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.
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Consumer Versus Merchant Initiated Mobile Payment
Payments can be initiated by both the consumer or the merchant, although consumer payment is becoming the most common since it suits the personal nature of mobile devices.
- Consumer focused – The consumer chooses to make a mobile payment. They interact with the payment server using their mobile device to authenticate and authorize the payment. They are subsequently presented with status showing confirmation of the successful transaction or failure with a reason. Extensions to this include Near Field Communications or Contactless Payment options using additional hardware built into the mobile phone.
- Merchant focused – This is similar to the consumer focused scenario, however the transaction is entered and completed by the merchant (or their representative). This is similar to Mobile EFTPOS except it is processed via a mobile phone/device.
Source: Wikipedia