When did you last make a payment using cash? The answer is most likely ‘long ago’. With mobile payments becoming easily accessible and convenient, most of us use our mobile devices to make these payments. But, have we ever stopped to think about how does this mobile payment processing technology work? This article explores what mobile payments are, how secure they are, and how they work in making your life so easy.

What is mobile payment processing?
Simply put, mobile payments refer to any transactions that are done over a mobile device. This device could be your mobile phone, tablet, or even a smartwatch. Smart devices have become so popular that in the year 2021, more than two billion people used mobile payments. This means that they have gone beyond businesses and are increasingly being used by people to purchase goods and services.

What are the different kinds of mobile payments, and how do they work?
For consumers, mobile payment processing is a touchless method to pay for goods and services. On the other hand, for retailers and businesses, this is a way to accept payment without the hassle of handling large amounts of cash or credit card payments. There are several types of mobile payments, each with its unique processing:

NFC (Near Field Communication) mobile payments
This is a mobile payment processing technology that works through radio frequency identification (RFID). To enable this kind of payment, you need an NFC chip and a mobile device that has this chip embedded. These two chips basically communicate with each other while sending and receiving data, provided they are at a distance of two inches or less from each other.

QR (Quick Response) code mobile payments
This type of mobile payment works through a digital QR code on your mobile device. To make the payment, you need to scan this code using the device. Once this is done, a payment page is displayed on the device. This page allows you to make the payment and complete the process.

Mobile point of sale payments
In point of sale (PoS) payment processing, the mobile device acts as a wireless POS terminal. Since, to make this payment, the retailer and the customer don’t need to be in the immediate vicinity of each other, this mobile payment processing method has become quite popular.

Sound wave-based mobile payments
Also known as sound signal-based payments, these are conducted over sound waves. As futuristic as this sounds, this mobile payment processing system is fairly straightforward. In this, high-frequency sound waves are transmitted by the POS terminal to the mobile device of the customer. The device then converts this data received through sound waves into analog signals and sends back sound waves along with the payment information. Once received by the POS terminal, the payment process is completed.

SMS-based mobile payments
As the name suggests, this technology allows the customer to make payments through text messages. In this method, the customer gets a link through text followed by a code. This code is then sent to the phone number of the vendor. Once the code matches, the payment gets confirmed.

Mobile wallets
This is also a popular and easy mobile payment processing system that allows users to securely save their credit card information in applications such as Google Pay and Apple Pay on their mobile devices. In the device, the 16-digit card number is stored as a random alphanumeric ID, which is known as the token. To make the payment, the user needs to bring their mobile device close to an NFC-enabled POS.

What are some benefits of mobile payment processing systems?

Mobile payment processing makes payments much safer. Features such as PIN, tokenization, Touch ID, etc., safeguard your sensitive information and payments.
One of the best benefits of mobile payment processing is that it lets you complete your payments within a second or two.

You don’t have to carry cash or multiple cards to make payments while shopping. All you need is your mobile device to make the payment easily.

What is the future of mobile payment processing?
Given the ease and security that it offers, mobile payment processing and its adoption will continue to grow. Experts predict that there will be a rise in technologies such as biometric authentication and artificial intelligence in mobile-based payments, helping make them more secure while improving the quality and speed. The use of cryptocurrencies in making payments through mobile devices is also expected to rise. With all these advantages, mobile payment processing is set to be the future of conducting business. It will enable secure, low-cost, and easy payment systems.