A decade or two ago, people thought of mobile phones as gadgets that are merely meant for verbal remote communication. As the years pass, however, and as more technological innovations were introduced, the mobile phone is no longer used for making calls. First that came was the SMS which until today is one of the most used features of the gadget. Then this was followed by MMS which allowed users to send and receive bigger video and audio files through their phones. This was soon followed by internet capability, which has transformed the mobile phone into a virtual hand-held computer.
The changes continue for the better. Now, the mobile phone has become one of the electronic means for transacting payments. Such feature can be attributed to people’s constant search for the most convenient way of transacting business and carrying out payments without having to go anywhere. Mobile phone payments and transactions can made through four basic methods. These are payments done through SMS, direct mobile billing, payments through WAP, an NFC or Near Field Communication, which the most recent innovation. Most current mobile phone models can be used for the first three transactions. The later models that are equipped with RFID technology can be used for all, including the NFC mobile payment method.
SMS mobile payments are the simplest but are also the least secure. This is the reason why may not be the most preferred method. Direct mobile billing, on the other hand is already a system fixed by the service provider and the banks. This means that it employs a much better security system that is difficult to penetrate by any hacker. Through this one can pay his mobile phone service provider by transferring funds from his bank account by using his phone. However, it is clear that not very many companies can actually take advantage of this service. It is usually the utility firms that do.
Payments through WAP or wireless application protocol are not much different from transactions done on the internet. Actually, the basic principles are the same. The only difference is that WAP payments are done with the use of a mobile phone while the other is carried out with the use of the PC. In terms of security, this is also just the same as transacting online using a computer.
NFC is one of the latest methods of payment and transactions on mobile phones. In this case, the mobile phone is not used as a means of communication to complete a payment transaction. Instead, it is the very device that would be used transfer money from one party to another. Instead of a credit card, the NFC-abled mobile phone is the one used to come in contact with another gadget.