Mobile payments as the name suggests, is simply making payments through your mobile phone. The concept is fairly known now considering almost ALL leading vendors and merchants are adapting to this new mode of payment. But for novices, Mobile Payments are payments using the NFC chip in your smart phone and simply tapping it to NFC Reader at the payment counter. Believe me; it is as easy as it sounds! A pre-requisite however is to have your E-wallets (or service/application that bridges your financial information with the NFC payment reader and authorizes the withdrawal amount of your secure transaction).
So what do you gain by making payments through your mobile device? Let me paint certain facts which you probably are still unfamiliar with about NFC payment:
You Gain Security
Contrary to what many people think, mobile payments are more secure than making transaction through your credit card. First all data is transferred through encryption so the merchants cannot gain access to your information. Secondly, it uses pin code security so only you have the key or password to your money.
Image: NFC Mobile Payment Process
Additionally, try making an online payment through credit card where you have to enter each and every detail of your account to the merchant’s website. Now, with mobile payments, you have the additional layer of masking your account information through the e wallet that has your personal financial information safe inside. Thus, mobile payments are a much secure option.
Gained Consumer Options
With the option of making payments through your mobile phone, you have the benefit of NOT carrying cash at all. Say you are shop keeper who has NFC reader installed. Your customers now can no longer say that they can’t buy because they don’t have the money. In the same sense, if you’re a purchaser, you need not worry about keeping cash everywhere.
Moreover, remember from a customer’s point of view, sometimes your credit card may be declined if there is a problem at the bank or you cannot remember your pin. With this NFC technology, you have the option of linking more than one financial institute with your phone. Even if your cell phone battery is dead, remember the NFC chip within your smart phone is capable of operating with your cell phone switched off.
Better Financial Protection against Theft
The risk of physical theft is always present, be it your wallet or your mobile phone. In case of robbery, a credit card is simpler to use at payment counters (as it requires a signature and that’s it). However, your NFC device is much safer! In a comparable scenario, your NFC device would not let anyone make a purchase without a PIN code that is still safe with you. Hence, the chip in your phone prevents accidental or intentional tampering and will deny unauthorized access.
Buying Choices Tapped Through Your Present Location
Would it not be nice to know the best deals, best food, and discounts, compare prices or simply buy cheaper grocery when you are within a shopping area? Well, this reality will hit big by 2015. In a poll conducted by Mobile Payments Today, examining the customer shopping trends, 25% customers agree that they would like to know more as they enter a shopping mall.
You Do Not Carry Your Wallet
NFC uses RFID tags that not only allow you to make electronic payments but also stores info about saving tokens, giveaways and customer loyalty card and applies them whenever expenditures are made. Check out how a journalist was able to live one whole month with no wallet.
Gain Savings By Not Over Spending
This is where NFC gets genuinely strong. It not only handovers your money to merchants and keeps your coinage secure; the applications using NFC can offer details of your spending, your shopping routines and customs.
Gain Contacts and Social Feeds
While we will never run of commercial cards, NFC chips have the feature of storing information of your contacts so you can network fearlessly.
Gain Access Control
Who among us has not lost keys your station or residence? NFC-enabled phones allow us to open our locked doors. Users of the NFC just move their cellular device, instead of an authorization card, at a reading device, as a permit for access to workrooms, work spot, dwelling or other closed areas.
Image 4: Secure Locking & Unlocking Doors
About the Author:
Umar Jamshed is an IT expert and a former consultant with The World Bank. He is a graduate of Curtin University, Australia. He works for Boloro which is a mobile payment network.