinions.