What are mobile payments?

Mobile payments are any payment made using a mobile device. These regulated transactions are carried out digitally, without a credit or debit card being swiped through or inserted to a point-of-sale device. With an ever-increasing dependence on smartphones, it makes sense to let customers pay in this convenient manner.

A business that accepts mobile payments gives its customers greater flexibility. There are many types of mobile payments that can be utilised by a company. Whether selling online, in-store or off-site, mobile payment methods give customers a seamless, flexible purchasing experience.

With mobile payments predicted to make up 79% of all digital commerce transactions by 2025, all businesses need to implement them to take advantage of the benefits.

Read on to learn more about mobile payments, including an expert from the kevin. team giving unique information on mobile vs. in-app payments, their history and where mobile payments will be going in the future.

What are the types of mobile payments?

The types of mobile payments include point-of-sale (POS) payments (also known as in-store payments but shortened to POS payments hereafter) and remote (internet) mobile payments.

Point-of-sale/in-store mobile payments solution

A POS/in-store mobile payment is contactless. It takes place at the merchant’s business.

These payments are often completed with a physical credit or debit card, which is swiped through the POS device or inserted into it. This form of payment, though widely accepted, has a serious drawback for businesses: the card processing fees.

That isn’t the only option for POS mobile payments, however. At kevin., we provide POS account-to-account payments (A2A) that allow for instant settlements without the card processing fees. kevin. POS A2A payments are made with near-field communication (NFC).

The types of POS/in-store payments include

• Near-field communication (NFC)
• Sound waves-based payments
• Magnetic secure transmission (MST) payments
• Mobile wallets
• Quick response (QR) code payments

Each of these types is detailed below.

Near-field communication (NFC) contactless payments

NFC allows multiple devices to communicate with each other. A mobile device needs to be held close to the POS system, and the payment goes through nearly instantaneously. The technology used in NFC payments involves close-proximity radio frequency identification. Encrypted data is directly transferred to the point-of-sale devices rather than using a chip or PIN technology, both of which take longer to process than the more quick, efficient NFC payment.

Sound waves-based payments

Sound waves-based mobile payments are also called sound signal-based mobile payments. This payment method is where the transaction gets processed through unique sound waves containing encrypted data – no need for the internet. The sound waves travel from a terminal to a mobile phone, conveying payment details. The customer’s phone converts that data into analogue signals, which then finalise the transaction.

Magnetic secure transmission (MST) payments

Another way to complete a mobile POS payment is through magnetic secure transmission. MST involves a mobile device giving off a magnetic signal. This signal imitates the magnetic strip found on a credit card. The POS terminal then picks up the magnetic signal and processes the payment as if it were a physical card being swiped through the machine.

The majority of newer terminals accept MST. Older terminals may need a software update before MST payments can be accepted.

Mobile wallets

A mobile wallet is a digital wallet that stores your credit or debit card details. It enables you to pay in-store using your mobile device. The consumer must download a mobile wallet app on their phone, then add their card information. According to the Global Payments Report, card usage is increasingly shifting to pass-through mobile wallets. All data is securely stored. A mobile wallet is most often used with NFC or a QR code.

Quick response (QR) code payments

Most often, QR codes are seen in advertisements or on product labels. They are, however, gaining popularity as a form of payment. Typically, a QR code is used through a banking app that already has your card details or a store app where the consumer’s card details can be connected.

A customer uses a mobile camera to scan the QR code, which will then initiate the payment. The customer’s mobile wallet is debited for the amount of purchase. Since no credit card details need to be manually entered, QR codes are considered to be more secure than other alternatives, which may result in the theft of credit card data. Try out the QR code below and see where it takes you.

Remote (internet) mobile payments

With the internet, a person can pay via a phone browser or in an app to complete a remote online mobile payment. A customer might manually enter card details through a website to complete an order, go into a mobile app to charge one of your bank cards for a purchase, use PayPal or click on a link on a digital invoice to make the payment. kevin. makes it simple to collect online payments. Customers add their bank account and pay with a single click.

There are three types of remote mobile payments:

• Internet payments
• Payment links
• Mobile banking

Each of these types is detailed below.

Internet payments

Payments can be made over the internet via a web browser like Safari or Chrome, or via a mobile app. Typically, a consumer would need to enter their credit card details on a payment page, or have a preapproved card connected to a mobile app that can be charged. Online money remittance services such as Paypal, or links to digital invoices, can also be used to make internet payments. The one-click payment option offered at kevin. Is a type of internet payment, since it’s completed within an app.

Payment links

Payment links overlap with internet payments and are also referred to as pay by link. It involves a button or link to pay being sent by email, text message, social media or messaging app. The receiver of the link can click on it, and then a checkout page will open up in an internet browser. The receiver enters their card details, and then the transaction is completed.

Mobile banking

Mobile banking has become popular in certain countries, such as the UK and Sweden. It can be used to transfer money between private individuals or to pay bills. The consumer can use their bank account to conduct financial transactions. Each bank has their own verification procedures to ensure the person setting up the mobile banking is the owner of the bank account.

Once completed, the consumer can log into their phone to view their financial information and complete transactions.

How do mobile payments work?

Mobile payments work by the use of various forms of technology, depending on the type of mobile payment. Recent developments have made using mobile payments flexible and seamless for both the merchant and the consumer.

Why do businesses need mobile payments?

Businesses that offer mobile payment solutions to their customers can expect a range of benefits. Customers today are taking advantage of the ease of using this form of payment, and that is only expected to increase in the future. To avoid getting left behind and reduce the chance of a customer going to a competitor, every business should consider accepting mobile payments.

By adopting mobile payments, you can take your business to the next level, increasing sales and improving customer retention.

What are the benefits of mobile payments?

