Mobile payment is a method for paying for products online using your mobile phone. In some parts of the world it is very common while in others it has really not taken off yet. The advantages are that mobile payment will allow consumers to make online purchases without having to have a credit card. Normally the purchase is made by adding a charge to your phone bill. This method of payment is usually used for online payments, mainly info products and things like online gaming that can be delivered immediately over your mobile device. However it is possible to pay for physical products this way as well so it is just a matter of time before mobile payments becomes the standard way to pay for most things.
There are a few different ways that you can make a mobile payment the oldest and simplest way is with an SMS text message. With this method the consumer sends a text message requesting payment and then a charge is added to his phone bill. The merchant is then notified when the payment has gone through and will release the product to the consumer. This was the original method of mobile payment but it is quickly being surpassed by other means because of the disadvantages of this approach. The biggest problems are that it is not particularly reliable and the processing is slow. There are also some security issues so most people are moving towards other means of making mobile payments.
The method of mobile payment that most people are moving to is to use direct mobile billing. With this approach people will choose the mobile payment option and then enter a pin and a onetime password into their mobile phone. The charge will then be added to their phone bill. The advantages of this approach are that the process is much faster and much more secure than they are for SMS payments. It also allows you to make online payments without having to pre-register or have a credit card. This is quickly becoming the preferred method of mobile payment in certain parts of the world.
Mobile web payments are another option; they are basically just like making any other payment on the web except they are done from your mobile device. They have the advantage of being easy to use and merchants like this approach because it allows them to send the customer to another webpage so that follow on sales can be made. The disadvantage is that you either need to have credit card or be signed up with a payment processor like Paypal to use this method. Recognizing this problem the web payment processors are moving towards combining this approach with direct mobile billing. This will allow people to pay for products by simply clicking a link and having the cost added to their phone bill. The downside is that this method will be quite expensive for the merchant which may limit its adoption.