Tag Archive | "Mobile Payments"

How Mobile Payment Solutions Work

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How Mobile Payment Solutions Work

Yesterday we’ve seen a few details of how a mobile payment solution will work, mainly on the customer side of things. But for you as a merchant, is implementing a mobile payment platform on your e-commerce side really a good idea? In a few cases it could be an excellent choice, but not in some others. Let’s go more into details about the reasons behind this.

First, mobile payment solutions are only meant for very small transactions. Many payment processors impose a limit to the amount that can be charged in each transaction, which is usually around $5 to $10. This means that this kind of payment method wouldn’t be much of a good idea if you’re shipping physical goods. But for digital content and membership sites, it can definitely be something worth considering. In fact, some of the top uses for this kind of payment platform are:

  • Dating sites
  • E-Book and other written content
  • Music / video streaming or download services
  • Adult content
  • Gaming sites
  • “Freemium” services, which have a basic level of service that is free, but the customer can upgrade to a paid package for a small fee
  • Online tech support services
  • Psychic sites
  • Online game currencies and items (WoW, Second Life, etc)

Therefore, anything where the buyer won’t need to receive a physical item and that is priced relatively low may work quite well with a payment solution allowing the buyer to use their mobile to complete the transaction. Sites that offer a recurring billing/subscription model, such as dating sites and other membership services can also benefit from this, as many mobile solutions allow the merchant to bill the customer on a regular basis, such as $5 per week, if they accept to join the site.

Now that we know who such a payment service is suited for, many would be asking exactly how to implement it on their site. To accept mobile payments, you will usually have to go through a third party processor that lets you accept this type of payment. There are a few such companies in operation right now and these can be found simply by doing a quick Google search. Now it is technically possible for you to set up a billing solution directly with some mobile phone carriers, but this is usually out of reach of 99.9999% of e-commerce operators and online entrepreneurs. Signing contracts with dozens of mobile carriers around the world would be a time consuming and costly procedure. Remember, not everyone uses the same phone company. Furthermore, in order for a large carrier to even consider getting into such an agreement with you, you would need to demonstrate that you can create sales volumes that would exceed millions of dollars every year and that your company has a solid product plus financial backing. So unless your little online game site becomes the next Zynga, this proposition would be out of the question. Going through a payment processor usually only requires a working website and an acceptable business model.

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Are Mobile Payment Solutions Really the Way of the Future for E-Commerce?

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Are Mobile Payment Solutions Really the Way of the Future for E-Commerce?

You may have seen a few pieces of online news about mobile payment solutions and wondered whether you should implement them on your website. Some articles even go as far as claiming that mobile payments are the way of the future and will revolutionize the online commerce industry. But is there any truth to these claims, or is it just marketing hype to get yet another “start up” run by a 19 year old entrepreneur from his basement off the ground?

When talking about mobile payment solutions, we first need to clear up one thing in order to avoid any potential confusion. There are actually two kinds of mobile payment options currently available in the online world. The first one is simply a type of mobile wallet that is linked to the customers credit card. The buyer can easily make transactions from their mobile phone without revealing their card information, but the purchase is still charged to their credit card as usual. The second kind involves charging the amount of the transaction to the buyer’s mobile phone bill or deducting it from their prepaid balance on their mobile account. The second one is the type that we will be addressing in this post.

First, let’s understand how the system works. The client wants to make a purchase online. They then enter their cell phone number into a secure form on an e-commerce site. They then receive a text message with information about the transaction (such as the cost) and will need to confirm they accept the charges, either by replying to the message or more commonly, by entering a code that is sent with the message onto the merchant’s website. They then have access to the product or service that they’ve ordered and the merchant will get paid by the payment processor later on, just like with a credit card transaction.

Sounds easy, right? The system is designed to allow for easy and smooth transactions with minimum risk to both the merchant and the customer. Using such a payment system has many advantages for both parties. It is good for buyers who don’t have a credit card or are reluctant to use theirs on an online commerce site, as it provides them with an alternative payment solution. It’s also a very good way to pay online for small purchases that are delivered directly to the buyer’s computer or for online services that don’t require any physical items to be shipped.

But should you run and implement this method of payment on your website immediately? The answer will depend on a few factors. As convenient as mobile payments may be, they are still far from being a perfect solution in all cases and it’s also important that merchants understand their potential disadvantages and not only look at the plus side. Tomorrow we will go into more details on the inner workings of mobile payments, which will be very helpful if you just started an e-commerce site and want to provide buyers with as many choices for payment as possible.

