IPhone 6.0 with Apple Pay

Mobile Payment Systems 101

Mobile payment systems are gradually taking over. It is projected that in 2015, the total volume of mobile payments will be 2.2% of all payments worldwide (as published on Statista.com). This is more than double the transaction volume of 2011.

top mobile payment systems

But even though the term seems pretty self-explanatory, are you sure you really know what falls under the definition of “mobile payment systems”? Let’s start with this – It’s more than just using your phone to pay and it’s more than just leaving your credit card at home.

So what are mobile payment systems?

The term covers a wide range of technological solutions, both for consumers and merchants.

Paying with a Tap (Tap and pay) and NFC (Near Field Communication) solutions

This is most likely what you have in mind when you think of mobile payment systems. Arriving at the cash register at your local supermarket and pulling out your phone to quickly complete payment with a few taps (or a single wave of your device). This technology is used by Google Wallet, Apple Pay and SoftCard, which are the largest players in the mobile payment arena in general.

Mobiles AS the cash register (also referred to as “mobile processing systems”)

This technology is a great relief for merchants. You no longer have an expensive clearing machine, operated wirelessly, by simply adding the swiping hardware to your phone. Then, using the ability to swipe any credit card with any transaction amount, almost any smartphone today can become your virtual cash register.

No-hardware-required pay by mobile apps

While being a bit more messy, you can download to your device and use a selection of apps that allow you to pay with your mobile regardless of the type of hardware or technology the store or website you are shopping at are currently using. One such example is the use of QR codes in order to pay.

All other niche solutions

Sounds too general, right? But mobile payment systems include such a wide range of services and solutions, that it’s hard to come up with a more “intelligent” definition. You will be surprised to find out how many. These include (but not limited too, as new ideas pop up almost every day) –

  • Specific brands offering their own mobile payment apps (like Starbucks)
  • Loyalty programs that reward consumers shopping using their mobile payment app (like CurrentC)
  • Charging purchase to your monthly mobile carrier’s bill (so you don’t link the app to your credit card)
  • And even hardware that connects to your mobile device and replaces most of the magnetic cards that you carry with your in your wallet.

Still confused? Don’t sweat it

It is becoming more and more clear that the market will one day be dominated by a single type of solution although currently all of these are equally considered mobile payment systems.
Until then, the use of sub-categories to distinguish which kind of mobile payment system you are referring to is probably unavoidable.

Jason Gardiner

Tech savvy from Chicago that enjoys life!