Mobile phones have increasingly become tools that consumers use for banking, payments, budgeting, and shopping. Given the rapid pace of developments in the area of mobile finance, the Federal Reserve Board began conducting annual surveys of consumers’ use of mobile financial services in 2011. This 78-page report, “Consumers and Mobile Financial Services” (March, 2015) examines trends in the adoption and use of mobile banking, payments, and shopping behavior and how the emergence of mobile financial services affects consumers’ interaction with financial institutions.
Mobile Payments: Introduction
Mobile payment, also referred to as mobile money, mobile money transfer, and mobile wallet generally refer to payment services operated under financial regulation and performed from or via a mobile device. Instead of paying with cash, cheque, or credit cards, a consumer can use a mobile phone to pay for a wide range of services and digital or hard goods.
Although the concept of using non-coin-based currency systems has a long history, it is only recently that the technology to support such systems has become widely available.
In developing countries mobile payment solutions have been deployed as a means of extending financial services to the community known as the “unbanked” or “underbanked,” which is estimated to be as much as 50% of the world’s adult population, according to Financial Access’ 2009 Report “Half the World is Unbanked”. These payment networks are often used for micropayments.
There are four primary models for mobile payments:
- Premium SMS based transactional payments
- Direct Mobile Billing
- Mobile web payments (WAP)
- Contactless NFC (Near Field Communication)
Some mobile payment solutions are also used in developing countries for micropayments.
Source: Wikipedia