Mobile phones have never been so ubiquitous and never so smart. In fact, in some countries, there are now more mobile phones than credit cards. At the same time, the rise of e-commerce means customers are tempted to buy anything, any time. It is therefore logical that there have been so many attempts to develop various kinds of mobile payment systems.
In a booming market, there isn’t just a single mobile payment technology. Indeed, whether these systems allow customers to buy anything, anywhere, or retailers to sell something anytime, anywhere, many options are available, and new ones keep surfacing regularly. Mobile payment solutions are themselves, in a sense, always moving.
How can we define mobile payments? What are the different types of available solutions today? What mobile payment options should be accepted by a given business in priority and how can they been chosen? And which are the top providers of mobile or m-commerce solutions?
The ever-expanding spectrum of mobile payment
Mobile payment systems simply allow payments to be made or accepted anywhere. This simple definition covers a lot of different technologies.
What are mobile payment systems?
Mobile payment systems can be either any kind of systems which allows payments to be made anywhere, or accepted anywhere.
This definition clearly introduces a distinction between the customer’s perspective and the retailer’s perspective.
From a customer’s perspective, these systems can be any solution which allows payment with a mobile phone, in-store or online. These systems can be software of hardware. A close notion is therefore that of “M-commerce”.
From a retailer’s perspective, these systems represent all solutions which allow shop operators or tradesmen to accept payments anywhere. It therefore refers to different kinds of mobile card machines or mobile PDQ terminals.
Types of mobile payment systems and related devices
If we take that distinction between the customer-side perspective and the retailer-side perspective, many different technologies allowing different types of mobile transactions are now present on the market.
M-commerce solutions include:
- Those involving actual hardware built into the phone, like
- mobile payment through NFC chips, enabling “contactless payments”, as used by Google Pay or Apple Pay both use NFC, or
- through the flashing of QR codes, or
- through “magnetic secure transmission”, as used partly by Samsung Pay, using magnetic signals, or
- through “sound wave-based” payments, using specific sound signals to send encrypted payment data.
- Those involving third-party billing and payment collection by the network carrier on the mobile phone bill, like
- SMS payments or
- Direct carrier billing, by just sending the customer’s mobile phone number and processing identification steps.
- Those relying on mobile transfers, which are popular in some countries where banks have attached mobile shoppers’ and retailer’s mobile numbers to their account information,
- Those based on “e-wallet” or “mobile wallet” software solutions, which act as a central, secure virtual wallet enabling online payments through mobile payment applications, without the need for a credit card at each purchase. PayPal is originally an e-wallet, as is Apple Wallet, Mastercard’s Masterpass or Visa’s Visa Checkout.
From a retailer’s perspective, a mobile payment solution is either:
- A terminal or system which accepts the aforementioned payment systems,
- A traditional card payment terminal or PDQ machine with a built-in modem, which can connect to cellular data networks on the go,
- A solution relying on a card reader and a 4G or 3G-connected mobile phone or tablet, and related specific software, which then acts as an Electronic Point of Sale system.
Selecting relevant mobile payment services
In the UK, mobile payment services are now offered by a many different providers, and different categories of providers. If we only consider this type of mobile solution, even choosing the best mobile card machine is complex, and a few tips help making the selection easier. Our pick of the top mobile solutions providers is another resource to help make this selection.
How to choose the best mobile card machines
The first good idea is to try and get quotes for mobile payment solutions from a number of reputable terminal suppliers and using online services such as Companeo to centralize quote requests makes the task incredibly easy.
However, reading and understanding these quotes might be difficult, so here’s a few tips to find one’s way:
- It’s normal to compare card machine hardware specifications, such as battery life and payments accepted (new payment methods like NFC, Google Pay, Apple Pay, “magnetic-secure” and “soundwave-based” payments might not be standard)...
- ...but it’s even more essential to evaluate the full merchant solution, with financial services necessarily attached such as the merchant account,
- Take the time to forecast the cashflow generated by mobile transactions, in terms of number of transactions, average value of transactions and payment method used,
- Carefully evaluate the pros and cons of renting and buying the solution, in the short-term, medium-term and long-term,
- Insist on getting the full information about mobile payment prices, especially for the transaction fees over each payment method, e-wallet or card used,
- Ask for a trial of the solution.
Finally, it should be remembered that the UK Cards Association provides information to business owners who need to know more about accepting debit and credit cards from customers, using mobile transactions and other ePoS systems. This is the trade body for card payments and represents major global financial institutions and the information they provide is therefore totally objective.
Top mobile payment providers
From a retailer’s point of view, there are two types of providers which need to be taken into consideration: those providing the solutions which will be used to accept payments, and those providing solutions which they should be able to accept with their software and hardware equipment.
The first category is mostly about mobile card payment terminals.
Current top mobile credit card machine providers in the UK include:
- PayPal Here
Besides, it’s also important for retailers to make sure that their equipment can accept top m-commerce payment solutions such as:
- Apple Pay
- Google Pay
- Visa Checkout
More information on Merchant services
- What’s the difference between fixed and mobile card payment terminals?