How does mobile billing and payments work?

Different methods exist for mobile billing and payments. We can expect to see an increase in the number of complicated (and simplified) ways for paying for virtual goods in the future. But for now, these are the methods we are all familiar with.

The “grandfather” of mobile billing is the SMS text. It is the oldest and simplest way of charging customers for goodies. The customer sends a text and asks to have the product charged to his mobile bill. As soon as the payment is received, the merchant gets a notification and he releases the product to the consumer.

The problem with this kind of billing is that it takes a bit of time and there is always the risk of info/ notifications getting lost or delayed. If you are in a hurry to obtain your product, this method can cause much frustration.

To help solve this problem, direct mobile billing was introduced. It is faster, more secure and customers don’t need a credit card, nor do they have to register on another site beforehand. This allows merchants to reach people anywhere in the world. When customers want an online product, all they have to do is choose the mobile payment option and then enter a pin and/or password into their mobile phone. The charge will then be added to their phone bill.

It is also possible to make mobile billing and payments via the internet. It is the exact same process as doing it from a computer, but it has the added advantage of the “anytime, anywhere” approach – you aren’t restricted to your chair behind the computer. It also grants the opportunity for follow-up purchases because the merchant can send links to other sales pages. However, the issue of having a credit card or Paypal account for payment still remains.

In general, purchasing goods using a mobile phone is fast becoming a trend due to the sheer convenience of it. It saves people the hassle and cost of physically visiting merchants. Although there is still room for much needed improvement, mobile billing and payments might soon become the overall preferred method of paying for any type of services or products (not just virtual ones) in the not so distant future.

Herman Cremer
A seasoned professional with 20 years of experience in digital & mobile solutions and advertising.

 

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