Overview of Mobile Payment System

Overview of Mobile Payment System
With the tenfold advent of technology, many life changing methods have surfaced making our lives easy. With this rapid evolution the things that may have an impact on your life today in some magnitude may vary or even cease to affect you at all. Such is the case with mobile payment systems i.e. what used to be a mere concept a couple of years ago is currently being rolled out in a plethora of countries and to many a surprise is being well received. Several studies defend that many patrons are fascinated and alacritous to abuse their devices for online payment purposes. One of the many reasons of the quick adaption of m-pay (mobile payment) is that it avoids fraudulent transactions and allows the users to worry about cash much less than they used to. M-Pay can be defined as any transaction which is initiated/authorized using a mobile device for services or goods. These mobile devices are available as a very wide and diverse assortment of gadgets. In 2012, the M-Pay volume constitutes only $171.5 billion to the total transactions being committed online. However paying with your gadgets is gaining importance in e-commerce (as highlighted by the graph)
Reference: http://www.servicesmobiles.fr/services_mobiles/m-commerce/ In M-commerce remote transactions have been around for quite a while in the form of buying ringtones, wallpapers and other digital stuff but to buy actual goods is something new and quickly
spreading across the globe. In the chart on the next page we chart the use of M-Commerce through
the years and predict it for the coming years: Reference: http://investeddevelopment.com/wp-content/uploads/2012/06/Untitled.png
Theory:
Based on the ideology of anytime, anywhere M-commerce aims to provide a quick and easy way for monetary transaction. There are a lot of surveys and studies indicating that M-Pay is more accepting as compared to the others. The studies predict high commercial prospects along with a plethora of opportunities for many organizations, and as M-Pay is an emerging prospect for monetary transactions everyone must equip themselves every aspect of this technology.
Significance:
There is a diverse range of M-Pay Business Models in use in the industry. Each model has its own pros and cons. Some characteristics play a very important role in the selection of M-Pay models. With different level of supporting intensities there needs to be an experiential investigation to find quantitatively for each characteristic.
Why M-Pay?
As the benefits of M-commerce are widespread, it can be considered as a natural junction of standards and commerce. As E-commerce supplemented the way to do business, M-commerce
supplemented the way enhanced by E-commerce. In case of wired commerce the PC and the Operating System are taught to tread the web depending on the specific location.
Some Motivating Factors:

Since the advent of Internet the usage curve has grown exponentially. E-commerce and other applications tend to grow due to a large number of installed machines. Such machines will adapt to the price to performance ratios along with enhanced storage capability and greater processing power. On this framework sophisticated applications will surface for Web based computing and Desktop based computing. However there are some major limitations that are to be considered before opting for either such as carrier data charges and the preliminary handshakes to take care before going online. Similarly in future the number of wireless devices is expected to grow exponentially i.e. the devices that are independent of any booting process and are a playground for quick launch applications.
M-Commerce Emerging Applications:

Mobile commerce applications are location services (weather, directions and maps), communication services (SMS/MMS), News, Entertainment, Sport information, Gaming and financial services, Mobile banking, Reservations and ticketing, buying products online or using mobile device.
Gender and Ethnic Differences:

Prior studies emancipate the m-pay systems adoption based on the consumer demographics. Demographically the adults along with the heavy mobile users intend to use mobile services rather than the traditional transaction systems (Totten et al, 2005). Previous studies depict that male and female have different tendencies towards accepting new technologies. Using traditional Internet services along with monetary transactional systems regard these studies have shown that females face problem using new technology and tend to abstain from it disliking Internet communication service and for education purpose like internet services very few than male. Some intellectuals have found that females are very much willing to use mobile payment system rather than males (Anckar and DIncau, 2002) whereas (Constantiou et al. 2006) explore that men are
frequent users of mobile services than women, this difference in findings pushes us to investigate a little more.
End-User Views:
We propose the end-user adoption study of mobile payment to a unique sample of individuals, considering mobility as it is a major factor for people to facilitate in jumping to it. The unique capability is of connecting the telecom network to the bank and receiving the updates via SMS on individual basis.
Mobile Payment System and its Trends

As mobile payment is a relatively alternate and new way of payment which is being adopted rapidly along Asia and Europe who are leaving credit/debit cards; because the mobile payment systems can lead to the purchasing and selling of goods/services. Introducing M-Pay will evolve the commercial playground into such a thing that resolves technological and physical barriers.
Features of Mobile Payment

