Current mobile payment methods

Direct mobile billingYou can use this mobile billing method during “Checkout” at an e-commerce site. With two forms of authentication (a PIN and password), your mobile account is charged for the purchase. Note that no credit/debit cards or pre-registration at an online payment solution such as PayPal is required. You do not need a bank […]

Direct mobile billing
You can use this mobile billing method during “Checkout” at an e-commerce site. With two forms of authentication (a PIN and password), your mobile account is charged for the purchase. Note that no credit/debit cards or pre-registration at an online payment solution such as PayPal is required. You do not need a bank account to use this service. This kind of service is available in countries like South Korea, but not in the U.S. or Nigeria. The Kenyan-based M-Pesa service is perhaps one of the most elaborate examples of direct mobile billing.
 Mobile credit card payments
Here, you simply enter your credit card details into a mobile phone to make purchases. Samsung’s newly-acquired LoopPay service belongs in this category somewhat, and not in the NFC-based approach used by Apply Play or Google Wallet. With LoopPay, a small piece of hardware is added to your phone which, with the aid of an app, transmits codes to magnetic stripe readers on the point of sale (POS) devices in stores. This way, the POS is fooled into thinking you’ve swiped your magnetic stripe card. As John Gessau pointed out in the 26 February 2015 issue of Payment Source (online) magazine, “LoopPay claims to be superior to Apple Pay in 3 key areas. It has acceptance at 90% of retail locations, while Apple Pay is accepted at less than 5%; LoopPay supports more than 10,000 issuers as well as gift, loyalty, and private label etc. (Apply Pay supports 90 issuers, though that represents a majority of card issuance in the U.S.); and LoopPay supports a wide range of handsets (Apple Pay only the latest Apple devices).” Gessau, however, extensively discusses the current loopholes in LoopPay’s approach.
Mobile web payments
Using technologies based on Wireless Application Protocols (WAP), you can use web pages or other downloaded applications to make payments on your mobile device. You may still need a credit/debit card or pre-registration at an online payment portal (PayPal) for this type of payment method, except in the case that your mobile account is directly charged through a mobile network operator. In 2012, Ericsson and Western Union partnered to expand the direct operator billing market, so that mobile operators could include Western Union Mobile Money Transfers as part of their mobile financial service offerings.
NFC-based payments
This type of mobile payment is contactless and is what is often referred to as Mobile Wallets. It uses Near Field Communications (NFC) to pay for purchases made in physical stores or transportation services. Your payment could be deducted from a pre-paid account or charged directly to a mobile or bank account. Mobile Wallet is a sophisticated “tap-to-pay” or “wave-to-pay” technology. You do not need to log in to any websites and you can pay for your purchases by simply waving or tapping your phone. Mobile Wallet could also be a credit card reader (app) that has been pre-loaded into your smartphone or tablet, and you pay for goods without ever pulling out your wallets or phones. In some systems, face recognition technology forms a part of the package, such that when you walk into a store (located in the network), a register shows the picture of your face, which is used as authentication for payment.
Working with the major credit card companies (Visa, MasterCard, Discover, American Express), Google developed its Android, NFC-based Wallet app. Apple Pay service that came with iPhone 6 in September 2014 belongs in the category of NFC-based Mobile Wallets.
Isis is an outcome of a collaborative venture between America’s largest cell phone carriers: T-Mobile, Verizon, and AT&T, that allows you to pay for transactions at the counter by tapping on your phone. You will need an NFC-enabled smartphone to use the system and will also require a SIM-based “security element.”
As a counter-example, some big U.S. retailers are backing an alternative mobile wallet solution called CurrentC, which will be rolled out in 2015. It relies on a different technology. Some members of that consortium, which include Wal-Mart stores, Target Corp., CVS Health Corp. and Rite Aid Corp., have “quietly turned off their NFC readers to block Apple Pay and other alternatives!”
Online wallets
Online solutions such as PayPal (Google Wallet, also) provide you with online mobile options. For your first payment, you register and enter your phone number, to receive an SMS containing a PIN code. You simply enter the code into your phone to authenticate your phone number, after which you enter your credit card information. You only need to enter your Pin for subsequent payments.
QR Code payments
Quick Response (QR) codes are two-dimensional barcodes designed to contain meaningful information such as text (messages) or a website URL, which you can quickly load into your smartphone.  The apps utilize QR codes as an open format for a payment information exchange between buyer, seller, and the card merchant. That is, a messaging service can deliver QR codes which can be scanned for confirmation of payment by a merchant. This can also serve as an electronic ticket to cinemas or game shows.
SMS-based transactional payments
Here, you send a payment request by sending a text message (SMS) to a short code. A charge is applied to your phone bill or your online wallet. The merchant is informed of the success of your payment, for him to release the goods that you have paid for. The goods in these kinds of transaction are frequently of digital form: purchased music, ringtones, wallpapers etc., which the merchant can easily send to you electronically.