Editing Mobile payment (section)

== Carrier billing ==
The consumer uses the mobile billing option during checkout at an e-commerce site—such as an online gaming site—to make a payment. After [[two-factor authentication]] involving the consumer's mobile number and a PIN or [[one-time password]] (often abbreviated as ''OTP''), the consumer's mobile account is charged for the purchase. It is a true alternative payment method that does not require the use of credit/debit cards or pre-registration at an [[online payment]] solution such as [[PayPal]], thus bypassing banks and credit card companies altogether. This type of mobile payment method, which is prevalent in Asia,{{Citation needed|date=July 2019}} provides the following benefits: 
*''Security'' – two-factor authentication and a risk management engine prevents fraud.
*''Convenience'' – no pre-registration and no new mobile software is required.
*''Easy'' – It is just another option during the checkout process.
*''Fast'' – most transactions are completed in less than 10 seconds.
*''Proven'' – 70% of all digital content purchased online in some parts of Asia uses the direct mobile billing method<ref>{{cite web |last=Feig |first=Nancy |url=http://www.banktech.com/channels/mobile-payments-look-to-korea/d/d-id/1291396 |title=Mobile Payments: Look to Korea |publisher=Banktech.com |date=2007-06-25 |access-date=2011-09-19 |archive-url=https://web.archive.org/web/20171117022158/http://www.banktech.com/channels/mobile-payments-look-to-korea/d/d-id/1291396 |archive-date=2017-11-17 |url-status=dead }}</ref>

=== Remote payment by SMS and credit card tokenization ===

Even as the volume of Premium SMS transactions have flattened, many cloud-based payment systems continue to use SMS for presentment, authorization, and authentication,<ref>{{cite web |url=http://www.federalreserve.gov/econresdata/mobile-devices/2012-current-use-mobile-banking-payments.htm |title=FRB: Current Use of Mobile Banking and Payments |website=Federalreserve.gov |date=2013-08-02 |access-date=2017-01-07 |archive-date=17 March 2014 |archive-url=https://web.archive.org/web/20140317085131/http://www.federalreserve.gov/econresdata/mobile-devices/2012-current-use-mobile-banking-payments.htm |url-status=live }}</ref> while the payment itself is processed through existing payment networks such as credit and debit card networks.  These solutions combine the ubiquity of the SMS channel,<ref>{{cite web |url=https://techcrunch.com/2012/05/29/gartner-over-172b-in-mobile-payments-in-2012-with-212m-users-sms-web-most-popular-transaction-methods/ |title=Gartner: Over $172B In Mobile Payments In 2012; SMS, Web Most Popular Routes |website=TechCrunch.com |date=2012-05-29 |access-date=2017-01-07 |archive-date=5 July 2017 |archive-url=https://web.archive.org/web/20170705015406/https://techcrunch.com/2012/05/29/gartner-over-172b-in-mobile-payments-in-2012-with-212m-users-sms-web-most-popular-transaction-methods/ |url-status=live }}</ref> with the security and reliability of existing payment infrastructure. Since SMS lacks [[end-to-end encryption]], such solutions employ a higher-level security strategies known as 'tokenization' and 'target removal' <ref>{{cite web |url=http://indiamicrofinance.com/wp-content/uploads/2008/09/Tokenization-Whats-next-after-PCI.pdf |title=Tokenisation : What's next after PCI? |website=indiamicrofinance.com |access-date=2017-01-07 |archive-date=18 January 2017 |archive-url=https://web.archive.org/web/20170118043340/http://indiamicrofinance.com/wp-content/uploads/2008/09/Tokenization-Whats-next-after-PCI.pdf |url-status=live }}</ref> whereby payment occurs without transmitting any sensitive account details, username, password, or PIN.

