Everybody agrees that mobile phones and applications are the hottest topic in technology. There is one area in particular however that is gaining a lot of popularity and will continue growing in the next few years; I am talking of course about mobile payments. This technology allows the purchase of digital content such as ring tones or music and hard goods such as books, using a mobile phone.
There are currently 4 main models used for mobile payments;
- Premium SMS (PSMS) – With this model, an end user can choose to buy a good with a mobile phone from a content provider’s website or by sending a text message to the merchant’s shortcode. The content provider will then send a premium SMS and the payment will be added to the user’s mobile phone bill. Sometimes the SMS sent by the end user to the shortcode is enough to bill the consumer without the need of receiving an SMS for the billing.
- Direct Mobile Billing – In this model, the end user selects the mobile billing option when making a purchase at an e-commerce site and then has to go through an authentication process involving a secure pin and a one-time password, after which the consumer’s mobile’s account is charged for the purchase.
- Mobile web payments (WAP) – The Wireless Application Protocol (WAP) is used for this model. The end user navigates through web screens and possibly other applications downloaded and installed on the mobile phone to make the payment.
- NFC (Near Field Communication) – This system is still relatively new and it is expected to become one of the most popular ways to make payments with a mobile phone. It involves something as simple as waving the phone on a reader enabled with NFC to make a payment. Some smart phones already contain NFC chips to make use of this new technology.
Top companies such as Google are adopting these technologies and building their own products such as the Google Wallet, so stay tuned for new products and start betting on which will be the future winner in the mobile payments arena.
G+ professional community created an infographic describing how experts see mobile commerce in the next four years, focusing their attention in the NFC technology. Take a look and picture yourself waving your phone to buy a goodie because NFC is almost here;