Mobile Payment Terms and Concepts Explained

Do you know what a mobile payment is? Of course, you’ve probably heard the term. But what does it really mean? Is there more than one type of mobile payment? Is there a difference between online payments and mobile payments? What is a digital wallet? Terms, such as online payment, digital wallets, Paypal, Apple Pay and Google Pay, are associated with mobile payments, but what do they all specifically mean?

The amount and variety of terms used in this field alone are enough to give someone a serious headache. This blog post aims to explain the different notions in simple terms so you can better understand what mobile payment is all about.

What is mobile payment?

Mobile payment is defined by the ability to buy a product or a service with a mobile device. Mobile devices include mobile phones, tablets and smartwatches. This method of payment is a modern alternative to paying with cash or with bank cards.

A transaction can be debited on a bank card, e-wallet, mobile wallet or directly from an invoice. You can fill an e-wallet through an agent, merchant or with a credit card. You can also use mobile payments to transfer money to individuals or businesses.

Do not confuse online payments, e-payments and mobile payments

You can process online payments through transactional websites. For example, if you buy the latest best-seller on a bookstore’s website, you are processing an online payment.

Many payment options will be available at the checkout. You can usually pay with a credit card or prepaid card (Visa, Mastercard or American Express). Depending on the website, you might also be able to pay with Paypal or with another e-payment solution, such as Google Pay, Apple Pay and Samsung Pay.

Online payment on a transactional website
Carry out an online payment on a transactional website with a mobile phone.

Online payments are made using e-payments, also referred to as electronic payments. E-payments refer to all payments made by credit or debit cards, direct deposits and e-cheques.

On the other hand, mobile payment solutions allow buyers to pay with a mobile device. We will elaborate more on this topic.

Digital wallets

Digital wallets, or e-wallets, are applications that can be downloaded on your mobile devices. These digital wallets can be manually or automatically refilled with a bank card. Businesses that want to offer faster payment options to their customers often use this payment method. This is the case of Starbucks, Amazon, Target and Walmart.

Many businesses are now offering mobile wallet apps. Apple, Google and Samsung are amongst many other mobile wallet providers. Mobile wallets are apps that safely store your credit card information so you can use your mobile phone to process payments instead of using a bank card. A transaction with a mobile wallet application will often require either a biometric identification or another form of security authentication.

Apple Wallet and Google wallet
Apple Wallet and Google wallet are popular digital wallets.

Most financial institutions have their own mobile application that users can download. These apps let you transfer money to other accounts on your mobile phone. Certain banking institutions also offer their own mobile wallets.

Financial institutions mobile application

The mobile wallet is a payment method that uses NFC technology (Near Field Communications).

Types of mobile payments

There are three types of mobile payments:

1. Remote payment

You can process remote payments from a transactional online website or an app on your smartphone. This process is similar to online payments made on a computer.

Mobile texting payment solutions also fall under this category. Mobile texting payment solutions allow buyers to purchase goods and services through a text message sent to a mobile device.

2. Contactless payment

Contactless payments allow buyers to tap their mobile phones on a point-of-sale terminal equipped with this technology. This method is commonly used with credit and debit cards. It therefore needs to be processed in person.

Contactless payment

3. Mobile-to-mobile payment

This type of mobile payment lets users transfer funds from one mobile device to another mobile device via an app that supports this type of transfer. These apps can connect to your financial institution’s account, or with a debit or credit card. Some of the most popular apps are Paypal, Zelle, Cash app, Google Pay, Apple Pay and Facebook Messenger.

Mobile-to-mobile payment

Benefits of mobile payments

For consumers


The main benefit of this type of payment is that you no longer need to carry your wallet with you if your banking information has previously been stored in your smartphone. This implies that you don’t need to carry cash with you and that you can kiss goodbye to the days when you had to run to find an automatic teller machine (ATM). The simple fact that you no longer need to look for your wallet in your purse or backpack for your cards means you are saving more time.


Not having to carry a wallet around means that you no longer have to worry about having it stolen or losing it. If your wallet gets stolen or misplaced, you will lose your cash and will need to cancel and replace your bank cards to avoid fraud. Because of this, mobile payments are considered more secure since buyers need to authenticate their identity to validate a transaction by either using a secure PIN number, their digital thumbprint, facial recognition or any other authentication methods. Data is encoded and credit cards are represented by a token made up of cryptograms.


Mobile payments help simplify and enhance the customer experience. For one, a business could decide to send invoices through text message to its customers. Let’s take a bike shop, for example. The shop could send invoices for repairs via text message to its customers. The customers would then be able to conveniently pay for the invoices, at their convenience, directly on their smartphones before going back to the shop. Customers therefore save time because they won’t have to line up to pay for their repairs. What’s more: they’ll get their bikes faster!

For businesses

Mobile payments are simple, quick, safe and functional for businesses. Mobile payments are part of an existing and growing group of payment methods that aim to offer the best purchasing experience for customers to increase overall satisfaction.

For mobile payments through texts, a business could, for example, save time by sending payment requests to one or many customers at a time. These payments could be made simultaneously by each customer without impacting payment processes.

In addition, businesses can make partial or full refunds through text message, which helps simplify operations.

Learn more on the benefits of mobile SMS payment solutions with Kimoby Pay.


Mobile payments are used worldwide and are constantly evolving to meet customer needs and business requirements. Customers take into consideration the different payment options offered to them by each business since this is perceived as a sign of a customer-driven mindset. It’s therefore important for businesses to offer a wide selection of payment methods to retain existing customers and attract new ones.

Contact us today for a demo on adding a text messaging payment solution to your business offering.


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Setting Up Mobile Payment with Kimoby Pay