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What is a Mobile Payment?

by Simon. Average Reading Time: about a minute.

Mobile payment is being adopted all over the world in different ways. Combined market for all types of mobile payments is expected to reach more than $600 billion globally by 2013, which would be double the figure as of February, 2011, while mobile payment market for goods and services, excluding contactless NFC transactions and money transfers, is expected to exceed $300 billion globally by 2013.

But what is a mobile payment? Mobile Payments Today put together a handy infographic, which I’ve summarised below:

  • Mobile at the point of sale – The mobile wallet. It’s paying for things at a shop with a mobile device using Near Field Communication (NFC) or “tap and go”. Providers include Google Wallet, MasterCard, Isis and Visa.
  • Mobile as the point of sale – Every smartphone is a cash register. This is merchants using a mobile device to process credit card payments. Not to be confused with mobile wallets, they are not the same thing. Providers include Verifone and Square.
  • The mobile payment platform – The ‘everything else’ mobile payment. Think of this as a catch-all category for products that let consumers send money to merchants, or even to each other (sometimes called P2P), using mobile devices. It might be at the point-of-sale. It might be online. It might use text messages or even NFC. Examples include PayPal and Serve from AMEX.
  • Direct carrier billing – Telling digital merchants to ‘put it on my bill.’ This is consumers buying ringtones, games or digital content by putting the charges on their mobile phone bills. You may hear this being called “in app billing”. Providers include PayOne, boku, Zong from PayPal and mopay.
  • Closed loop mobile payments – The return of the store credit card. This time it’s mobile. If a company doesn’t want to wait for someone else to build a wallet or a payment platform, it can always build its own. That’s what Starbucks did. Is it expensive? Yes. Is it worth it? Ask Starbucks. They reportedly did 3 million transactions in their first two months.

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