The consumer uses web pages displayed or additional applications downloaded and installed on the mobile phone to make a payment. It uses WAP (Wireless Application Protocol) as underlying technology and thus inherits all the advantages and disadvantages of WAP. However, using a familiar web payment model gives a number of proven benefits:

1. Follow-on sales where the mobile web payment can lead back to a store or to other goods the consumer may like. These pages have a URL and can be bookmarked making it easy to re-visit or share with friends.
2. High customer satisfaction from quick and predictable payments
3. Ease of use from a familiar set of online payment pages

However, unless the mobile account is directly charged through a mobile network operator, the use of a credit/debit card or pre-registration at online payment solution such as PayPal is still required just as in a desktop environment.

Mobile web payment methods are now being mandated by a number of mobile network operators.

A number of different actual payment mechanisms can be used behind a consistent set of web pages.

Direct Operator Billing

A direct connection to the operator billing platform requires integration with the operator, but provides a number of benefits:

1. Simplicity – the operators already have a billing relationship with the consumers, the payment will be added to their bill.
2. Instantaneous payments giving the highest customer satisfaction
3. Accurate responses showing success and reasons for failure (no money for example)
4. Security to protect payment details and consumer identity
5. Best conversion rates from a single click-to-buy and no need to enter any further payment details.
6. Reduced customer support costs for merchants since customers will complain to the operator.

It has however a drawback, the payout rate will be much lower than with other payment providers. Examples from a popular provider :

• 92% with Paypal
• 84 to 86% with Credit Card
• 45 to 91.7% with Operator billing in the US, UK and different smaller european countries, but usually around 60%
• However, there is in the world one exception to this rule, in UK it might give more payout percentage for a merchant to bill through the Payforit system than with a credit card.

Credit Card

A simple mobile web payment system can also include a credit card payment flow allowing a consumer to enter their card details to make purchases. This process is familiar but any entry of details on a mobile phone is known to reduce the success rate (conversion) of payments.

In addition, if the payment vendor can automatically and securely identify customers then card details can be recalled for future purchases turning credit card payments into simple single click-to-buy giving higher conversion rates for additional purchases.

Online Wallets

Online companies like PayPal, Amazon Payments, mHITs and Google Checkout also have mobile options. Here is the process :

First Payment

• User registers, inputs his phone number, the provider sends him a SMS with a PIN
• User enters the received PIN, authenticating the number.
• User inputs his credit card info (or another payment method) if necessary. (Not necessary if account already existing) and validates payments

Subsequent payments :

• The user re enters his PIN to authentify

Requesting a PIN is known to lower the success rate (conversion) for payments. These systems can be integrated with directly or can be combined with operator and credit card payments through a unified mobile web payment platform.

Source: Wikipedia