What are the types of mobile payment technologies and platforms and how do they work?
Mobile payment technologies are services that enable consumers to make purchases via smartphones, tablets, or wearable devices using various methods, such as credit cards, bank accounts, mobile wallets, or cryptocurrencies. Mobile payment platforms are the applications or systems that facilitate these transactions, such as Google Pay, Apple Pay, PayPal, or Cash App. In this blog post, we will explore the different types of mobile payment technologies and platforms and how they work.
Types of mobile payment technologies
According to a recent study, there are four main categories of digital payment technologies: card payment, e-payment, mobile payment, and cryptocurrencies. Each of these categories has its own features, advantages, and challenges.
- Card payment: This is the most common and traditional type of digital payment technology, which involves using a plastic card with a magnetic stripe or a chip to store payment information. The card can be swiped, inserted, or tapped on a terminal to complete a transaction. Card payments are widely accepted and secure, but they also have some drawbacks, such as fraud risk, high fees, and environmental impact.
- E-payment: This is a type of digital payment technology that uses the internet to transfer funds from one account to another. E-payment can be done through a web browser or a mobile app, using various methods, such as bank transfers, e-checks, or buy now, pay later (BNPL) solutions. E-payment is convenient and fast, but it also requires internet access, user authentication, and data protection.
- Mobile payment: This is a type of digital payment technology that uses a mobile device to initiate and complete a transaction. Mobile payment can be done through various methods, such as mobile wallets, SMS payments, mPOS (mobile point-of-sale), or mobile P2P (peer-to-peer). Mobile payment is user-friendly and versatile, but it also depends on the availability of mobile devices, networks, and compatible terminals.
- Cryptocurrencies: This is a type of digital payment technology that uses digital tokens or coins that are created and exchanged through a decentralized network of computers using cryptography. Cryptocurrencies can be transferred directly from one user to another without intermediaries or central authorities. Cryptocurrencies are innovative and transparent, but they also face challenges such as volatility, regulation, and scalability.
Types of mobile payment platforms
There are many mobile payment platforms that enable consumers to use different types of mobile payment technologies. Some of the most popular ones are:
- Google Pay: This is a mobile wallet app that allows users to store their credit cards, debit cards, gift cards, loyalty cards, and bank accounts on their Android devices. Users can make contactless payments in stores or online using NFC technology or QR codes. Google Pay also supports P2P transfers and integrates with other Google services.
- Apple Pay: This is a mobile wallet app that allows users to store their credit cards, debit cards, gift cards, loyalty cards, and bank accounts on their iOS devices. Users can make contactless payments in stores or online using NFC technology or Face ID/Touch ID. Apple Pay also supports P2P transfers and integrates with other Apple services.
- PayPal: This is an e-payment platform that allows users to link their bank accounts, credit cards, debit cards, or PayPal balance to their PayPal account. Users can make online payments on websites or apps that accept PayPal or send money to other PayPal users. PayPal also offers a mobile wallet app called PayPal Mobile Cash that supports contactless payments and QR codes.
- Cash App: This is a mobile P2P platform that allows users to send and receive money from other Cash App users using their phone number or email address. Users can also link their bank accounts or debit cards to their Cash App account and use it to pay in stores or online. Cash App also supports cryptocurrencies and offers a Cash Card that works like a debit card.
How mobile payment technologies and platforms work
The working principle of a mobile payment technology depends on its type and method. For example:
- To make a card payment using a mobile device, the user needs to have a card reader or a terminal that can read the card information from the device using NFC or RFID technology. The card information is then encrypted and transmitted to the card network for authorization and settlement.
- To make an e-payment using a mobile device, the user needs to have internet access and an account with an e-payment platform or service provider. The user then enters their payment details into a checkout form on a website or an app and confirms the transaction. The e-payment platform or service provider then processes the transaction and transfers the funds from the payer's account to the payee's account.
- To make a mobile payment using a mobile wallet app, the user needs to have an NFC-enabled device and a compatible terminal. The user then opens the mobile wallet app and selects the payment method they want to use. The user then holds their device over the terminal and authenticates the transaction using a PIN, fingerprint, or facial recognition. The mobile wallet app then communicates with the payment network or service provider and completes the transaction.
- To make a mobile payment using a mobile P2P app, the user needs to have an account with the mobile P2P platform or service provider and the recipient's phone number or email address. The user then opens the mobile P2P app and enters the amount and the recipient's details. The user then confirms the transaction and the mobile P2P platform or service provider transfers the funds from the sender's account to the recipient's account.
Conclusion
Mobile payment technologies and platforms are transforming the way consumers pay for goods and services. They offer convenience, speed, security, and flexibility to both buyers and sellers. However, they also face some challenges, such as compatibility, regulation, adoption, and education. Therefore, it is important for businesses to understand the different types of mobile payment technologies and platforms and how they work, so that they can choose the best ones for their needs and offer a seamless shopping experience to their customers.
Use Case – Fuel Retailer in APAC 700+ service stations | 30-50 new stores per year Problem • Existing OPT/IPT had reached end of life, desire to consolidate terminal estate and modernize payment platform • Replacement of 2,000+ IPT and 6,000+ OPT to android-based terminals Goals • Consolidation and modernization of terminal estate with enhanced integrations with banks, cards including fuel, loyalty, eWallets and APMs. • Produce retrofit kits for major fuel dispenser brands Results: • New 8,000 android-based terminals • Superior core network connectivity uptime • Operational speed, reliability, and security were dramatically improved • Sites running smarter and faster • New capabilities enabled and supported including loyalty payment acceptance and at the pump advertising Solution: End to End Managed Payment Infrastructure Payment Acceptance • Integrated, android-based Outdoor Payment Terminal (OPT) Kits and Indoor Payment Terminal (IPT) - Fully PCI PTS 6.x compliant, integrate with a range of fuel pump providers and feature a full color touchscreen compatible with digital advertising options. • QR Code acceptance for local wallet – TouchnGo , Boost, GrabPay acceptance Google Pay and Apple Pay also supported • Loyalty Card & Fleet Card Acceptance Network Connectivity • Highly redundant and always-on secure connectivity through TNS’ PCI DSS Certified network Transaction Orchestration • Integration to acquirers/processors and PSP partners agnostically • Support for credit/debit/prepaid and gift cards, alternative payments, including wallets and other account-based methods • Smart routing capabilities to ensure cost efficient, secure and reliable payment • Digital signage and advertising platform integrated with payments Delivered as a Service • Self-servicing platforms to manage and view transactions • 24x7x365 monitoring with four Network Operations Centers (NOCs) globally • End-to-end operational, fail-over, fulfillment and security support services • Installation & field services managed by TNS Integrations • Forecourt controller integration with the OPTs/IPTs • Integration with an advertising multi-media digital platform to enable targeted promotions at the pump • Integration to third-party POS/BOS to generate reports utilizing transaction information Security and Certifications • EMV certified and P2PE validated solutions • Level 1 PCI DSS certified provider Contact Us for More Information.
