Mobile Payments, Digital Wallets and NFC Technology

Mobile payment has transformed the shopping experience by enabling a two-way conversation between merchants and consumers at both the counter and throughout the store. This includes validating and collecting payments on one end, while authentication is conducted on the other. Ultimately, this innovative approach is increasing profits for merchants and providing more incentives for customers.

Mobile Payments- Mobile Payments encompass a diverse array of services, including mobile money, mobile banking, mobile commerce, mobile micro-insurance, mobile micro-savings and credit, mobile data science, and mobile financial services, bolstered by the establishment of a robust mobile credit bureau, also known as a mobile financial clearing bureau. In this segment, we’ll hone in on mobile payments, exploring both the inherent opportunities within this service and additional prospects that have emerged under the broader Mobile Financial Services umbrella, now recognized as an independent service in its own right.

Mobile Payments and Digital Wallets

How I envision these services may be different for some, but I am sure most of us have the same mindset. I have a very strong belief that “if you are looking for the next big thing and you are also looking where everyone else is, you are looking in the wrong place”. If we draw a hierarchy of such services, it will look something like the one below.

  • Entry of Industry Giants: The mobile payment landscape witnesses a surge in excitement with major players like Apple, Google, Microsoft, and Samsung stepping in, offering not just a roadmap but a promise of significant activity and enjoyment, perhaps even some noteworthy developments akin to fireworks.
  • Tsunami in Mobile Payment Market: The current state of the mobile payment market is often likened to a tsunami, symbolizing a powerful and impactful force, a term well-acknowledged in technical circles.
  • High-Speed Transfer Protocols: Among several available UDP-based transfer protocols designed for swift transfers over high bandwidth delay network paths, mobile payments play a crucial role. These solutions empower end-users with seamless access to services such as airtime top-up, bill payments, and merchant transactions.
  • Diverse Access Channels: Mobile payment platforms typically provide users with versatile access options, spanning the Web, mobile apps, POS systems, USSD, NFC, QR Codes, SMS, and more. This diversity ensures a convenient and inclusive user experience.
  • Security Prioritization: In the face of rising security threats in the mobile payment domain, safeguarding merchants, acquirers, and service providers becomes paramount. Ensuring their empowerment with new commerce opportunities and secure experiences is not just a priority but the highest priority for any robust mobile payment solution system.

Excitement increases many folds when the big Bro’s get into play i.e. Apple, Google, Microsoft and Samsung and show the industry a path to walk on and a guarantee that will have lots of action and fun (Some time little more exciting i.e. fireworks). With the power of mobile payments solutions, the end-user can easily derive benefits from services like Airtime top-up and Bill Payment, Merchant Payments.

Mobile Payments & NFC Technology

Mobile payments are an opportunity for product and service companies, merchants, billers, service sellers, banks, and telcos to engage with customers in real time. Mobile payment through mobile wallets, straight from a bank account, or through a soft credit card or system is another interesting question or point of debate, as each one has its own pros and cons. Mobile payments may or may not happen through a mobile wallet attached to it, which is very interesting and debatable, as mentioned before, but before we go there, we need to see the reasoning for both scenarios. First, with mobile wallets, the questions are now how to secure them, how to trust them, and what will happen to unused money.

Mobile Pay

In the second scenario, if there is no mobile wallet and money is pulled directly from a soft card or bank account every time a transaction happens, New specifications and use cases on the interface level are being released for mobile payment adoption and implementation, which continue to increase. According to survey data from Google, there are currently over one billion NFC-enabled devices and almost the same number of 3G POS machines in the global marketplace, expected to reach 2 billion by the end of 2016.

  • Customer Incentives for Loyalty: Offering customer loyalty points or discounted coupons establishes a direct and engaging relationship between consumers and merchants. This strategy not only encourages spending with a specific merchant but also fosters a deeper understanding of consumer spending habits and preferences.
  • Seamless Mobile Purchases: Facilitating purchases directly from mobile devices provides consumers with a convenient and frictionless buying experience. This streamlined process contributes to increased spending with the merchant and establishes a secure connection with the consumer’s account.
  • Data Insights for Personalization: Through these transactions, merchants gain insights into consumer spending habits and preferences. This valuable data enables personalized offerings and a tailored shopping experience, strengthening the bond between the consumer and the merchant.
  • Security Measures: Prioritizing the security of sensitive information is non-negotiable. Encryption and tokenization are essential tools for safeguarding customer data, meeting the latest PCI requirements (PCI 4.X approved) wherever applicable. This ensures a secure environment for all transactions.
  • Merchant Support: Merchants require robust self-care portals equipped with user-friendly interfaces to ensure consistent and seamless experiences. A simple and intuitive design facilitates efficient self-management, allowing merchants to navigate and utilize the system effectively.
  • Diverse Customer Interaction: Providing merchants with multiple form factors enhances the variety of customer interactions possible. This flexibility accommodates diverse preferences and contributes to a richer customer experience, ultimately benefiting both merchants and consumers.

The software application should be powerful enough to drive and empower merchants for their day-to-day needs at their end and control things like the reversal, promotion, and evolution of each payment terminal in their store or stores.

Points to Note:

All credits, if any, remain with the original contributor only. We have covered all the basics around mobile payment as a payment service. The business models and the importance of service quality In the next upcoming post, we will talk about implementation, usage, and practice experience for markets.

Books + Other readings Referred

  • Research through open internet, news portals, white papers and imparted knowledge via live conferences & lectures.
  • Lab and hands-on experience of  @AILabPage (Self-taught learners group) members.

Feedback & Further Question

Do you have any questions about AI, Machine Learning, FinTech, Data Science or Big Data Analytics? Leave a question in a comment section or ask via email. Will try best to answer it.

– Where do we go when the era of central banking dies? Because it’s about to die — by decentralizing organisms that are dynamically scalable and software that can be modified. I am very confident that software systems can do adoption jobs dynamically. As mobile payment systems head toward primetime, we could be witnessing the beginning of a profound shift in payment culture.

As mobile payments evolve, technology providers and financial institutions are working on ways to enhance security and boost customer trust. Precautions include adding new layers of fraud protection, such as tokenizations, where transactions can be completed without sharing sensitive data like a credit card number and its expiration date.

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Posted by V Sharma

A Technology Specialist boasting 22+ years of exposure to Fintech, Insuretech, and Investtech with proficiency in Data Science, Advanced Analytics, AI (Machine Learning, Neural Networks, Deep Learning), and Blockchain (Trust Assessment, Tokenization, Digital Assets). Demonstrated effectiveness in Mobile Financial Services (Cross Border Remittances, Mobile Money, Mobile Banking, Payments), IT Service Management, Software Engineering, and Mobile Telecom (Mobile Data, Billing, Prepaid Charging Services). Proven success in launching start-ups and new business units - domestically and internationally - with hands-on exposure to engineering and business strategy. "A fervent Physics enthusiast with a self-proclaimed avocation for photography" in my spare time.

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