IT GRC Forum

As summer heats up, so does mobile payment  – a hot topic between major credit card companies, mobile carriers, and mobile manufacturers.

mCommerce, or mobile commerce, refers to financial transactions conducted via smartphones or other mobile devices. But are mobiles really meant for financial transactions?

During the latter half of the past decade, a heated battle has been fought around the world to determine which payment method will take center stage in the coming years. Many believe mobile payment will leapfrog what is known as EMV, which stands for Euro MC/Visa, or chip and PIN credit card technology, and that soon enough chip and PIN technology will go the way of the magnetic striped credit card.

Mobile payment has been around for years in numerous forms for purchases such as downloading music, ringtones and various other services and is now gaining traction for retail purchases in the U.S. But its implementation in the U.S. is a bit slower due to a lack of standardization of payment methods and the overall security concerns of mCommerce. Some consumers in the U.S. have had bad experiences with criminal hacking and data breaches and are concerned about their security and are waiting for the various handset manufacturers (those who make the phones), mobile carriers (those who provide mobile service) and third party technology providers (those who make the technology facilitating financial transactions) to agree on standardization leading to more secure transactions.

Mobile banking, m-banking, or SMS banking refers to online banking that occurs via mobile phone or PDA rather than a PC. The earliest mobile banking services were offered over SMS, but with the introduction of smartphones and Apple iOS, mobile banking is being offered primarily through applications as opposed to text messages or a mobile browser.

Mobile payments generally involve three participants: the mobile device, the merchant, and a financial service provider or trusted third party.

Near Field Communications, or NFC, is the exchange of information between two devices via wireless signal. For example, a wireless signal emitting from your cell phone can act as a credit card when making a purchase.