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Latest Developments in Mobile Payment Systems

We have reported previously on this blog about services which allow you to process credit cards using just your cellphone.

In the last year, this technology has progressed rapidly. Generally, these payment systems can be divided into two broad categories:

  • Payment systems that utilize a mobile network to initiate or authorize a transaction.
  • Contactless systems that use a mobile phone in lieu of a traditional credit card.

Phonepayment Services that allow you to process payments include Square, PayPal Mobile, and Intuit GoPayment as we mentioned in our original article, along with VeriFone’s PAYware Mobile.

Services that allow you to pay for goods using just your phone use Near Field Communication (NFC). The idea behind NFC is simple: Rather than swiping a credit card, simply wave your phone at a payment terminal. These systems are already being implemented: Last fall, Visa worked with the transit and port authorities in New York to install Visa payWave terminals at select New York City subway stations. And Apple and Starbucks currently accept mobile payments at their stores.

In addition to convenience, another advantage of modern mobile payment systems is environmental. Processing the payment electronically reduces the need to print a paper receipt. And because a single device can act as a credit card, a subway pass and possible even an event ticket, using a mobile device for these transactions eliminates the need for extra cards and saves money and resources.

Understandably, one of the main concerns with mobile payments is security. It’s important to remember, however, that the credit card terminals and systems that we currently use every day are often insecure, yet millions of users use them anyway. At this stage, nothing indicates that any aspect of mobile payments is inherently more insecure than any other system.

Click here to read an article on this sublect by Cristina Warren of Mashable.

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