How To Make Mobile Payments

With smartphones flooding the market and becoming increasingly popular with, mobile payments are replacing physical payments through cash and credit cards. Here under are details about mobile payments or mobile wallets:

The Mobile Wallet

This method uses “tap and go” or your smartphone’s built-in NFC (Near Field Communication wireless technology) or another method to enable you to pay with your cell phone.

Google and ISIS are the two big mobile wallet providers:

(1) Google Wallet is a significant mobile payment initiative. Google started Google Wallet with Sprint’s Nexus S, with other NFC-enabled phones to follow. You add funds to the Google Wallet app with a credit card then can “tap-and-go” at Google Wallet merchants. MasterCard PayPass Network is used. Visa, Discover, and American Express have also joined Google Wallet.

(2) The ISIS network is a digital network formed by AT&T, T-Mobile and Verizon Wireless. The ISIS mobile wallet on your cell phone promises to combine funds with coupons and more.

The Mobile Phone as a Credit Card Terminal

You could also use your cell phone to accept payments from others, i.e., process credit card payments. This capability could obviously be useful for businesses and entrepreneurs-,especially sales people on the go.

The biggest players in this space are Square (which has partnered with Visa) and VeriFone.

(1) Square offers a free credit card reader and app that connects to your iPhone, iPad, or Android device. It charges a simple flat rate of 2.75% for all cards, including American Express.
(2) VeriFone’s PAYware Mobile, works with iPhone, but you’re required to pay a $49 activation fee, buy the encrypted card reader, and there are standard merchant fees as well that vary depending on the transactions.

Other Types of Mobile Payments

Besides the mobile wallet and the credit card processing types, there are a few other types of transactions you could do with your cell phone that could be considered a “mobile payment.”

PayPal and Serve.

(1) PayPal, one of the first alternative payment services, lets you bump iPhones to send money. You can also use PayPal mobile through text messaging. Money is taken out of your linked bank or credit card account, as with other PayPal transactions.
(2) Serve is American Express’ version of PayPal. You can send money from your iPhone, Android, or Windows device and fund using a bank account or credit card. Unlike PayPal, you can use prepaid forms of payment and create sub accounts. P2P (person-to-person) transfers are free, but after January 1, 2012 fees will be charged for funding by credit card or getting cash out of an ATM.

Direct Carrier Billing and Closed Loop Mobile Payments

When you buy an app or ringtone for your phone and have it added to your cell phone bill, that’s a sort of mobile payment as well. Digital content you consume on your device, like TV shows you buy, may also fall into this category. Closed loop mobile payments are when companies create their own type of mobile payment system, such as Starbucks.

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