The Convergence of Business & Technology – Mobile Payment Apps

By Dzhingarov

No one could have expected the rapid growth of the mobile phone market but even more interesting is the great number of innovative applications for which a mobile phone can be used. From GPS software to mobile payment apps, there seems to be nothing a mobile phone can’t handle. Couple this with the literal explosion in e-commerce and this is where you will find the convergence of business and technology at its best.


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Differentiating between Mobile Payments and Mobile Commerce

Although the term ‘mobile payments’ is often used loosely, it does not refer to buying products online and paying for them with a mobile device. Mobile payments, rather, are those made at the POS (point-of-sale) wherein the phone communicates with the cash register to make the electronic transaction. The cash register then communicates with the mobile phone user’s financial institution to see if funds are available. From this point on, the transaction is much like using a credit card. It is either accepted or denied.

Mobile commerce on the other hand is when the user buys products online and pays for them through normal channels. A credit card number is given, a PayPal account and some sites even accept bitcoins, P2P virtual currency. This is how the digital marketplace handles transactions. However, technology has brought mobile commerce even one step further with innovative marketplace scripts. Now there are mobile apps that rely heavily on social media for ‘word of mouth’ advertising. Users can login with their PayPal or Twitter accounts, make their purchases and then share their experience on social networking sites.

Pros and Cons of Mobile Payments

As with any newer technology, there are always some bugs to be ironed out. The first concern is whether or not the process is safe from hackers. Much personal and financial information is stored in the phone so that when it is within approximately four inches of the reader, radio waves transmit that data. Does this mean that any good hacker can simulate a reader and hack sensitive information?

On the other hand, there are a number of benefits to mobile payment apps. Theoretically mobile payments enable the customer to move smoothly and quickly through a line as there is no tedious task of counting money and making change. Paying with credit or debit cards isn’t much faster as some amount of input is needed from the customer, whether it is a signature or a pin number entered on a keypad.

In the coming years, it is estimated that more and more POS transactions will be conducted through mobile payment apps to the point where money and credit cards may someday become obsolete. The convergence of business and technology is aimed at making life easier, but getting to the point where money is no longer needed is still somewhere in the future. Until that time, many countries around the world are beginning to see the benefits of mobile payments so we can expect greater security as technology advances. Have you ever wondered what it would be like to live in a world where there was no money?