Mobile Payments – Definition, Working Methods, And More

mobile payments


Mobile payments are any kind of payments initiated through a mobile phone. The source of fund could be anything – cards, bank account, mobile money (stored value account), prepaid account etc. It could be a part of mobile money, mobile banking, mobile wallets or any such service.

Payment shave has been evolving, especially with the introduction of online or digital payments in India. Being a part of the payments industry I can see an emerging wave of one payment method rising high.

How Does Mobile The Payments System Work ?

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The consumer uses web pages shown or more applications downloads and installing  on the mobile phone to kind a payment. It uses WAP (Wireless Application Protocol) as underlying technology and thus inherits all the advantages and disadvantages of WAP. Benefits include:

  1. Follow-on sales where the mobile web payment can lead back to a store or to other goods the consumer may like. These pages have a URL and can be bookmarked making it easy to re-visit or share.
  2. High customer satisfaction from quick and predictable payments
  3. Ease of use from a familiar set of online payment pages

However, unless the mobile account is charge through a mobile network operator, the use of a credit/debit card or pre-registration at online payment solution such as PayPal is still required as in a desktop environment.

Mobile web payment methods are now being mandate by a number of mobile network operators.

Direct Operator Billing

Direct operator billing, also known as mobile satisfy billing, WAP billing, and transferor billing, requires integration with the mobile network operator. It provides certain benefits:

  1. Mobile network operators already have a billing connection with consumers, the payment will be adds to their bill.
  2. Provides instantaneous payment
  3. Protects payment details and consumer individuality
  4. Better conversion rates
  5. Reduces customer upkeep costs for dealers
  6. Alternative monetization option in countries where credit card usage is low

What Is The Future Of Online Payments?

The mobile phone market penetration numbers cannot be matches by any other communication or computing technology today. In countries like India, China, various countries in South Asia and South East Asia, the mobile phone for all practical purposes is the computing and communication platform. Mobile payments are a natural extension to these mobile devices (apart from communication and texting).

Some very good answers have been given here on the US market, I will try to highlight a few points outside the US market, especially in the developing countries (read: markets) in Asia, Africa and the Middle East.

Branchless Banking which has seen immense growth in South Asia and Africa, is primarily driven on mobile devices. BB today represents perhaps the largest mobile payments segment that there is, and it is growing by leaps and bounds. Reason: The mobile device now allows the unbanks (whom are in millions) to have banking and payments facilities. Think Easy Paisa in Pakistan, or mPesa in Kenya or Grameenphone in Bangladesh. All these players provide a multitude of services relates to mobile payments.

How Many Types Of Mobile Payments?

There are many options available for online payments.

It depends on what type of payment you need to process.

For Purchases, bookings recharges etc.

  • Debit cards, Credit cards, Net Banking, E-Wallet, M-Wallet.
  • For Bank Transfer to other persons.
  • NEFT (Restricts to some amount)
  • RTGS (Generally more than Rs 200000/-)
  • IMPS (Immediate payment below-prescribe limit generally Rs 50000/-)
  • Mobile Transfer


Mobile payment Or online banking is a easiest method without going to bank. It is a blessing and needs some precautions. This has made our life very fast and easy. It has control the undue crowd in the bank. Our economy depends upon it. It has reduce the burden on banks. I see a bright future for it.

What do you think?

Written by Muzammil Khan

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