Mobile payments are a new form of transaction that uses mobile devices to make payments from a user’s bank account or credit card account. Mobile payments require both a software and hardware component to operate. The software component of a mobile payment system includes a phone’s operating system, but a separate mobile application may also be required. The hardware component includes the mobile device, but some forms of mobile payments require an extra chip known as a near-field communications (NFC) chip.
Mobile NFC payments are an emerging technology that allow for contactless payments through NFC readers installed at retail locations. Phone manufacturers have already begun to ship phones that come with an NFC chip preinstalled, and large companies with major mobile communications divisions, such as Google, ISIS and Sprint are introducing or have introduced contactless wallets that leverage NFC technology.