What Are the Differences Between Mobile Payments, Mobile Wallet and Mobile Banking?
Mobile marketing and commerce is becoming the most important avenue to market to and transact with your customers in the modern world. This type of marketing involves the use of any mobile device, predominantly smartphones and tablets, to complete various types of transactions. These can include mobile payments, mobile banking, mobile money and much more. Each allows you to use your mobile device in the way that you would traditionally need to use a bricks and mortar bank, a credit card or even cheques. Mobile payments are increasingly competing with these ‘traditional’ methods of payment.
If you’re embarking into the mobile market it’s important to make sure you understand not only what all these terms mean but also how they are going to be similar to each other and how they will be different. This is going to allow you to maximize this avenue for your business – after all, how can you expect someone to engage with your mobile marketing if you don’t even know what the terms mean or how to use them correctly? It’s going to be important to understand the best way to utilize each of these aspects of your mobile needs.
For example, if you go to your credit card’s website on your tablet to make your monthly payment, this is you using a mobile payment. This is a way of making sure that you get bills paid much faster because the money can be automatically withdrawn from an account on a specified date.
Mobile payments are a way of taking care of bills or other monies/debts or expenses that are due by payment using your personal mobile device in conjunction with an app as the transaction terminal, eg Square. Mobile Payment can use a traditional bank account, or a Mobile Money account. Instead of credit cards that automatically withdraw money as soon as they are swiped, the mobile payment will withdraw the money on the date provided. For example, you can set up a payment to be made three days in advance. Instead of taking the money immediately it will wait and draw out the money on the date you have requested.
Generally when someone refers to making a ‘mobile payment’ this is what is being referred to. What you should know however, is that this is not always the case. Another common method of using the term ‘mobile payments’ is to refer to something that is more commonly known as ‘mobile money’ or a ‘mobile wallet.’
Mobile Money (Mobile Wallet)
When you talk about mobile money (mobile wallet), instead of referring to bills paid over a mobile device, what is more commonly meant is the immediate payment at a retail or food establishment with a Payment App on your mobile device. There are several new apps that will allow this service such as Apple Pay, Flint Mobile, Samsung Pay, or PayPal Here. Any of these services will allow you to pay for goods or services without the need for cash, debit or credit card.
Any of these services will require some sign up, registration or setup in the first instance. If you think about the terminology – Mobile Wallet, it refers to your mobile device acting as your physical wallet. Your mobile device will generally have no pockets or zippers, so how will you get money in there? You will register with one of services such as the above and each will require a few steps to validate you as a user, access some funds (through a direct transfer of funds into the service from your bank account or credit card, OR an association of a credit card with that service). Once the mobile wallet is funded you are ready to use your Mobile Wallet. The app for the service you have selected will act just like a credit card, or even a proxy for a credit card and the money will be deducted instantly and transferred to the retailer as payment.
One thing to understand with these types of services however is that they are not accepted everywhere. The retailer or business that you wish to pay needs to also have this type of application or a service that will accept payments this way. Eg. If you would like to use PayPal Here, then the business you would like to transact with must also be offering the PayPal Here option, it is only at this point that they will be able to accept your payment. More businesses are transitioning to accept mobile payments but it’s still important to understand that you’ll need to carry cash or a credit card with you whenever you go out just in case the places you decide to go haven’t decided to upgrade yet.
Mobile banking is likely one of the most well-known applications related to money and your mobile device. This is because it’s an application that has been around for quite some time. With mobile banking you are able to use your mobile device to connect with your bank accounts and manage financial transactions through those accounts. You don’t need to worry about actually going into the bank or credit union or financial institution that you use or even calling them on the phone. Instead, you connect your accounts to your mobile device and use that to manage your financial needs.
With a mobile device and mobile banking you are able to see your balance in any and all of your accounts, transfer money between accounts, send payments and in some instances even deposit cheques without ever having to make a special trip. You only need to download the banking application for your financial institution. In some instances you may need to go into the financial institution at least once just so you can tell them to set up this process on your account. Even if you have all the information on the accounts to put into the app you may not be able to access anything until your bank provides you with access.
Here and now
There are a number of different mobile commerce applications that are in use right now. Each is used to varying degrees and by different market segments and for different purposes, so it’s important to understand them all. If you’re running a business you’ll want to consider how you will conduct your business transactions in regards to mobile money.
As the applications to cater for transacting via a mobile/smart device increase and as more businesses make the options available, more of your customers will come to expect these great, new services. Let’s face it – it’s simpler for them than carrying cash or even a credit card.
If you are simply looking for an easier way to carry out the administration of your payments and banking within your business, you should definitely be using mobile banking. Not only does it allow you to quit running to the bank so often, it’s great for the environment. You’re not using as much fuel driving, you don’t need as many paper deposit slips or even cheques, and you’re reducing the amount of paperwork involved in your transactions.
Mobile commerce really is the future coming to us. It’s a way of advancing our world and making sure that our payment processes really our much simpler.