What are mobile payment systems?
Mobile payment systems help you make payments with mobile devices that simplify the transaction process for both the customer and merchant. It is estimated according to Statista that in 2023 there will be 1.31 billion mobile transactions worldwide. So to revitalize your business in the Digital age and keep it successful e-commerce businesses need to have smooth check out systems that work effortlessly through smartphones.For the last 5 years, mobile payment systems have come into effect.These systems which were looked upon doubtfully before proved to be a boon during the pandemic. So let us take a peek at some of the different mobile payment systems.
Different types of mobile payment systems.
Near field communication NFC payments.
This is one of the most famous forms of mobile payments around the world. So, how do they work?
NFC mobile phones communicate with NFC enabled card machines with the help of an identification system known as radiofrequency. Here the mobile phones do not require to be touched at the point of sale for any transaction. But there may be a need to stay within a few feet from the payment terminals. A lot of countries around the world use this kind of payment system for public transport with the help of NFC technology. Similarly, a lot of digital wallets utilize NFC payments like Google Pay, Apple Pay, Samsung Pay, etc.NFC mobile payments allow direct transfer of the encrypted form of data to particular POS devices.
Mobile payments based on Sound waves.
A revolutionary solution that is known to work for a lot of smartphone models, it is based completely on signal-based mobile payments. Here the transactions get processed without any need for access to the internet. The transactions are possible with the help of unique sound waves that contain encrypted information related to the payment. These sound waves are possible with the help of unique sound waves that contain encrypted payment information. They are then transferred to a terminal and then to your phone. They provide information about the particular transaction. After this, the smartphone users will convert the given information into analogue signals for a successful transaction.
It is a perfectly affordable solution especially for regions where people are not capable of affording the latest technology. As the banking app, mobile wallet, card or terminal simply need to undergo a software installation.
Mobile payments based on magnetic secure transmission.
As the name suggests MST is a Technology in which a mobile device emits a proper magnetic signal. This magnetic signal copies the magnetic strip situated on the credit card of the person paying. The MST signal is collected by a card terminal and then later processed just like a card that gets swiped with the payment machine. Some machines may require proper software updates for the same.MST is a highly secure form of payment, as they utilize a secure tokenization system.
QR or quick response mobile payments.
These QR codes are two-dimensional black and white square codes that are decoded when scanned with a QR code scanner or with a phone camera.
The customer can scan merchants' QR codes using an application that assists in QR code payments. Later the transaction is confirmed through their phone. A different method for it is that the merchant scans a customer QR code, and enlists an application that helps with QR code payments, it later displays a QR code that contains the details of the customer's card. The merchant then scans this code with a QR scanner to complete the transaction.
A lot of e-commerce businesses also utilize QR codes at their website checkouts so that the tedious task of entering card details manually can be reduced.As the e-commerce business has boomed at an alarming level. Merchants need to find out ways that are convenient for customers to make payments. There are over 6.4 billion smartphone users worldwide which lead merchants to think of ways that can make shopping online simple, convenient and smart. Mobile payment systems have a lot of benefits to the merchants as well as consumers, some of which are mentioned below:
Ease of use and speed.
The first and foremost is the convenience of use for you as well as customers. There is a direct connection between sales and the usage of smartphones to make payments.
Sales volume increases.
A potential customer now looks for an option for mobile payments, when this option is not available you lose sales. Research shows that there has been a large decline in mobile payments and mobile payment users spend twice the number of consumers who do not utilize mobile payment methods.
Customer experience improves.
Long queues for payment are now a thing of the past. With mobile payments, you are reducing the time your customers spend waiting for other customers to find their credit cards or find the right change and providing them with quick and easy customer service. Customers need only tap their phone near the reader — there’s no need to enter a PIN, sign receipts, or dig for money in their pockets.
Some of the popular payment systems are:
Apple Pay was launched in 2014 as a proprietary mobile payment system for iOS. It is used to make purchases in the store, make different transactions and buy applications. The money can be sent and received from and to your friends and family. Apple pay uses a token system that will generate virtual account numbers and a unique security code for all the transactions. The card numbers are never stored by Apple or the merchant. Transactions can be authorized by PIN, Touch ID or even Face ID.The main advantage of Apple Pay is its versatility. The application supports all kinds of online purchases. The main benefit of Apple Pay is for iPhone and Apple watch users.
One of the primary mobile payment applications for Samsung Galaxy products and its wearables is Samsung Pay. It can be used virtually anywhere you can tap your card or swipe it. It is accepted widely and uses a token system for transactions similar to Apple Pay. To make a purchase it needs fingerprints, a PIN, or an iris scan. It has emerged as a winner in the convenience and availability category as it accepts both magnetic stripe and NFC pay. It works at any kind of payment terminal.
The most widely used and prevalent mobile payment for Android devices is Google Pay. It is used to make peer to peer transfers and pay for items at merchant terminals that assist NFC. It uses a token system for security. It is safe because it doesn’t share your actual information. It utilizes a unique encrypted number. It takes your security very seriously and if somehow you lose your phone you can erase the information remotely or even lock it. It even allows you to send money to any email address on Android or even iOS.Google Pay is considered one of the best options for mobile payment systems due to its ease of use, convenience and flexibility.
Mobile payment systems are becoming widely popular in several industries. Businesses are adopting these payment systems to adapt to the changes in the marketplace and the changes in the buying and spending behaviours of their consumers. These days, consumers use multiple channels and devices to make payments and interact with their preferred brands.They expect to be able to complete their purchase in a way that is convenient and easy for them.
Lucent Innovation is a full-service software design and development company and an expert e-commerce solution provider.We create custom applications for our clients leading to an improvement in the efficiency, increased growth and profitability of the business. We also build e-commerce websites that are ready to sell, scale and grow.
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Yaani PatelJuly 22, 2022
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