Different Types of Mobile Payments and Services Offered by Online Payment Apps
Posted by Arjit Chalmela on March 27th, 2020
Mobile payments have made bill recharges easier. Due to the increased dependence on smartphones, people are using online platforms to pay the bills conveniently. In India, 3/4th of the population uses smartphones, of which the majority are using mobile payment services. There are different types of mobile payment modes, which shall be discussed in the following paragraphs.
Primarily, online payment is divided as:
- Point-of-sale solutions
- In-store payments
- Remote payments
Point-of-sale payments include
- Near-field Communication (NFC) payments – this is a method where the payment is processed with an NFC enabled card machine using proximity radio frequency identification. Here the receiver should have an NFC enabled credit card terminal, and the sender should have a smartphone. The mobile phones don’t have to touch to transfer the information. But the devices have to be within a few inches of the terminal.
- Sound waves-based payment – this kind of payment is the latest technology for most mobile phones. Here the transactions are processed without the need for the internet. Sound waves-based payments process transactions through unique sound waves containing encrypted data about the payment. The sound waves are sent from a terminal to the mobile phone to send the payment details. Then, the customer’s phone converts that data into analogue signals to finalize the transaction.
- Magnetic-source transmission payments – MST payment involves emitting a magnetic signal to the magnetic strip on the payer’s credit card, which the card terminal will process as if a physical card has swiped through the machine.
In-store payments include
- Mobile wallets – also known as digital wallet stores the payment information (including debit/credit card details) on a mobile device in the form of an app. You need to install a mobile app to pay online. Mobile wallets use NFC and QR codes for most of the time as their mode of payment.
- QR code payments – QR codes work in mobile pay apps and certain banking apps, where your cards are already linked and associated with the respective bank account. By scanning the unique QR code, the payment information is passed on to the buyer’s smartphone, which then the buyer shall enter the amount and complete the payment.
Remote payment includes
- Internet payments – where you can manually enter the card details and proceed with the amount.
- SMS payment – once you have submitted a text message with the exact format to the right payee phone number, then the payment amount is added to your mobile bill.
- Mobile banking – here, you need to install your bank’s app to conduct a financial transaction. This is also a commonly used mode of payment these days. But here, you need to enter the receiver’s account details and information to send the money.
For the past few years, there has been a steady increase in the use of online payment apps. With high-end security, you can safely transact your business and payments at no time.
