January 18th, 2010
Mobile payment is the latest and fastest growing alternative method for paying for goods and services in Europe and Asia. It is an alternative to paying by cash, credit card or cheque and involves using a mobile telephone to authorise payments from a `mobile wallet` to the merchant concerned.
The total market is growing fast and it is expected that the aggregate size of the market for the four main types of payments will exceed $300bn by 2013.
The transactions starts with the phone user sending a text message or USSD (Unstructured Supplementary Service Data) message to an agreed short code telephone number. The required amount to be paid is then added to the pone bill of the user and the merchant is advised of the payment and the goods or services released. In some instances multimedia messages are used to send bar code confirmations which can then be read by the merchant.
This new payment method has come about due to the rapid development of mobile phone technology. With web browsing, e-mailing and specialised operating software, mobile telephones are now akin to portable computers. This technology also enables leapfrog advances to be made in countries with poorly developed traditional payment architectures. Mobile phone technology is relatively cheap to install requiring only transmitters and bandwidths whereas fixed lines require substantial capital spend to install or upgrade.
There is no doubting that the development of these applications alongside a technology hungry user market is revolutionising all areas or mobile communication. The new technologies are easy to use, much more secure, fast and proven through widescale use. As suppliers develop the capability for accepting payments, the market, especially amongst the young, will expand.
The most recent addition is the development of Contactless Near Field Communication. This allows the mobile phone equipped with a smartcard to be used as a payment device in its own right. All that is required is for the phone to be brought near to a reader module for the payment to be authorised. Some transactions also require a PIN making them extra secure. The phone holders pre paid account is debited or the amount charged to a bank account linked with the telephone.
In order to access and fully exploit some of these new services the latest mobile phones are a must buy addition. Amongst the latest arrivals is the Samsung Tocco – a phone typical of the new generation incorporating 8meg camera, e-mail, Bluetooth, HSPDA, memory card slot MP3 played and touchscreen technology. The Ultra edition also includes GPS technology to enable navigation applications to be used.
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