Mobile payments refer to any type of transaction made through a mobile device, such as a mobile phone or a smartwatch.
Today more than ever we are dependent on smartphones, and soon we can become dependent on payments too. Apple Pay and Google Pay have already entered our lives and, according to forecasts, within a few years, they will be used more and more.
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So, how to pay with smartphones and other mobile devices?
In this article, we illustrate all the methods to replace not only banknotes and coins but also payment cards.
POS Terminal Solutions
NFC smartphones communicate with terminals enabled with the same technology thanks to the identification of the radio frequency in the vicinity. The phone does not have to touch the POS to transfer information because it is sufficient to approach it by a few centimeters.
NFC technology consists of a direct and practically instantaneous transfer of encrypted data to payment terminals.
This is a way faster process than the chip & pin card. You don’t need to get your card from the wallet or purse. And the phone is perpetually in our hands.
To grasp the prospects regarding this payment method, it is enough to observe the smartphone manufacturers, in recent times increasingly oriented towards investing in the improvement of the aforementioned technology.
iPhone is considered the first device to use the fingerprint – a feature known as Touch ID – instead of the secret code to authorize the payment with Apple Pay. They also focused on Face ID, or facial recognition, to activate NFC simply by looking at the phone’s display.
In the meantime, contactless payments with smartphones and smartwatches have also become popular on Android devices thanks to Samsung Pay and Google Pay.
Sound Wave Payments
Sound waves-based payments, or sound waves, represent a cutting-edge solution that can theoretically work on all mobile devices. Transactions are processed through particular waves and contain encrypted information.
Sound waves are sent from the terminal to the phone to transmit the details of the transaction. The mobile phone converts this information into similar signals to finalize the payment. In this case, the smartphone uses a simple application and does not require additional components.
Sound wave payments are a more accessible solution in those countries which are not particularly developed, where the use of the latest generation of smartphones is not yet widespread.
Magnetic Secure Transmission (MST) payments represent another solution for paying with your smartphone. Samsung phones use both NFC and MST technology for contactless payment processing.
Signals emulating the magnetic strip of credit cards are sent from the phone and detected by the terminal. Some POSs may require a software update to accept MST, however, most modern devices are already enabled.
This particular payment method that emulates magnetic stripe cards is as secure as NFC technology, which is safer than traditional cards.
In-store and Remote Payments
Known as an e-wallet, mobile wallet, or digital wallet, it is simply an electronic wallet contained in a smartphone or smartwatch. It is installed as a normal application, to which it will be necessary to access using the credentials obtained when subscribing to the service.
Digital wallets can use different technologies. In most cases, NFC. In other cases, QR codes.
An example is the Apple Wallet application, where payment cards, loyalty cards, and digital tickets can be registered.
It allows you to pay online by authorizing the payment with your fingerprint, or in the shop by placing your phone near the terminal.
Quick Response (QR) codes are used in many fields, including marketing. Advertisements and product labels often carry this square-pixelated black and white code. By detecting it through the phone’s camera it leads to a specific web page.
Not everyone knows that the same codes can be used to pay in-store or online.
In the United States, this payment method is used in all Walmart stores, among the major American hypermarket chains. The well-known brand uses its own application, called Walmart Pay.
QR codes require some steps to finalize the transaction: unlocking the phone, opening the app, framing the code.
Unlike Apple Pay and Google Pay – which integrate perfectly with the operating system – this type of payment requires the opening of a third-party app (after unlocking the mobile phone) and framing the code exposed at the checkout.