Mobile Payments

Any payment carried out using a mobile device is known as mobile payment, also known as mobile wallet or mobile money. Mobile Payment is probably the most upcoming technology and trend amongst corporate and consumers at the moment. The technology to make this possible is only now starting to emerge and used widely. The ease of making payments using your mobile phones instead of cash or cards looks promising and is predicted to grow tremendously. Leading technology companies, telecommunication companies and financial institutions have started to implement mobile payment solutions.

Out of the various different mobile payment techniques, let us look at some of the below methods in detail:

1. Near Field Communication - Near Field Communication is the technology using which a consumer can make payments using only his mobile phone. Smart phones now days are equipped with NFC chips which enable the communication between the device and the reader if placed within few centimeters from each other. However, in order for this to work, both the devices must be equipped with the NFC chip. When making payments using NFC, the communication involved is mainly one-way in which the terminal subtracts money from the balance available on the card or charges the bank. While most transactions do not require any authentication, some transactions require entering a PIN to authenticate. Taking into consideration the increasing number of credit card breaches, NFC payment provides a much secure method to make payments which would go a long way in the future.                                                                                    
2. Cloud-based mobile payment - Payment process which allows you to make transactions without the use of hardware Secure Element (SE) is referred to as cloud based mobile payments. PayPal or Google Wallet is a good example for this category. In this payment method, the consumer utilizes the help of a payment provider to make the transaction using a cloud-based link and in the next step, the payment provider charges the consumer’s cloud linked account to recover the amount. This method requires sensitive data to be stored on the consumer’s device and hence is less secured compared to NFC based payments.                                                
3. Quick Response Codes (QR codes) - QR codes are basically machine readable two-dimensional codes which consist of a matrix of black and white squares. They cannot be read by naked eyes and require smart phones to be read and displayed. There are numerous applications which use QR codes and help consumers to link the app with their bank account and load certain amount of money in the app. Since the QR code generated is unique for each user, the system at the receiver end recognizes the QR code and can conduct the transaction with the help of consumers details stored in the QR code.

Mobile payment technologies bridge the gap between digital and physical world by allowing consumers to pay with their smart phones at the point of sale. The technology required for this is progressing at a remarkable rate and smart phones are soon going to replace cash, credit, and debit cards which are currently used widely to make payments.

About Author:
Kintu Racca is a consultant in Systems Plus Pvt. Ltd. Within Systems Plus, she actively contributes to the areas of Technology and Information Security. She can be contacted at kintu.r@spluspl.com