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Exploring the Nitty-Gritty Behind Mobile Payment Technology

The number of transactions conducted through mobile payment is continuously soaring high, year after year. Mobile devices have deeply pierced in the market, and this is the basic cause behind the introduction of mobile payment system, by the retailers in the market, in order to deliver enhance and hassle-free customer service.

The most contemporary example of mobile payment can be noticed in the public transport sector. Payment of over 30k rides in New York on daily basis was conducted through mobile payments in the year 2016. The existing mobile payment services are growing by leaps and bounds. Daily around 1.5 million new users subscribe to Android Pay every month, while transaction of worth $600 million was conducted, in the very first 6 months after the launch of Samsung Pay.

Let’s give a deeper look at the functioning of mobile payment and the different ways the consumers utilizes it.

Definition of NFC

Near Field Communication is abbreviated as NFC and its technology behind the payment done through mobile devices. It primarily functions by permitting two devices to interchange data when placed in the vicinity of few centimeters. The data exchange works, with a condition that, both the devices should be equipped with the NFC chips.

Now, a thought would have struck your mind, that the same thing can be accomplished by Bluetooth technology too. Yes, of course, but the main difference lies between the power consumption rate, wherein Bluetooth sucks more than NFC. The importance of battery life increases, when payments are to be made through it.

NFC functions in two ways:

One-way communication – In this type of communication, the primary powered device ie mobile device, smart card reader directly transmits the communication signals to the NFC chips. When the card comes in contact with the NFC card reader, the reader will subtract the entered amount from the bank account linked to the card.

 Two-way communication – In this communication methodology, two devices transmit and interchange signals to transfer data like photos, images, videos, audios etc.

The Three Well-Known Mobile Payment Systems

Apple Pay

Since the launch of Apple Pay in the year 2014, it has boosted the revenue system of the brands like Dominos, KFC, Starbucks by facilitating customers to purchase products through their hand-held devices.

What is the basic working mechanism of Apple Pay? Apple Pay Simplifies the payment process, through mobile devices on the web and countless POS (Point of Sales). It eliminates the use of credit/debit card, by allowing consumers to directly communicate with the POS through their smartphones.

Android Pay

In the year 2015, Google came up with the digital wallet platform, named as Android Pay. The base of this platform is the original, Google wallet which was introduced in the year 2011. The implementation of NFC technology, helps the customers to make a purchase by tapping onto the cash registers or via in-app purchase wherein the addition and deduction of the funds would be executed on the credit card registered on Google.

Samsung Pay

The response of Samsung in the arena of mobile payment system was a bit late compared to others, but with the launch of Samsung Pay in the year 2015, mobile transactions of around $500 million were conducted within the first six months. Unlike Apple Pay and Android Pay, the retailers are not required to put their bucks in opening new cash registers. The reason behind it is that the technology operates with the conventional credit card readers. The least you need to do is just tap your phone to a credit card reader.

Security Terms in Mobile Payments

There are many questions pertaining to security raised, since the launch of mobile payments services. Performing transactions through mobile payments demand authorization and the underlying medium to verify the credentials may be a physical object – a microchip in the device or a programmed virtual functionality stored in the cloud. The authenticity of the medium can be determined by the presence of tamper-proof unique digital signatures inscribed on it.

For example, Apple has incorporated a small physical chip in its model iPhone 6 and above. Whenever a user executes a transaction, a random code is automatically generated by the underlying secure medium, which helps in transmitting the credit/debit card credentials of the users.

In places where POS ( Point of Sales) are installed, two major types of authentication techniques used are fingerprint recognition and PIN authorization, to initiate the transaction further.

Utmost importance is imposed on security criteria, during the android app development pertaining to online payment technologies. In order to strengthen the security level, service providers are implementing three-layer security protocol such as an organization or multi-factor authentication.

Written By

Nirav Upadhyay is a Marketing Manager who is an intense follower of technology trends that are reshaping the business dynamics. Being an Engineering graduate he is always compelled to technology and tries to discover new trends in the tech world. Earlier he worked as a tech geek in a well-established Mobile App Development Company which gave him this experience.

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