Mobile Payment And NFC To Make The Wallet Redundant In Near Future

by Rakesh on December 28, 2012

With the growth of mobile technology, there are newer and better updates arriving almost every month. The latest and hottest mobile technology topic currently is mobile payments and the NFC technology. Looking at the ease of use, low cost implementation and safety, it is safe to assume that mobile payment procedures will replace the traditional credit and debit card payment system pretty soon.

Mobile payment is the technology that lets you pay for the things you buy with your mobile phone. No cash, credit or debit cards are required for these transactions. Apart from online digital content, mobile payments can also be used for general expenditure like grocery shopping or filling up your car with gas. Web technology companies like Google, several banks and other merchant companies and mobile service providers have collaborated together to make mobile payments a reality. Combining all mobile payment services, the total market of mobile payments is expected to cross the 600 billion mark in 2013. There are several mobile payment methods followed in various parts of the world. Some popular ones are mobile billing, NFC, mobile web payments and SMS based transactions.

Direct Mobile Billing Services

This mobile payment method lets users shop online without the need for entering sensitive credit and debit card details over the web. Instead, using a onetime password and secure pin, the transaction is completed and the payable amount is added to the user’s telephone bill. This method does not require any online registration and the involvement of banks. Direct mobile billing is very popular in many Asian countries due to the fast and easy payment process. It is also highly secure due to the use of two factor authentication. According to recent data, in some parts of Asia almost 70% of all online purchases are done through direct mobile billing.

Mobile Web Payments Service

This technique requires the customer to pay through a webpage opened in their phone via internet services. Some variations of the method may also require download and installation of additional software. While paying, the user is supposed to enter his credentials and payment details onetime and they are then stored for later use. After the payment account setup is finished, the payments can be made by directly adding the payable amount to user’s mobile bill. This is also a very popular payment method and some network operators even make mobile web payment mandatory. It is fast and easy to access as users can bookmark frequently used payment pages and thus speed up the subsequent payment processes.

Near Field Communication Technique (NFC)

It is the most talked about and fastest growing mobile payment technique offered today. The technology uses RFID technology to establish communication between two devices by bringing them close together without the need for setting up Bluetooth or infrared networks. An NFC chip also known as “Tag” is used in NFC powered devices to institute the communication. In mobile payment scheme, the idea is to establish NFC reader payment devices similar to credit card swipe machines. The users need to bring their NFC powered mobiles close to the readers and contacts get created automatically between the two devices. Stored data about user’s credit and debit cards are then read from the cellphone directly and transactions are processed according to that.

To implement NFC payment, an online wallet service like Google Wallet has to be present in the mix. Google wallet stores all payment data and credit and debit cards numbers that are to be used by the NFC reader. Prior to establishing NFC communication, the user needs to open Google wallet service on his device so that the relevant data can be read properly. This additional step of opening Google Wallet has been a drawback for the process and efforts are being made to eliminate this step altogether and create a direct relationship between mobile phones and NFC devices. Many retail chains in the US have already setup NFC devices and others are expected to follow the same mode. By 2013, almost all major retail chains and shopping plazas in developed countries are expected to implement NFC payment services.
Smartphones and tablets have made the world a simpler place to live in by letting us do more and more with them every day. In the case of payments, the quantum leap from credit and debit cards to mobile payment is an expected and welcomed one. Successful implementation of mobile payment can decrease loss or theft of cards significantly and make the payment processes faster and more sheltered. Hence it is a first-class idea for mobile users to welcome the advent of mobile payment techniques with open arms.


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