Point-of-sales mobile payment solutions have not relied on SMS-based authentication as a payment mechanism, but remote payments such as bill payments,<ref>{{cite web |url=http://www.insurancetech.com/architecture-infrastructure/cure-insurance-coo-eric-poe-dishes-on-te/232301336 |title=CURE Insurance COO Eric Poe Dishes on Text-to-Pay &#124; Insurance & Technology |website=Insurancetech.com |access-date=2017-01-07 |archive-date=17 March 2014 |archive-url=https://web.archive.org/web/20140317212040/http://www.insurancetech.com/architecture-infrastructure/cure-insurance-coo-eric-poe-dishes-on-te/232301336 |url-status=live }}</ref> seat upgrades on flights,<ref>{{cite web|author=Jukka Salonen |url=http://www.hightechfinland.com/direct.aspx?area=htf&prm1=794&prm2=article |title=High Technology Finland &#124; Innovation in Finland |website=Hightechfinland.com |access-date=2017-01-07 |archive-url=https://web.archive.org/web/20140317213342/http://www.hightechfinland.com/direct.aspx?area=htf&prm1=794&prm2=article|archive-date=2014-03-17}}</ref> and membership or subscription renewals are commonplace.

In comparison to premium short code programs which often exist in isolation, [[relationship marketing]] and payment systems are often integrated with [[Customer relationship management|CRM]], [[Enterprise resource planning|ERP]], [[marketing automation|marketing-automation platforms]], and [[reservation systems]]. Many of the problems inherent with premium SMS have been addressed by solution providers. Remembering keywords is not required since [[session management|sessions]] are initiated by the enterprise to establish a transaction specific context. Reply messages are linked to the proper session and authenticated either synchronously through a very short expiry period (every reply is assumed to be to the last message sent) or by tracking session according to varying reply addresses and/or reply options.<ref>{{Cite web|url=http://www.google.sr/patents/US20150356630|title=Method and system for managing spam|last=Hussain|first=Atif|access-date=10 November 2017|archive-date=11 November 2017|archive-url=https://web.archive.org/web/20171111044252/http://www.google.sr/patents/US20150356630|url-status=live}}</ref>

=== Direct operator billing ===
Direct operator billing, also known as mobile content billing, [[WAP billing]], and carrier billing, 
requires integration with the mobile network operator. It provides certain benefits:
*Mobile network operators already have a billing relationship with consumers, the payment will be added to their bill.
*Provides instantaneous payment
*Protects payment details and consumer identity
*Better conversion rates
*Reduced customer support costs'' for merchants
*Alternative monetization option in countries where credit card usage is low

One of the drawbacks is that the payout rate will often be much lower than with other mobile payments options. Examples from a popular provider:
* 92 percent with PayPal
* 85 to 86 percent with credit card
* 45 to 91.7 percent with operator billing in the US, UK and some smaller European countries, but usually around 60%<ref>{{cite web |url=http://bango.com/mobilebilling/payment_network.aspx |title=Payout rates from one of the major billing aggregator, Bango |publisher=Bango.com |access-date=2011-09-19 |url-status=dead |archive-url=https://web.archive.org/web/20100917211707/http://bango.com/mobilebilling/payment_network.aspx |archive-date=2010-09-17 }}</ref>

More recently, direct operator billing is being deployed in an in-app environment, where mobile application developers are taking advantage of the one-click payment option that direct operator billing provides for monetising mobile applications. This is a logical alternative to credit card and Premium SMS billing.

In 2012 Ericsson and [[Western Union]] partnered to expand the direct operator billing market, making it possible for mobile operators to include Western Union mobile money transfers as part of their mobile financial service offerings.<ref>{{cite web |url=http://www.mobilepaymentstoday.com/article/191065/Ericsson-Western-Union-partner-to-push-mobile-financial-services |title=Ericsson, Western Union partner to push mobile financial services |work=Mobile Payments Today |date=February 28, 2012 |access-date=2013-01-25 |archive-url=https://archive.today/20130216113727/http://www.mobilepaymentstoday.com/article/191065/Ericsson-Western-Union-partner-to-push-mobile-financial-services |archive-date=February 16, 2013 |url-status=dead }}</ref> Given the international reach of both companies, the partnership is meant to accelerate the interconnection between the m-commerce market and the existing financial world.<ref>{{cite web |url=http://www.lightreading.com/document.asp?doc_id=218000 |title=Ericsson Teams with Western Union |work=Light Reading |date=February 27, 2012 |access-date=2013-01-25}}</ref>