Mobile payment systems are an effective alternative to take care of your everyday financial transactions when you forget your cash or card at home. Since smartphones have become a regular part of our everyday life, forgetting a mobile phone is less likely than forgetting your wallet. In these instances, one can simply pay a restaurant bill by authorizing mobile transactions or transfer digital money to family or a friend who needs immediate money at a location you are far off from. There are various forms of mobile payment tools and options that make life easier.
Each mobile system is distinct in its way of function. Some systems require the presence of your smartphone close to the place of payment, while others require only the use of the internet for a financial transaction.
The most common categories of mobile payment systems that are used in a wide variety of places are:
Point of sale (POS) payment: In a retail store, during a purchase, one can use the POS system to finish a purchase of a good or a service. One simply has to tap the phone pre-loaded with the card details onto the card reader and authorize the payment with the simple tap of a button.
Mobile carrier payments: Every smartphone uses a phone carrier service, and almost all of these service providers give a wallet option. This allows for a customer to pay a bill by authorizing the payment either through a simple pin or text message and then pays the whole amount with the monthly phone bill that includes the cost of all such transactions.
Closed loop mobile payments: This form of payment option is vendor specific. In this case, one can simply log onto a company app on their phone which has an inherent payment option. Just simply place the order for the store online, say Starbucks, pay the bill, go the physical store, and walk away with the order without having to wait in a regular queue or go through the hurdle of payments.
While these mobile payment options are easy to use and free at most times, some vendors may charge a minimal transaction fee for certain specific transactions.