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A Complete Mobile Wallet Solution May Be Coming Soon to Apple Users

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A Complete Mobile Wallet Solution May Be Coming Soon to Apple Users

If you look at the major players in the online world, such as Google, Facebook, Amazon, eBay (with their PayPal system), you will see that despite their different offerings they do have one thing in common. No it’s not their popularity, but rather the fact that they either have a mobile payment solution ready or they are seriously considering to develop one. Of course, it’s not only the big players in the online world that want some of the action. Banks and financial institutions, as well as mobile phone carriers are all trying to put something out. And of course there is the smaller start ups that hope to achieve popularity but that few have ever heard of.


But there is one company that has put out a unique concept for a mobile wallet solution: Apple. A new app has been released called the Passbook. What makes it different (at least for now) is that it doesn’t yet have the functionality to make payments with the iPhone at a point of sale, but rather it functions as a kind of virtual wallet, allowing the user to hold event & movie tickets, coupons, boarding passes, transportation tickets, gift cards, vouchers, points & rewards cards, etc. When a user is present at a participating retailer, the card can be brought up on the screen and scanned.


The app also combines the feature of location detection, showing the relevant card when a user is near or at a participating merchant. This concept has already been adopted by some merchants and more are expected to follow. But the main question remains here: when will Apple integrate full payment functionality into the app?


For now, in the United States, payment systems that are fully integrated with mobile devices are still something a bit “futuristic” and aren’t expected to reach a mainstream status until 2016 or later. Some merchants have began to upgrade their systems and infrastructure, but those who accept mobile payments are still in the minority for now.


Another issue is: will Apple be able to dominate the market? It is in the lead with the most popular smart phone and the most popular tablet PC. However, Android based hardware and devices are not far behind at the moment. There are some who believe that there will be two or more mobile payment solutions that will be popular in the next few years. They will all function on the same principle: the user presents their smart phone, where an app generates a secure, one use only bar code that is scanned, allowing the purchase to be charged to the user’s credit card, or deducted from an online wallet account that has been filled up in another way (bank transfers, payments received from businesses, person to person payments, etc.). Apple seems like a trusted solution however it is still not known how much of the market they will be able to corner in the payments industry, as this is something the company doesn’t have too much experience with for now.

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Which Changes Will be Brought to Online Marketing in 2012 – Part 2

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Which Changes Will be Brought to Online Marketing in 2012 – Part 2

As we look at the changes that are expected to take place in 2012, there are a couple more things that online entrepreneurs can expect during the 2012 year. It would be a good idea to review these changes and see if there is something that you can do for your online business which would make it more competitive, as well as take advantage of some of the marketing methods that are expected to get a high degree of popularity in 2012.

  • Mobile Based Marketing Solutions Will be More Popular

There is now an increase in the use of smart phones, as well as other mobile devices such as tablet computers. People who use these devices use them for a lot more than just communicating with their friends or playing Angry Birds… this is why online marketers have noticed them and are taking steps to profit from the rise in mobile device use around the world. Websites that are specifically targeted to mobile users are going to be built in much higher numbers. Applications of various kinds that run on these devices will also go up. Mobile based payment and transaction solutions, which are already seen in action, are expected to grow in 2012. We can now see some physical merchants experimenting with mobile payments, as well as mobile coupons. If you’re selling anything online, or even if you own a physical business, inform yourself more about the potential that mobile marketing can have for you. Many advertising networks such as Google AdWords are now letting their clients target mobile device users.

  • Online TV and Video Use Will Go Up

Online video isn’t exactly anything new and it has been a few years that video sharing websites such as YouTube have been in existence. What might change, however, is that an increased amount of commercial programming, such as live television as well as online video rentals, is going to occur in the next year. Many communications companies have implemented or are thinking of implementing IPTV, which is like regular television, but delivered over an broadband internet connection instead. It’s a bit too early to say whether IPTV is going to become a serious challenger to the currently used cable and satellite systems. It probably won’t take over completely in 2012, but this doesn’t mean that online video and television should be ignored by marketers and advertisers.

Websites that deliver video content, whether it is pre recorded videos, or live television streaming, offer some interesting advertising opportunities for marketers everywhere. This ranges from playing video ads before, during or after content has been played, to including text or graphic advertisements on the site itself. As more TV’s that are sold include internet functionality, combining traditional internet advertising with video advertisements will be something that is expected to be on the increase during the 2012 year. This means that online video will offer increased advertising opportunities, even for marketers that don’t have a huge online advertising budget.

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