What Is the Most Popular Type of Mobile Payment 2
What Is the Most Popular Type of Mobile Payment It may not be as glamorous as Square’s mobile credit card acceptance service.
How direct operator billing works is the Most Popular Type of Mobile Payment:
or as well-funded as Google Wallet and the NFC-enabled Isis, but the blandly named approach to mobile payments beats “direct carrier billing.
” they are useful in penetrating the market, if not in attracting media attention. And here at UniBul, we’re as guilty as anyone for failing to cover what’s going on in the carrier billing world.
In fact, a quick search tells me that apart from M-Pesa, which is an odd case, the last time we wrote about this topic was about two and a half years ago.
This morning I came across a recent infographic created by Mobile Payments Today that reminded me that direct carrier billing is still very prevalent and doing better than ever. The technology offers developers a convenient way to get paid for their apps, the authors remind us, and its growth is being accelerated by the rapid adoption of smartphones around the world What Is the Most Popular Type of Mobile Payment.

In addition, direct carrier billing is “particularly useful for people who don’t have access to basic financial services, such as consumers in developing markets or younger consumers without bank or credit accounts.”
The authors tell us that in some countries, people use carrier billing to pay for things “like selling tickets and feeding parking meters.” And this blogger can confirm – I connected my phone to a parking meter in a European country and the fee was charged to my phone bill. But let’s look at the graph – it’s beautiful What Is the Most Popular Type of Mobile Payment.
But first, let’s briefly review how carrier billing services work. As an example, I will use Boku, which is the largest specialist in direct invoicing. Boku allows users to make payments online at participating websites by entering their mobile phone number at checkout. Boku will then send you an SMS asking you to confirm the transaction.
Answer “Y” and you’re done. The sale amount is then added to your monthly phone bill. Here is Boku’s own visual representation of the transaction process:
Here are some of the key points in the Mobile Payments Today infographic:
y all accounts, Boku seems to be doing well. As early as August 2011, the company claimed to operate in “60+ countries with over 220 different carriers”. Now, Boku boasts that the number of carriers has increased to 260 and that it is “the only carrier billing company that can offer you the benefit of partnering with every major global carrier group.”
Here’s a closer look at the carrier’s direct (or “bill-to-mobile” approach, as they call it here) full head-to-head comparison between Boku and its biggest rival — PayPal’s Zong (click image to enlarge).
How direct operator billing works
As we noted earlier, there are two big reasons for the success of direct operators in selling virtual products. The first is that these products are mainly bought by young consumers who usually have no other payment options available.
Another reason is that the very high fees that merchants charge for accepting Boku payments (around 30 percent, but can be as high as 40 percent, compared to around 2.5 percent for credit cards) are acceptable in this case because high gross margins (over 90 percent) on virtual goods and lack of alternatives.
The most popular type of mobile payment
1. More than 95 percent of the world’s population has cell phones, compared to less than 49 percent with bank accounts and just over 30 percent with credit cards What Is the Most Popular Type of Mobile Payment. Therein lies the market opportunity for direct carrier billing: for consumers without a bank account, it is one of the rare ways to make electronic payments What Is the Most Popular Type of Mobile Payment.
2. Apps are more easily monetized with direct billing. The authors tell us that direct carrier billing conversion rates are 5 times higher than credit card conversion rates. This is easy to explain: while with direct billing the consumer only needs to enter their phone number when paying, the credit card payment process involves entering their name, account number, address, security code and expiration date.
3. Direct billing revenue from app sales alone is expected to reach $11 billion by 2016 and $13 billion by 2017.
4. Direct carrier billing saw a 300% annual increase on Google Play What Is the Most Popular Type of Mobile Payment.
I should say that I am quite skeptical of the authors’ view that direct carrier billing has the potential to expand into the physical world. With processing speeds this high, it’s virtually impossible to achieve that kind of performance at the moment, although I imagine things may change at some point What Is the Most Popular Type of Mobile Payment .
However, even if processing rates were to drop enough to compete with credit and debit card rates, it is highly doubtful that carriers would want to expand their direct billing operations too much. You see, if they did, the carriers would quickly find themselves deeply involved in the consumer loan business with all the additional government controls and regulation that would entail. The carriers wouldn’t want that – they have enough as it is.
As a small business owner, you naturally strive to meet customers where they are, whether it’s stocking the right merchandise or offering convenient payment options. Mobile payment processing is fairly simple for a merchant, but it does require a bit of effort up front. This includes investing in a point-of-sale system that can handle contactless payments and digital wallet transactions.
What is mobile payment?
Mobile payment is a contactless payment method that involves a mobile device such as a mobile phone, smart watch or tablet What Is the Most Popular Type of Mobile Payment.
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These devices can run mobile wallet applications or peer-to-peer mobile payment applications. Or they can enable transactions via SMS.
Popular mobile wallet apps include Apple Pay and Google Pay. Popular peer-to-peer mobile payment apps include Venmo, PayPal, CashApp, and Zelle.
How does mobile payment work in brick-and-mortar stores?
In brick-and-mortar retail stores, customers often use mobile wallets to pay by mobile. This involves placing a smartphone, smart watch or tablet on a smart watch or tablet on a payment terminal.
The smart watch or tablet at the payment terminal can be the merchant’s mobile device, or it can be dedicated stand-alone hardware. In both cases, the terminal must include NFC (Near-field Communication) radio technology, which allows it to receive payment information from the device What Is the Most Popular Type of Mobile Payment.

