Mobile payments are defined as the use of a mobile device such as Cellular Phone, Smartphone and Personal Digital Assistance (PDA) to conduct a payment transaction in which money or funds are transferred from a payer to a receiver via an intermediary, or directly without an intermediary. So Mobile Money helps to reduce the bottlenecks that created by cash, check and credit cards.
There have two primary models for mobile payment, which is Premium SMS, and Mobile web payments (WAP).
Premium SMS is based transactional payments, means that the consumer sends a payment via an SMS text message to a short code and a premium charge is applied to their phone bill.
Mobile Web Payments , which is the consumer uses web pages displayed on their mobile phone to make the payment.
Adoption of mobile and electronic payments systems:
- Compatibility: Compatibility captures the consistency between an innovation and the values, experiences, and needs of potential adopters.
- Complexity: Complexity and problems with usability have contributed to the low adoption of a variety of payment systems, including smart cards and mobile banking.
- Costs: There is a direct effect on consumer adoption if the cost of a payment transaction is on to customers. In order to gain a competitive advantage, a shopper in electronic channels should attentive to price the transaction costs of mobile payments to be low enough to make the total cost of purchase competitive with the physical world prices.
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