Question

1. What are the key factors that differentiate the different mobile payment systems? Which factors do consumers care most about? Which factors do merchants care most about?

Answer 1

Key Factors that differentiate the different mobile payment systems:

First of all we need to understand the term "Mobile Payment Systems" : It refers to any payment made using a mobile phone. Due to our ever-increasing smartphone dependence, various ways have been developed to allow consumers to pay conveniently through a phone. To put this in perspective, statistics show that a third of UK consumers are now using their NFC-enabled phones for contactless payments in stores. Apple Pay, with their ‘limitless’ transactions, has even caused a 11% increase in the average mobile transaction total in the last half of 2017, as more and more people feel secure using their smartphones for point-of-sale transactions. But there are more types of mobile payments than contactless phone payments, either for remote or face-to-face payments. Let’s look at the different ways you can pay with a mobile phone.

Now we will talk over different mobile payment systems. Some of the examples are:

NFC payments: NFC phones communicate with with NFC-enabled card machines using close-proximity radio frequency identification. The mobile phones don’t have to touch the point of sale to transfer information, i.e. money, but they have to be within a few inches of the terminal.NFC involves a direct, almost instantaneous transfer of encrypted data to point-of-sale devices, as opposed to chip and PIN technology that takes longer to process.

Mobile wallets: A mobile wallet (also called digital wallet) stores payment information on a mobile device, usually in an app. Mobile wallets can utilise different technologies in the payment process, most frequently NFC, but other modalities such as QR codes have been used by some services. A digital wallet like Apple Pay cuts across several categories, allowing contactless payments on card terminals (using fingerprint authentication via the phone), in-app purchases and payments on the internet. Example: Paytm, Mobikwik, Freecharge and many more.

Premium SMS payments: SMS payments simply means paying for products or services via a text message. SMS payments have been one of the most popular methods of using mobile phones to pay for goods or services, even for person-to-person payments. Many experts believed that due to the simple nature of SMS payments and the fact that all the user needs is a phone with text capability, SMS payments will continue to be a growth area in mobile payments. Phone Banking is a mostlu used example for premium sms payments.

WAP payments: WAP Payments simply means using the wireless application protocol (WAP) facility on your smartphone to connect to the internet and then using an online payment method such as PayPal or Google Wallet or simply entering your credit card details into the payment box on a company’s website.

So, the related definitions and usage details are easily differentiate different payment system. For example: NFC required two mobiles to be at a specific distant for payment transfer and we can transfer money remotly as well thru wap payment system.

Factors do consumers care most about:

BY CONSUMERS

Availability: As we know that everyone is too busy in their life. hence, everyone wants that he can manage his payments from any place at any time. So, it is the first must care factor everone consider.

Security: Everyone want to secured his transactions from any type of security breach. So, payment systems should be secured.

Privacy: In today's world the information security is most crucial thing to be secure. There may be any type of wrong use of Users information. So, Privacy is major part of factors to be mostly care about.

BY MERCHANTS:

Accessibility: As simple as to use payment system, it should be more popular between general population. Hence, Platform design should be very simple.

Glitches: No one wants that there payments should be in vain due to any other's mistake or technical fault. Hence, System should be free from any type of glitches.

Updates:The system should be integrated with day to day changes. Hence, there should be proper and regalar updates to the users for the smooth working and day to day integration.