Have you used PayPal recently? It has revolutionised the world of online payments and though auction sites like eBay used to have a murky history of people paying for items they never received, PayPal has worked hard to improve the reputation of online purchasing. I’ve even used the dispute mechanism myself and found it efficient enough to guarantee that refunds are always available when a dispute is genuine.
Of course, this is essential. Auction sites like eBay were initially founded on the spirit of trust – you pay before ever seeing the purchased item – but this doesn’t work in the wider world of e-commerce and payments.
Now mobiles are the primary mechanism used for getting online, mobile payment systems are sprouting and hoping to build on the trust that systems such as PayPal have generated over the years they have been around.
But there are so many ways to facilitate mobile payment. One of the most simple is the SMS with a charge above the basic text message charge. This is now often used for charitable donations and car parking fees. But for more complex transactions there are now mobile wallets, contactless payments, and mobile payments using tools including Google.
But payment is not just a technological problem. There are financial transactions taking place using mobile devices and they need authentication and authorisation. This is becoming a major problem for the banking regulators as they try to determine which technologies are safest and which are the most likely to succeed in the market.
Many websites rely on plain old credit card entry, but this is not convenient when using a mobile device on the move. As the world of ecommerce finally settled on just a few preferred methods of online payment, the world of mobile payments will need to do the same, but will it be the banks, regulators, or the technology firms who determine which method succeeds?
Photo by Joe Ross licensed under Creative Commons