Mobile payments (also referred to as m-payment, mobile money, mobile banking, mobile money transfer, and mobile wallet) are
|“||payments for which the payment data and the payment instruction are initiated, transmitted or confirmed via a mobile phone or device. This can apply to online or offline purchases of services, digital or physical goods.||”|
|“||purchases, bill payments, charitable donations, payments to another person, or any other payments made using a mobile phone. Mobile payments can be used by accessing a web page through the web browser on your mobile device, by sending a text message (SMS), or by using a downloadable application on your mobile device. The amount of the payment may be applied to your phone bill (for example, a text message donation), charged to your credit card, or withdrawn directly from your bank account.||”|
Mobile payments can be classified into two main categories:
- Remote m-payments mostly take place through internet/WAP or through premium SMS services which are billed to the payer through the Mobile Network Operator (MNO). Most remote m-payments through the internet are currently based on card payment schemes. Other solutions, based on credit transfers or direct debits, are technically feasible and possibly as secure, efficient and competitive, but seem to have difficulties entering the market.
- Proximity payments generally take place directly at the point of sale. Using near field communication (NFC), the leading proximity technology at this stage, payments require specifically equipped phones which can be recognized when put near a reader module at the point of sale (e.g. stores, public transport, parking spaces).
No federal privacy laws expressly address mobile payments (for example, by smartphone). An FTC report noted that although mobile payment can be an easy way for individuals to pay for goods and services, privacy concerns have arisen because of the number of companies in the mobile payment marketplace and the large amount of detailed personal and purchase information collected and consolidated.