When you make a payment using a mobile device, it is called a mobile payment. These regulated transactions are completed digitally without putting or swiping a credit or debit card into a point-of-sale terminal. Therefore, clients can pay online using simple devices, such as mobile phones.

In 2025, mobile payments are expected to account for all digital commerce transactions. Therefore, all organizations must use them to reap the benefits.

Mobile payments are performed between customers and businesses, so most businesses have opened their mobile payment services for a smooth and adaptable shopping experience. You can even make mobile payments from the comfort of your house or in-store.

What is Mobile Payment?

You perform mobile payments when you send money to your family, friends, or businesses using a mobile device such as a smartphone, wearable, or tablet.

Using mobile payments, you can pay any bill with your smartphone, using applications like Venmo, Google Pay, or a smartwatch to make the payment.

Mobile Payments are possible today because of the latest technologies, such as Near-field communication (NFC), mobile apps, QR codes, and encryption. Tokenization, biometric verification, and encryption are payment security techniques that keep users safe.

Types Of Mobile Payments

There are different types of mobile payments, and let’s explore which one is popular in 2024.

Mobile Wallet or E-wallet

Customers can store their credit and debit card information on their mobile devices using digital or mobile wallets. Mobile wallets function similarly to their physical counterparts in that they hold a user’s assortment of credit and debit cards and facilitate effortless access to them while making payments.

Customers can utilize digital wallets, such as Apple Pay, Google Pay, and Samsung Pay, to make payments online or in-store at the point of sale by tapping their phone against an actual card reader with NFC technology.

Most digital wallets require biometric authentication to validate the payment from the user’s mobile device. This usually involves a fingerprint or facial scan.

Mobile E-commerce

The phrase “mobile e-commerce,” or just “m-commerce,” refers to any online transaction a customer makes with a business using a mobile device. (Consider “e-commerce,” but with a decidedly mobile flavor.)

M-commerce can take many forms, such as a customer purchasing through your company’s app or visiting your website through the browser on their mobile device. Digital wallets and SMS payments are also included in the broader m-commerce category.

Portable Peer-to-Peer

Peer-to-peer (P2P) payments on mobile devices include sending money from one person to another.

Mobile P2P payments can be made using banking apps, real-time payment services like the Federal Reserve’s FedNow, or P2P payment apps. Examples of P2P payments on mobile devices include paying someone on Craigslist for a TV or paying a buddy for supper. (Well-known ones are Zelle, CashApp, Venmo, and PayPal.)

SMS Payments

Sending a text message with a payment link to your customer is an SMS payment (sometimes called a payment link).

Your consumer can use their smartphone or tablet to finish the transaction by tapping the link, which will take them to a secure, mobile-friendly payment page.

Mobile Payment as Point of Sale

When a consumer makes an in-person purchase using a mobile payment terminal with their credit or debit card, this is a mobile POS (point of sale) payment.

Mobile card readers are more portable and convenient than their traditional equivalents. They pair with your tablet or smartphone via Bluetooth or the headphone socket on your device, are less cumbersome, and don’t require constant power. You can track your transactions, accept payments, and provide digital receipts to your clients from this paired mobile device, eliminating the laborious manual process involved in reporting and reconciling.

How Does Mobile Payment Work?

Different technologies are used to process it, depending on the kind of mobile payment. Thanks to recent advancements, mobile payments are now flexible and easy for customers and merchants.

  • Mobile Wallet Setup: Consumers download a mobile payment app and associate it with their preferred payment methods, including digital wallets like Apple Pay, Google Pay, or credit or debit cards. Input of further security measures like a PIN or biometric authentication is also possible.
  • Contactless Payments: Customers can use their mobile devices to tap a suitable payment terminal with NFC technology to complete in-store transactions. This is how contactless payment works. To complete the transaction, the gadget securely communicates the payment information, eliminating the need for cards or cash.
  • In-app and Online Payments: Moreover, mobile payment apps facilitate easy purchases across compatible websites and apps. Instead of entering their card information each time, customers can choose their payment option, authorize the transaction, and finish it. Therefore, in-app and online payments are safer options.

Benefits of Mobile Payments

Here are some of the benefits of mobile payments:

  • Convenience: Mobile-friendly websites, digital wallets, and SMS payment links are all incredibly easy ways for customers to make payments. By providing them, you facilitate their purchasing experience and increase the likelihood that they will make another purchase from you.
  • Speed: Financial institutions quickly process payments made via mobile devices. By pressing a button on their smartphone, a consumer can start a mobile payment in seconds, and the transaction completes in minutes. Better still, they allow for quick, contactless, and hassle-free payments rather than a consumer having to rummage through a bucket of nickels to get the correct change as the line grows longer.
  • Reach: With a large portion of adult Americans and people worldwide, or over seven billion people, owning a smartphone, mobile payments enable your organization to tap into a vast client base.
  • Security: One of the main concerns with financial transactions is security. Security and privacy are top priorities for mobile payment technologies. Most mobile payments, whether online or offline, require the user to provide biometric confirmation. It won’t be sufficient just to use a credit or debit card; they will also need to use their mobile device to authenticate the purchase. They can do this by using their distinctive fingerprint, facial signature, passcode, or Apple ID, which only they know. Additionally, tokenization safeguards mobile payment transactions, and devices can be remotely erased in the event of theft or loss to stop unwanted access to credit card information.
  • Integrations: You can combine mobile payment apps with other elements of your e-commerce system. For instance, they function flawlessly with customer loyalty programs, which let clients accrue and spend credits or discounts each time they purchase from your company using a mobile device. Several mobile applications have also increased their services by adding microloans, budgeting tools, and other financial transaction information to assist users in managing their finances more effectively.

Why Do Businesses Need Mobile Payments?

Companies that provide their clients with mobile payment options benefit from several factors. Customers are already benefiting from this method of payment’s convenience, and this trend is anticipated to continue. Every company should consider accepting mobile payments to stay competitive and decrease the likelihood of a consumer choosing a rival.

You can advance your company by implementing mobile payments, boosting revenue, and enhancing client retention.

Enhance Your Business with Cheqly’s Mobile Payment Solutions!

In the modern era of technology, customers want more payment options at their fingertips. Hence, mobile payments are vital for both businesses and clients. Consequently, Cheqly’s virtual debit card can help small business owners enable their customers to make safer and quicker mobile transactions by integrating with digital wallets such as Google Pay, Samsung Pay, & Apple Pay. As a result, this will boost customer satisfaction while cutting operational inefficiencies, thus bringing in more prospects who opt for mobile digital transactions instead of cash ones.

Don’t miss out on future payments. Open a Cheqly account today and start optimizing your business for mobile payments.

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