From there, the terminals work much like they do when handling embedded smart cards. They send and receive a series of encrypted messages to the financial institution, freeing up funds for the payment to proceed What Is the Most Popular Type of Mobile Payment.
Only smart watches or tablets at payment terminals with an NFC radio can accept tap payments. (These terminals have a wireless payment icon that looks like a series of semicircles.) The terminals are all-in-one devices that also function as credit, debit, and gift card readers.
Some merchants may accept other types of mobile payments for in-person transactions. For example, a seller can accept payments from a peer-to-peer payment application such as PayPal or Venmo What Is the Most Popular Type of Mobile Payment.
5 types of mobile payments
Mobile payments come in five main forms. While each has its own unique features, they all achieve near-instant money transfer from one account to another What Is the Most Popular Type of Mobile Payment.
1. Mobile wallet
Mobile wallet services include apps like Google Pay, Apple Pay and Samsung Pay. These services run on computers, smartphones, tablets and smartwatches and link to a customer’s credit card, debit card or bank account. Once a person sets up a mobile wallet account, they can use these devices much like a credit card.
In a brick-and-mortar store, they can tap their device on a smart watch or tablet to a payment terminal equipped with an NFC radio. Online, they can use their mobile wallet account on the checkout pages of many merchants by selecting the mobile wallet icon (such as Apple Pay) from the checkout options.
2. Mobile peer-to-peer
Running on platforms like Zelle, PayPal, Venmo and CashApp, this type of transaction allows individuals to transfer money to other individuals through a mobile app or website. Some of these services—notably PayPal—have seen widespread adoption by small business retailers. This means you can pay the business owner using PayPal instead of using a credit card.
3. SMS payments
SMS payments allow people to pay by sending an SMS to a specific phone number. Americans, who largely own smartphones, rarely pay for SMS. However, in some parts of the developing world, SMS payments are widespread and widely trusted What Is the Most Popular Type of Mobile Payment.
4. Mobile e-commerce
Also known as m-commerce, this category describes any type of transaction that a person makes on a mobile device. If a shopper makes a purchase on their mobile device’s browser or a merchant’s proprietary app, it qualifies as a mobile e-commerce payment What Is the Most Popular Type of Mobile Payment.
5. Mobile point of sale
In a mobile point of sale (mPOS), the seller uses his mobile device as a smart watch or tablet at the payment terminal. Square offers the popular mPOS service. The company sells Square’s wireless reader, which merchants use for contactless and smart card transactions. Customers can insert a credit card into the chip reader, or they can hold the card or mobile device to the reader for an NFC transaction. At this point, your point-of-sale software will take over and transfer the payment information to the financial institutions and transfer the money to your account What Is the Most Popular Type of Mobile Payment.
As a small business owner, there are many benefits to accepting mobile payments. They contain What Is the Most Popular Type of Mobile Payment:
Comfort. Mobile payments remove the barrier to completing a customer’s purchases. Customers can pay conveniently by touching their phone or credit card at the point of sale, or they can transact online using their payment apps.
Speed. Financial institutions process mobile payments in the blink of an eye. Mobile checkout is as fast as a credit card transaction – if not faster.
Popularity. More and more customers are spending more money using mobile payments. In 2021, global consumers will spend $1.786 billion through mobile payments. Financial analysts expect that number to more than triple over the next five years.
Safety. Mobile payments are among the safest forms of trading. That’s because they’re done on mobile devices, which typically require some form of authentication, usually in the form of a fingerprint, facial recognition, or password. The devices also encrypt their transmissions, giving thieves a very minimal chance of intercepting customer data What Is the Most Popular Type of Mobile Payment.
isadvantages of mobile payments
While mobile payments offer many advantages to merchants and consumers, they have several disadvantages What Is the Most Popular Type of Mobile Payment.
Transaction limits for peer-to-peer transactions. Many mobile wallet providers limit their users’ in-person transactions, meaning merchants who want to accept payments from an app like Venmo may not be able to sell above a certain dollar amount.
This boundary helps protect all parties from theft and fraud. However, mobile wallets do not add purchase limits to retail purchases made at touch payment terminals. Retail customers who link their credit card to their mobile wallet will not experience any purchase limits set by the app when making a purchase in-store.
A specialized smart watch or tablet at the payment terminal required for mobile wallet transactions. Merchants need a modern smart watch or tablet at the payment terminal to accept touch-to-pay transactions in a brick-and-mortar store—a cost that not all small businesses can afford What Is the Most Popular Type of Mobile Payment.

Final thought s
As more and more shopping moves to mobile platforms, payment systems will make a similar shift. Always looking for convenience and flexibility, customers are increasingly using mobile payments – especially considering the level of security they provide What Is the Most Popular Type of Mobile Payment.
Sources
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