Mobile transactions are information exchanges, primarily related to finances, that happen over cell phone networks. The most basic mobile transactions involve web-based sales — that is, consumers navigating to websites on their phones to make purchases online. More complicated transactions involve SMS text message payments, apps that convert phones into bar code readers or credit card scanners, and phones that are capable of transmitting payment information to vendors with little more than a tap. Any interaction between a cell phone and a larger computer mainframe that results in some transfer of money may be considered a mobile transaction.
Cell phones today are capable of doing far more than simply placing and receiving calls. The foundation of mobile transactions is the ability to transmit, store, and receive specific information. Most aspects of mobile transactions relate to phones’ ability to access the Internet, as the vast majority of transactions involve transferring data in real time over wireless broadband connections.
Website-based mobile transactions are the most straightforward. When users visit web shopping sites on their phones, they can usually make purchases just as they could from a computer. Websites that are optimized for mobile users often have payment shortcuts and applications that will store credit card and billing information, so that customers do not have to re-enter it at each visit.
Companies have built on this basic model to develop a host of options for mobile payment transactions. Many banks offer mobile banking apps, for instance. These apps allow customers to download certain account information to their phones, then use the phone’s features to check balances, transfer money, and make payments. Similarly, some vendors have created programs allowing cell phone owners to order and pay for goods with their phones, then pick them up in person, either with a credit card payment or an SMS payment. This can allow the mobile-minded customer to skip the line for such things as a morning latte, carry-out pizza, or tickets to a show or movie.
All of these mobile transactions involve using cell phones as a conduit. In some mobile transactions technologies, phones themselves make the purchases. Usually, this involves storing certain data in the phone’s integral memory that will enable to phone to interact directly with vendors. This is often known as “chipping” a phone.
In direct phone purchasing situations, chipped phones need do no more than come into close contact with a cash register or other payment computer in order to finalize a transaction. A grocery store customer with this kind of technology need only tap her cell phone against the cashier’s bar code scanner in order to pay for her items, for example. Sometimes a password or PIN number is required to finalize the transaction, but not always.
Other mobile business transactions also exist. The regular use of cell phones and other mobile devices as credit card readers is one example. Technology enabling cell phones to interact with other real-world applications — starting cars, unlocking buildings, turning on and off electrical appliances — is another. Businesses and marketers are constantly looking for new ways to reach mobile-savvy clientele.
The more that phones are capable of doing, however, the more important mobile security becomes. Credit card data, personal information, and bank access points must be able to be secured should a phone be lost or stolen. Data sent from cell phones also must be safe from skimming or other interception. Secure mobile transactions lend the confidence the industry needs to continue developing.