Mobile Payment Models Show Why Mobile Service Providers and App Providers Are in the Business

Some would argue there are just three primary ways for U.S. consumers to make retail payments, and the methods show why mobile service providers, application providers and banks are getting into the business.

The three primary methods, some would say, include direct billing by a mobile service provider, paying by credit card or debit card and using an "online wallet" such as PayPal or Google Checkout.

Direct operator billing has been possible for many years, but relatively few retailers have embraced it, in many cases because the transaction charges are higher than when using a credit card or debit card. That has been a problem especially for the sort of small-retail-value transactions many believe will drive use of mobile payments.

Credit cards and debit cards are routinely used by consumers for online commerce as well as retail purchases, and mobile payments simply represent a move by credit and debit card issuers to hang on to market share and revenues they already are getting.

Online wallet services such as PayPal, Amazon Payments, and Google Checkout mostly have been used for online payments and money transfers, typically by use of applications that combine log-ins, passwords, shipping addresses, and credit card details in one central place, linking credit card accounts with the other payment process features.

In all three cases, mobile payments represents a move from an existing offline or online payment mode into a mobile mode, where the phone displaces the credit or debit card.

So the interest in mobile payments is rather obvious. Banks that issue credit cards and debit cards want to hang on to the business they've got, while mobile service providers and payment application vendors want to conquer new markets that represent net revenue growth.

Understanding Mobile Payment Models | Banking & Finance > Banking, Lending & Credit Services from AllBusiness.com