The latest big addition for mobile phones is mobile payments, making and receiving payments without using a credit/debit card, hard currency or any other physical payment method. The phone can be a portable bank counter, using a variety of operations to assist a client in making a payment on the move. The technology for mobile payments isn't new - Nokia were promoting NFC technology in 2004. But it is only in the last couple of years, coinciding with the incredible growth in smartphone purchases and app downloads, that mobile payments have become seen as a more viable and profitable development.
The main technologies currently used for mobile payments are:
So which companies are heralding this charge into mobile payments? Google have an app called Google Wallet which stores credit card or store card information and can be used in conjunction with MasterCard PayPass, incorporating NFC technology. At present there are a select number of phone models that can use this service. Only 861 million transactions were made using NFC in 2009 worldwide, but this has been forecast to rise to an incredible 35.6 billion transactions by 2014, as more people buy NFC capable phones and embrace this payment technology.
Not willing to miss out on the mobile payment action, a startup company called Square has developed a small square-shaped card reader which can be attached to a mobile phone turning it into a mobile credit card/debit card payment device. This would allow mobile workers or people just selling products on the go to accept payments via their mobile phone.
Visa, American Express, ISIS (AT&T, Verizon, T-Mobile), PayPal and of course the major banks are all rolling out their own mobile payment plans. With the potential for global mobile payments to be worth over $1 trillion by 2014 (compared to $37.4 billion in 2009) this is something that the major technology, communication & banking companies cannot afford to ignore.
The future of mobile payments looks likely to involve incredible growth as more consumers are willing to accept this form of transaction. The older generation will probably still prefer carrying cash or cards, but younger shoppers who are already used to the rapid changing nature of technology should embrace mobile payments, especially NFC, to pay for things such as tickets, mobile services and digital goods. This is going to be a global phenomenon as all market regions of the world are expected to see a huge rise in the use of mobile payments within the next 3 years.
Contributed by CreditCardCompare.com.au, creators of a recent infographic about mobile payments.