The benefits of mobile payments include speed, convenience and security. Since it’s easy to get started with this payment method and the technology is highly useful, consumers have quickly embraced utilising them.

Convenience

Not every customer wants to carry around cash, but most will nearly always have their phone with them. Mobile payments mean a customer doesn’t need to carry a wallet to make a payment. And looking for a wallet at the bottom of a bag isn’t very efficient, while most people tend to have their phones at the ready.

Speed

Nobody enjoys waiting for a lengthy transaction to go through. A contactless mobile payment usually takes just a couple of seconds. That means no buildup of queues while a consumer waits for a payment to process and no abandoned cart if the checkout occurs online.

Thanks to their speed, mobile payments are user-friendly for consumers and allow a business to expedite all transactions.

Security

With mobile payments, there are multiple levels of dynamic encryption. That includes touch ID, PIN inputs and tokenisation. These features make this payment method secure to use. Moreover, the authentication measures involved in mobile payment systems aren’t used with other payment methods. With these broad security controls, mobile payments can be considered very safe.

Which mobile payment system is best?

There is much to consider if you’re thinking about which mobile payment option is right for your business. It makes for an easy and quick purchasing experience for businesses and customers alike.

The factors to consider when looking at a mobile payment processor should be reliability, the applicable transaction fees that the business will need to pay and whether there is an app available to use. Some mobile payment providers have additional features that add quite a bit of value, such as tracking certain customer data or integrating a loyalty program.

kevin. offers account-to-account (A2A) payments for businesses using NFC technology. You can use your existing POS terminal, which means customers get the same great user experience. Businesses enjoy instant settlements instead of waiting for days or even weeks. Skip the card processing fees and enjoy greater profits.

Getting started is easy, too. Just integrate the kevin. Mobile POS NFC SDK to your business mobile application and you can start accepting A2A payments with your in-store POS terminal. If you ever run into any concern, our experts are here to help.

How to accept mobile payments

To accept this method of payment, you must choose a payment service provider that supports in-app mobile payments. kevin. offers a mobile in-app payment solution that makes your checkout flow secure and smooth, integrating to your native app. Since customers will abandon their cart at the slightest inconvenience, you want to make sure your transaction is unified and enjoyable. No third-party windows will pop up, and everything will be tailored to your brand.

kevin. helps companies implement the right solution for its particular needs. The advantages of working with kevin. to accept mobile payments include

• Instant payments. All around Europe, transactions are completed quickly and securely.
• User interface customisation. Match your brand colors, fonts, and other components to give your customer consistency.
• Security. Since our solution complies with EU security requirements, including PSD2 and GDPR, you get an extra layer of security to lower the risk of fraud.
• Simple integration. Our in-app payment solution can be used in iOS or Android natively, and cross-platform frameworks. Plus, you’ll get access to extensive developer-friendly documentation.

Is there a difference between mobile payments and in-app payments?

To get the best possible answer to this question, we turned to Elvis Sinjis, a POS/Mobile Product Owner on the kevin. Mobile Team.

“If this question was asked 25 years ago, nobody would have imagined that our most important payments would be made via a mobile phone today.

Consumers are migrating their attention and wallets to mobile, as over $320,000 flowed through app stores every minute of 2021! That’s an increase of nearly 20% from previous records the year before. It doesn’t seem to stop.

The wording “mobile payments” started being used for the first time in the late 2000s. That was when the first patent describing “mobile payment systems” was filed, which is as follows:

‘The present invention relates to a remote, secured, prompt and accurate payment system, and more particularly to a mobile payment system and method thereof, wherein the customer's payment is verified by sending confirmation back to the customer's device, so as to prevent passing any personal confidential information such as credit card numbers, customer's name and signature to the merchant.’

Over 20 years later, this definition is still widely used. But to understand the difference to another buzzword in the payment world, “in-app payments,” mobile payments can be defined as those done with the outside world, eg when a mobile interacts with another hardware device (POS devices, other phones, etc) while in-app payments are done using only an app on your mobile device.

The main aim of an in-app payment is to buy subscriptions, consumables (game boosts, coins that expire and non-consumables (premium features that are purchased and never expire).

In-app payments are strictly controlled by the operating system’s provider store (App Store, Google Play, Huawei Store). That can make a merchant’s life harder depending on the type of fee the merchant pays after the user has signed up for a subscription or bought game coins.

Fortunately, the Digital Market Act may change that in favour of merchants and providers like kevin. It would enable merchants to have lower fees and prosper in the app world.

In conclusion, mobile payments are not the same as in-app payments, as they embody different ideologies and where and how the payment is completed.”

What’s the future of mobile payments?

Thanks to enhanced security and extreme convenience, the adoption of mobile payments will continue to increase in the future. In 2021, the share of mobile commerce exceeded that of desktop commerce, according to the Global Payments Report, and there is no reason to think this will discontinue. And kevin. is there to support any business that wants to take advantage of the many benefits of mobile payment solutions.

In the first half of 2022, global app spending reached $65 billion. That was up only slightly, however, from the same period in 2021, thanks to the hypergrowth fueled by the pandemic finally slowing down.

Overall, however, the app economy is continuing to grow, having produced a record number of downloads and consumer spending across both the iOS and Google Play stores combined in 2021, according to the latest year-end reports. Global spending across iOS and Google Play last year was $133 billion, and consumers downloaded 143.6 billion apps.

Get started with kevin. mobile payments

There’s nothing like a slow checkout process to make a customer bail out of their purchase. In fact, a study shows that 7 of 10 customers abandon the checkout process during the final step!

In making sure your customers have a smooth experience, you’re reducing the money lost on cart abandonment – which is estimated to total more than €4.5 trillion around the globe. Help your customers get over this hurdle by looking for a seamless mobile payment experience, just like kevin. offers.