Despite the upsurge in the release of technology news regarding mobile payments, the companies involved, and how much it will be worth over the next few years, consumers remain confused about what mobile payments are and what they will mean to them. In response, industry experts have laid out the most important basic points.
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- Mobile payments were designed to make payment transactions more convenient, using different kinds of technology, from near-field communications (NFC) to direct mobile billing. These are already increasing in popularity worldwide.
- By the year 2015, it is expected by industry experts such as Juniper Research, that the value of mobile payments for physical and digital products will have tripled, reaching $650 billion. The value for 2011 is predicted to be about $240 billion. This statistic includes four kinds of mobile payment, including NFC, direct mobile billing, mobile web payments (via WAP), and transactions that are text or SMS-based.
- Direct mobile billing is the most popular method of making mobile payments in Asia, as no banking is required. Instead, through the use of a password and PIN, goods and services are purchased and their prices are added to the mobile phone bill. This is also becoming widely accepted in the UK, where it has been called a secure and proven mobile payment option.
- Text and SMS-based transactions are those made by sending a text message. These are typically sent to support a charitable cause, for example, but are considered to be one of the more insecure methods of mobile payments. This is because text calls can be dropped. The amount of the purchase is added to the individual’s mobile service bill.
- Mobile web payments through WAP are becoming increasingly popular. The involve allowing the user to make a purchase through a website or app using bank, credit cards or online payment services.
- NFC is a form of technology where the device is equipped with a chip that can be read at a point of sale so that the device needs only to be tapped or waved over a chip reader so that purchases can be made.