Also recognized as mobile money transfer, mobile money, and mobile wallet, mobile payment is referred to payment services which get operated under financial regulation and achieved from or through a mobile device. So, in place of paying with a cheque, credit cards or cash, consumers can make use of a mobile for paying for a huge range of services and hard or digital goods. Though the concept of utilizing non-coin-based currency systems do have a long history, yet only some time back, the technology for supporting these systems has turned hugely available. Today, numerous countries are adopting mobile payment option in various ways.
The initial patent particularly defined ‘mobile payment system’ got filed in the year 2000. In the year 2008, the integrated market for all the kinds of mobile payments was anticipated to reach above $600 billion globally by the year 2013. This figure has doubled from the figures of February 2011. The mobile payment processes for goods as well as services, that excludes contactless payments and money transfers are assumed to cross $300 billion globally by the year 2013. Again, investment on mobile payments authorization will grow by 22.2% by the coming two years all across the globe. Both Asia and Africa will witness remarkable growth meant for mobile money with various technological innovations which got prominent in the year 2018.
The step included in the payments’ process
The vital three steps that are included in the payments’ process are:
- Authorization – When a customer uses his cards for making a purchase, then the process to check that he has got enough funds and approving the purchase is known as authorization.
- Capture – After authorization, the bank of the customer verifies that there are funds obtainable and then places a hold meant for those funds.
- Settlement – The mechanism to send funds from a customer’s account to a merchant bank is known as settlement. It is the job of the payment network to handle the settlement.
Mobile payment solutions
Mobile payment solutions can be classed based on the kind of payment effected and according to the technology which is adopted for implementing the solution. There are some varieties of combinations meant for these frameworks. There are different models obtainable for mobile payment solutions grounded on the basis of payment (a) Credit card based (b) bank account based (c) telecommunication company billing based.
- Credit card based – In this payment process, the credit card number gets linked to the customer’s mobile phone number.
- Bank account – Banks have many million customers and so have the telecommunication operators. If they collaborate for providing an m-payment solution, then it becomes a win-win situation for both the industries.
- Telecommunication company billing of mobile payments – A customer might make payment to merchants by using his/her mobile number and it may get charged to his mobile phone bills. After this, the customer settles the money matters with the telecommunication company.
When the matter comes to mobile payments authorization, then encryption is used for ensuring confidentiality. By encryption is meant the process through which plaintext data gets changed into unintelligible data.