Mobile Payments To Touch 190 Million Users Worldwide By 2012 – A Detailed Look At Types Of Mobile Payments

Mobile payment (M-payment) is the latest trend that is developing fast to be the next mainstream payment method. Instead of paying by cash,credit card,cheque people can pay for various products and services with their mobile phones using Mobile Payment. This is being adopted as a preferred payment method as it eliminates the hassle of cash , the insecurity of credit cards and the delay of cheques.

According to a report by Gartner, a global research firm,the number of users making payment via mobile will be more than 190 million  by the end of 2012 . This will be approximately 3% of the mobile users ,enough to consider M-payment as a mainstream payment method. There are around 43.1 million Mobile payment users as of now and will grow to 73.4 million by the end of 2009 recording a growth of 70%

People can use Mobile Payment to pay utility bills,shopping bills,recharge mobiles,point of sales,purchase movies ,insurance premiums, bank transfer and whatever one can think of in relation to money payments. There are a number of benefits which will motivate people to adopt Mobile payments solutions.

1. Convenience – People can pay and transact on the move. Imagine paying utility bills while stuck in a traffic jam.
2. Security – It is much secure as compared to cash or credit cards.If any pick pocketer has stolen your wallet he can use credit card( thanks to lame security by credit card companies) until you get it blocked. But if you loose your mobile he cannot use it until and unless he has your pin and some advanced systems are even equipped with voice recognition systems.
3. Easy – What can be more easier that paying by the press of a button of a device that you carry most of the times.
4. Fast –  It is very fast as compared to cheques or credit cards and open seamless possibilities.
5. Proven – It is growing at a very fast pace and many companies are providing the services. I myself used m-check couple of times to pay Airtel bills and it was very fast and provides immediate status of the transaction. I even saved Late fees by using m-check while on travel
6. Higher Customer Satisfaction and reliability- Customers get instantaneous reports and feedback thus keeping a tab on the payments made. A guy like me who is skeptical about someone stealing my credit card record online ,checking credit card accounts twice a day will feel lot relaxed whenever he gets notification of every penny spent.

Basically there are four modes which can be used in mobile payments

1. Sms based Transactions- This is based on sending sms for payments. This is the easiest and least secure method as any intelligent hacker can read the sms and get the details. This is also less reliable as the sms services are less reliable can vary on the sms server traffic. On Christmas,Diwali the sms server is already loaded enough ,you never know will your payment be made in time or not.
2. Direct Mobile Billing- In this method users mobile account is charged for the payment made. This is a more secure form of billing as it is attributed by two way authentication. It is generally used by e-commerce sites like gaming etc to make payments.
3. Mobile web payments ( WAP)- This uses a web pages or additional software on user mobile to make the payments.It used WAP( Wireless access protocol) to make the payments. Services like ngpay uses this kind of payment mode.This method is comparatively more secure and works better.
4. Near Field Communication-Most advanced kind of payment service that is still in inception phase. For this a smart card is installed in the user equipment that enables the use of mobile in shopping centres,toll bridges etc as a smart card. Imagine instead of using 4 smart cards you use daily to cross various toll bridges you just show your mobile phone ,voila you are good to go.

Mobile payments have a different scope for different markets, There is lot of difference how Mobile Payment will evolve in developed and developing countries. In developed countries like US it is less promising and has many other challenges due to strict regulations and availability of services like internet and computer to most individuals. However in developing countries in Asia/Pacific like Japan and India, where the penetration of Internet is very less and lot of people don’t even have bank account or an online  bank accounts this emerges as a promising service. . The sudden sprout of various players like M-pay,Ngpay,Paymate, Mcheck in India itself suggests that there is lot of scope for the growth of Mobile payment services but many points like security concerns, central regulation authority and user adaptability need to be taken care before it can rock n roll.