Reachability: This service is not restricted, user can access it anytime and from anywhere and perform transactions. Ubiquity: Customers can get information which might spark their interest, along with that there is no need for exact location. Dissemination: Users can transmit any kind of information to other in terms of unambiguous geographical location. Personalization: Mobile applications can be customized to replicate user needs. Localization: Location based services are attainable and can be acquired to date info for exact facility which has been applied.
Characterizing Mobile Payment

M-Pay may be categorized into various types, such as contract type, settlement type and content value.
Transaction Type
Pay per View The user pays per each view of the intended content e.g. MP3s or streaming MP4s. Pay per Event The user pays per intended event. This event can be an activation of service for a specific value or time.
Pay per Unit The user pays per unit of the intended content. Unit can measured as amount/period of content. Every unit used will be billed to the user. Such instances of this kind could be availed in downloadable apps or streaming videos.
Settlement Type Pre-paid The user pays in advance for availing the services/content. Post-paid The user pays after availing the services/content. Content Value Micro payments Describes same acquisitions usually fewer than the 500 for instance paid parking and downloadable ringtones. Macro payments Frequently large acquisitions over 10000, for example acquiring airplane tickets or train tickets.
Actors within a Mobile Payment System

The M-Pay value chain has various roles that need to be handled, such roles may be the provision of service/content, consumer authentication and payment settlement along with authorization. The customer is the individual owning the itinerant device, willing to use it for monetary transactions. In case of M-Pay a user may be involved in registering himself with a financial institute; which can be identified as an organization to perform authentication of transaction and authorization of payment settlement; it could be a network operator/financial institute.
Figure MPS Actors
Traditional Payment System

Traditional Payment means that users pay for the bought goods via debit/credit cards. A card is verified from the issuing bank that whether the amount to be deduced is available or not and then deduces the amount from the bank account. Credit cards are not obtainable everywhere. This type of payment increases the risk for the merchant in the essence that they do not obtain a fail-safe proof of the transaction actually taking place via credit cards. The two factors associated with the credit cards are privacy and security, because the transitioned amount can be tracked via multiple means. For it, the transaction mechanism is very complex relative to other traditional means. Debit cards come into play when the amount of balance is positive in the holders account. The transaction carries out like this, when a user buys something the amount is cross checked from their account and if available then deducted, but the downside is that the option for shopping via debit is available very less as compared to credit. Micro Payments cannot be performed via debit cards. Major reasons are that is heavily dependable on location and time. A well-known of debit cards is via the connection with ATM cards. Last but not the least there is the option of paying with cold hard cash, but with the current law and order situation it is very dangerous to carry large sums of cash with yourself. With cash you can perform micro and macro payment but the security remains a crucial issue.
The Process of Mobile Payments

With the prior studies depicting multiple scenarios of M-commerce, we come to know that it involves the following parties i.e. the user, merchant, financial body, trusted third party and
Telco operator. Customers having mobile payment system applications will register themselves with the financial body and then the merchants also register themselves for monetary purposes. As customers shop, the PIN code will verify his credentials and then send the amount to cross check form the account via third party who will then respond to the merchants with successful transaction collecting.
Why Payments through Mobile Device

With the current technological situation M-Pay is a very challenging task for any operator, the reason being, with the number of mobile users increased the need for more equipment arises which does not come cheap. Moreover the need to use mobile devices for business purpose increases. The use of credit card is very widespread yet expensive, Before leaping into this uncharted territory we must understand the mobile payment system and understand the intricate technical contributions which will lead to the development and the improvement of the mobile payment system. Adopting M-Pay will remove cost and time intensive delays produced by traditional payment methods. M-Pay is not dependent on time or location; due to which it is more efficient and reliable. From the consumers point of view M-Pay is un-investigated and more research needs to be done in order to make is successful in future. [Qingfei MIN et al, 2009].

Overview of Mobile Payment System

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Overview of Mobile Payment System

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Overview of Mobile Payment System

Some Motivating Factors:

M-Commerce Emerging Applications:

Gender and Ethnic Differences:

Mobile Payment System and its Trends

Features of Mobile Payment

Characterizing Mobile Payment

Actors within a Mobile Payment System

Figure MPS Actors

Traditional Payment System

The Process of Mobile Payments

Why Payments through Mobile Device

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