What are mobile payments?

what are mobile payments

Thursday, 21 October 2021, 2 minute read

Each year mobile payments are becoming increasingly more popular. It’s forecasted that the global transaction value will increase by 28% between 2019 and 2024. This increase is a tremendous amount and something we’ll have to adapt to in the future.

What are mobile payments?

Mobile payments are transactions made for either a product or service via a portable electronic device such as a smartphone or tablet. This allows users to pay, send, or transfer money from their portable devices using mobile payment technology to businesses, friends, family, or themselves, without having to visit a bank.  

Here are some of the types of transactions you can perform with mobile payments:


The most common use of mobile payments is via mobile wallets and QR codes. Mobile wallets work by providing a smart device with your banking details. With the help of near-field communication technology (NFC), you’re able to make contactless payments on card machines when placed 2” away from the device. QR codes are similar, but require users to scan the code using their device's camera. Users are then redirected to a webpage or app to complete the payment.


Mobile payments have adapted to point-of-sales in three different methods. These are magnetic secure transmission (MST), Sound wave-based, and NFC payments. Each has its unique way of transferring banking data while remaining contactless, but different payment applications use other methods. For example, Google Pay uses NFC payments, whereas Samsung Pay relies on MST payments.  

Remote payments

Lastly, remote payments can be performed via the internet, payment links, text messages, direct carrier billing, or mobile banking. Either way, you’ll be redirected to your mobile banking application to provide login details before sending the funds. This additional layer of security helps protect users from sending money erroneously.

Crezco can help

We process payments for free and settle them instantly. They’re more secure than card payments and we can process higher amounts, up to £1,000,000 per transaction. Find out about how Crezco works, why we’re free, and how we can help you by getting in touch.

Start for free

How do mobile payments work? 

To better understand the above, it's beneficial to understand how mobile payments work. The example below looks at in-shop payments.

To pay with your portable smart device at a shop’s checkout, enable your mobile payment application and situate it near the NFC-enabled payment terminal. If your smart device is around 2 inches away from the terminal, payment should be made.   

Both the NFC-enabled payment terminal and smart device are talking to each other. By using radio frequency, they can transfer confidential, encrypted data (similar to magnetic stripe and chip card transactions). Once the payment terminal can accept the data, the payment will be verified via a receipt.  

Most NFC payments work the first time and in a matter of seconds. One of the main reasons NFC payments are so popular is due to their speed and convenience, so don't be surprised if they surpass traditional chip & PIN payments in the near future.

Although not required, you will often have a payment receipt, also known as a remittance advice, letting you know the payment has been made.

See how we can help you simplify your payments