Mobile Payment - What is it, Types & How to Use Them?

What is Mobile Payment?

Mobile payment is a type of payment which customers use to pay money when they go to purchase products or services. The devices that customers use for making payments are tablets and smartphones. There are many payment apps which can be installed on the mobile. Many banks have also adopted mobile payment technology and have launched many banking apps which customers can use to send and receive money.

Types of Mobile Payment

Mobile payment is of different types and we will discuss them in detail ?

1. Mobile Wallets

Mobile wallets are digital apps which can be easily installed on smartphones. These apps help you to store information about the amount of money paid and received. The apps can be used for transferring funds from one account to another. You can also pay bills, send funds to your family and friends, make purchases, and do a lot of other things. Some of these apps are Google Pay, Apple Pay, PhonePe, and many more.

2. NFC Payments

The full form of NFC is Near Field Communication. NFC payments can be made with those digital devices that consist of NFC chips. NFC technology is used to make payments. NFC is a wireless technology in which you just have to tap the device to make the payment. You need to go to the settings and enable the payment option to make payment through the NFC-enabled devices.

3. P2P Payment Apps

Peer-to-peer (P2P) payment apps can be installed on smartphones and can be used for sending and receiving payments. Cash or cheques are not required for the purpose. One such app is Razorpay which can be used to make payments for bills, pay the local vendors, etc.

4. SMS Payments

SMS payments can also be made through smartphones. The payment can be made through text messaging. In order to make payments through SMS, you have to get in touch with a mobile payment provider and make a link with your debit card, credit card, or bank account. The cost of making payment through SMS will be deducted through the mobile carrier.

5. Mobile Point of Sale

Mobile point of sale is a system which is helping businesses to make different types of transactions. A smartphone works like a portable cash register and payment can be sent or received anytime and anywhere. Small businesses can take advantage of this technology.

6. Browser based Transactions

You can send and receive payments through the web browser on your mobile, laptop, or other digital devices. You have to fill out the checkout form of your company and then choose the payment mode like debit card, credit card, payment app, etc.

7. QR Code Payment

You can make payments with the help of QR codes. QR codes are patterned blocks and white icons which you can scan on the smartphone of the person or the company to whom you have to make payment. There are many banking apps and mobile wallets which consist of QR codes for making and receiving payments.

8. Payment Links

Payment links can also be used to make payments. This is a type of payment in which a link is sent to the customers to make payment. These links can be sent through text messages or email.

Businesses using Mobile Payment

Various types of businesses use different types of mobile payment so that they can receive money from customers easily. Here we will discuss about the types of businesses that use mobile payment.

1. Retail Stores

Retail stores have started using mobile payments which has reduced the time of giving change, looking for cash, etc. You can make payments in the grocery store, clothes shop, and many other types of retail businesses. You can have a great shopping experience at the retail stores.

2. Food and Beverage

Many restaurants and street food vendors have started using mobile payment which helps them as well as the customers to have a smooth experience of having food and making payment online. Quick transactions can be made easily with the help of a mobile payment apps.

3. Service Providers

Mobile payment has eased the process of payment for service providers. Service providers like hairdressers, plumbers, electricians, etc. can provide their services and get payment through a mobile app. Cash or checks are not needed to make payments.

4. Events and Entertainment

Mobile payment is an easy mode of payment for the people who attend an event and also for the organizers. Payment can be made for purchasing tickets for the event, food, giving tips, and many other kinds of payments. The fast speed of transactions is beneficial for the organizers.

5. Beauty and Wellness

People who want to go to a salon can make payments for their haircut, shaving, hair color, and other things that they can do for their beauty. People can also book appointments in the salon or massage center and make online payments. The service providers can also set reminders so that they can know about their appointments.

6. Home and Personal Services

Mobile payment has made the payment easy for the clients and the service providers. You can hire a personal trainer, or a cleaner and make payment online. This mode of payment reduces delays in payment.

How to use Mobile Payment?

Here are the steps for using mobile payment ?

• Download a payment app like Google Pay or Apple Pay. Google Pay is available on Google Play Store and Apple Pay is available on Apple App Store.
• Create an account with a strong password that consists of numbers, letters, and special symbols.
• Link the app to your mobile payment app. You can add any number of accounts as per your convenience. You have to set a PIN for each account which can be used to authenticate the payment.
• In the case of a mobile wallet, you have to load money from your bank account or debit card.
• The payment can be made with the help of a QR code or other options available in the app like pay to the account, pay to the contact, and many more.
• Now enter the PIN which you have set up while making the account.
• A confirmation message will be delivered to ensure that the payment has been made successfully.

Benefits of Mobile Payment

There are many benefits of mobile payments and we will discuss some of them here.

1. Convenience

Mobile payment is convenient as customers can do instant payment and shopkeepers or service providers do not have to pay any change. The payment can be made with a few taps. Mobile payment can be done anytime and anywhere.

2. Speed of Payment

Payment can be made efficiently and at a fast pace through mobile payment apps. There is no need to stand in long queues and wait for your turn. Mobile payment can be done in no time and this saves a lot of time for the customers and the service provider.

3. Secure Payment

The main aspect of the mobile payment is the security. Many features are being used to make the transaction secure. Some of these features are tokenization, encryption, biometric authentication, etc. This will protect the transaction from unauthorized access.

4. Different options for making Payments

There are different types of online payment methods and users can use any of them by installing them on their smartphone. These different modes of payment are bank accounts, credit cards, debit cards, mobile wallets, and many more.

5. Competitive Advantage

The marketplace is facing tough competition as everybody wants to be ahead. Mobile payment has become a way as the payment can be made in a secure environment and conveniently. Different types of payment options can be used by customers to make payments for the products or services that they have purchased.

Conclusion

Mobile payment has become a new mode of payment which people can use to pay money for different types of transactions. They can purchase groceries, fruits, clothes, etc., and make payments through different mobile apps. The payment can also be made through the QR code, NFC, etc. Users can also send money to their family and friends. Mobile payment has helped businesses to be in the competition by providing different payment options to their customers.

Mobile Payment FAQs

1. What are the technologies used behind mobile payment?

The technologies used behind mobile payment are ?

• NFC
• QR Codes
• SMS Based Transactions
• Digital Wallets
• Encryption and Tokenization
• Biometric Verification
• Cloud Based Payment
• Host Card Emulation
• APIs

2. Can mobile payment fully eliminate the physical way of payment?

No! Mobile payment cannot fully eliminate the physical way of payment. It is so because if there is a failure of the mobile payment system due to a server down or any other issue, people have to make payments through cash.

3. What types of devices can be used to install mobile payment apps like Google Pay?

Any type of smartphone or tablet can be used for installing a mobile payment app. In order to install Google Pay, smartphones with Android 5.0 and above should be used.

4. What are the reasons behind payment declinations?

There are situations when the mobile payment is declined. It may happen due to insufficient balance in the account, suspicion of fraud, issues related to the device, and many more.

5. What are some examples of mobile payment apps?

Different kinds of mobile payment apps are being used to send and receive payments. Some of them are Google Pay, Paytm, PhonePe, Apple Pay, and many more. Most apps can be found on Google Play Store and Apple Store.