What are Mobile Payments?

Shannon Andrade |

August 22, 2012

Mobile Payments

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.

New mobile applications continue to enter the payments marketplace servicing a wide variety of needs for merchants and consumers alike. With dozens of entries flooding the space each month, it’s our goal with, what has now become our ‘What Is’ series, to provide brief overviews of many of the new apps available. Giving merchants and developers an up-to-date look at the opportunities and technology currently available to them in the market today.