Mobile payments

It is the new big thing in e-commerce!

With the launch of Passbook compatible apps on IPhones and the introduction of Google and Paypal’s virtual wallets, mobile payment is really starting to take off.

Now, you can pay for your Starbucks coffee by simply scanning a barcode on your phone, you can have a virtual movie ticket that you can just scan at the theatre entrance, avoiding all the lines… Even more revolutionary, Google wallet can store all your debit and credit cards on highly secure Google servers and allows you to pay in any store using Paypass or  GoogleWallet terminals by tapping the back of your phone to an NFC point of sale terminal at checkout.

On February 2011, the mobile payment market was estimated at 300 billion dollars and this number is expected to double by the end of 2013 as more banks, credit card companies, mobile network operators and big firms like Google and PayPal expand their offering and more merchants adopt them.

There are four basic technology models that allow mobile payment:

•     Premium SMS based transactional payments was one of the first mobile payment technologies used and allows a consumer to pay for a service by sending a payment request via text or USSD to a short code. The consumer is then charged through his phone bill or his online wallet.
•        Direct Mobile Billing: The consumer uses a PIN and a one-time password and is charged for the purchase on his mobile account. This was a very popular payment method, particularly in Asia but is now being replaced by WAP and NFC
•     Mobile web payments: the consumer can use the web pages or apps combined with a payment service such as paypal or a credit card to make the purchase. The WAP technology is used to purchase an item the same way it would be on a desktop.
•     Contactless near field communication technology or NFC: the consumer stores credit card and/or debit card information on his phone and make a payment by just waving his phone over the card reader. Some virtual wallets will even allow you to pre-load coupons and customer reward points on your smartphone and will apply them to your total automatically when you check out. This is the technology used by Google Wallet for instance.

http://www.theglobeandmail.com/report-on-business/canadian-banks-rushing-to-offer-virtual-wallets/article4404561/

http://www.google.ca/wallet/

http://en.wikipedia.org/wiki/Mobile_payment