Posted at 01.02.2019
The e-commerce revolutionized just how business is carried out. It transformed the original physical office with exclusive location. This causes various new digital payment concepts to progress. "The recent advancement in mobile and cordless technology has freed consumers from the spatial and temporal constraints of traditional business. " (Balasubramanian et al. , 2002)
Now there are many technologies available to customers to transact from anywhere anytime. The recent addition is the mobile repayment, where cellular devices are being used to make repayment. The acceptances of mobile business are depends upon the availability, global acceptance, easy-to-use, and secure ways of payment.
Mobile payments make reference to alternative repayment system where mobile devices are used to make payment. Mobile payment can be classified as Cellular mobile payment and Contactless mobile repayment.
Cellular Mobile payment:
In mobile mobile payment, payments are completed using cellular centered mobile devices that can be used at point of deal or in online deals. According to the white newspaper, "Your mobile is your pocket: enabling secure m-payments using PaymentWorks Mobil" (Encorus Systems).
Contactless Mobile Payment:
In the contactless mobile repayment system, like name suggests, there is no contact between a payment device and a reader (Datamonitor, 2004). The transmitting technologies behind contactless mobile payment system include RF and NFC (Near Field Communication) systems, among which, Radio Occurrence Identification (RFID) is increasing increasing recognition. Contactless mobile repayment is generally used for point-of-sale orders.
There are amount of stakeholders in mobile repayment system (make reference to Figure. 1). With regards to the scenario, stakeholders changes and new stakeholders could also involve. Below are the key stakeholders and their advantages of implementing mobile payment system.
The Deloitte & Touche article states that, there will be a significant business advantages for mobile operators who offer mobile obligations. The advantages include new customers, reduced customer start, and income from new, value added, payment-related data services. The benefits will be more to operator, who first add the service in the market before other mobile providers, follows the tendency.
For mobile operators retaining the customer is one of the most notable challenges. Mobile providers are looking for, new long-term services for customers, which will help to retain the subscriber bottom part. Creating an infrastructure where customers can use a mobile phone to make payment, will be a competitive advantage for the operators to get new and retain existing readers.
Mobile operators may offer mobile payment services with or with out a financial spouse. Like offering a online shopping website, where subscribers can buy and the total amount payable by the customer will be put into their monthly declaration, which will reduce the customers need to make use of credit or debit greeting card. They even can tie-up with a financial companies and charge them for using operator's customer identity component (SIM) credit card to insert credit or debit card information.
The Mobile repayment system can make financial companies to bring in new and impressive repayment services to its customers. This might increase the institution's payment business deal turnovers, and assist in brand positioning. This may be possible by partnering with mobile manufacturers and suppliers.
By adding the contactless infrastructure to their existing network, the financial institutions can provide their cardholders with the same reliable repayment services which currently used by them.
This contactless repayment facility will allow customers to produce a faster and far more convenient to pay and increase their devotion towards the establishment. Mobile payments will help the financial institutions to help expand penetrate cash heavy vendor segments and open up new acceptance stations.
The Financial institutions may also offer its customers more purchase associated services like consideration management and monitoring facilities as well as devotion program, where instant savings and rewards are offered to its customers.
Merchants will also enjoy immediate results when contactless mobile repayment implemented. There has been a good responses from retailers' across the world, who were already integrated contactless mobile repayment service. The immediate benefits include faster payment transactions and better customer convenience. Mobile payment can also help retailers, to establish stronger customer relationships and customer loyalty.
The Retailers have many advantages in introducing the contactless mobile repayment like fewer requirements to handle cash, thus lowering the expenses and enhancing customer convenience. Retailers can also expose commitment program like financial institutions, such as paperless receipts, gift idea card, etc. , The customers can will have their "loyalty cards" in their mobile phones, merchant's contactless point of sales (POS) systems can then interact with customer's loyalty credit card wherever customer outlets.
Merchants can also have benefits from branding prospects, market segregations, and an possibility to increase their customer platform. Contactless payment systems that reduce infrastructure costs can improve return-on-investment for stores. Add-on applications such as loyalty programs, e-coupons, and rewards can also improve the value proposition.
The Amount 2, illustrates the contactless mobile repayment acceptance in U. S. market.
Mobile Handset Manufacturers
The mobile repayment feature creates an opportunity for mobile manufacturers to advertise their products and increase their business partnerships. This gives a leading edge gain to the manufacturers in competing with other players. Like early on camera cell phones captured consumer market show, cell phones which support new impressive applications can record new customers and offer new partnership opportunities.
Even though there are many advantages in mobile payment system, there are some limitations also prevails. Most of the non-traditional transaction centered companies (like tolls, transit, locations, etc. ) have limited infrastructure support to use the existing card networks for alterative payments. Besides their high clearing charges for merchants, traditional greeting card payment methods are sluggish and inconvenient for consumers. "Merchants only accept credit/debit credit cards where high-density exchange volumes make economical sense or under the pressure of the marketplace. " (Dewan and Oswald, 2004)