SIM driven mobile phones may enable people to buy everyday needs such as milk, newspaper and even train tickets. Future transactions are now made possible by punching numbers through mobile phones.
The Mobile Payment Market
The mobile payment market enables customers to use their mobile phones for financial transactions. This market is predicted to quadruple by 2014, with an estimated value of $630 billion. This future would not be possible without the present; in fact, these days mobile payments are now possible through applications such as PayPal mobile. This phone application enables users to make person to person payments based on SMS transactions. Users can pay car parking tickets, shop and buy online through such mobile applications.
Aside from PayPal mobile, other cashless mobile services have also been recently released. The GSMA (Global System for Mobile Association) launched the Pay-Buy-Mobile project. This project enables users to buy or pay for goods and services using their mobile phones. The project works by storing the consumer’s credit or debit information within the phone’s SIM card, then utilizes NFC or Near Field Communication to enable the phone to be passed to a contactless POS (point of sale) terminal for the transaction to be completed.
Technology Behind Mobile Payments
Enabling people to process financial transactions through the amenities in their mobile phones are the complex and advanced technologies of NFC, RFID and EMV.
Near Field Communication technology allows the exchange of data between devices within a short range. NFC’s enable contactless transactions.
Radio Frequency Identification also allows contactless transmissions through the use of radio waves through a wireless short range environment.
Europay, MasterCard, and Visa are the three major companies who developed the standard chip cards for authentication of credit and debit cards.
Mobile Payments, Are They Secure?
Security is definitely an issue when it comes to electronic transactions. The high technology used to create and enable this service can be breached by crooks and cyber criminals. However, security experts suggest mobile payments are safer than credit cards. Mobile payment affixed with the NFC technology are said to increase the security of transactions and contactless payment. Another measure that lowers the risk of this type of transaction is to limit the value of transactions. Transactions are limited to around ?15. Users are allowed to make multiple payments or transactions with this limit before going online for authentication.Now mobile phones not only offer SIM-only deals, but card-less contacts, and cashless payments are now made possible. The UK’s best SIM-only deals are typically found online instead of in brick and mortar stores.
Compared to credit cards, mobile payments may offer better security. When a credit card is lost or stolen, it is still possible for the card to be used in an offline environment, even if it is cancelled by the bank. For mobile payments, the cancellation of the illegal transactions is easier and more secure as service providers can cancel and lock the phone.