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Preparing for The Fourth Pillar of Mobile Payments: Payments to Merchants and Retailers

Consumers have become comfortable using smartphones for bill payments and other financial transactions; experts predict that mobile devices will become a primary tool for managing banking relationships.

Defined in terms of their recipients, mobile payments fall into four main categories that can be referred to as the Four Pillars of Mobile Payments:

  • Paying Billers – making payments to a biller using a mobile app provided by a financial institution or the biller
  • Paying Self – using a mobile device to make transfers and deposit checks into a personal bank account via mobile deposit and funds transfer capabilities
  • Paying Other People – making person-to-person (P2P) payments to individuals or groups of individuals from a mobile device
  • Paying Merchants and Retailer – in-store purchases via mobile proximity payments (making near field communication (NFC), quick response (QR) code, or cloud) or online via apps and mobile websites

The first three pillars of paying billers, paying self and paying other people account for the majority of mobile payments today.

The Elusive Fourth Pillar
Various visions and definitions of mobile payments to merchants and retailers, which can also be described as mobile commerce, currently coexist. Three distinct types of mobile commerce payments exist today, based on the technology that is used. They include mobile point of sale (POS) payments, mobile proximity payments and mobile remote payments.

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