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M-payment (mobile payment) is a point-of-sale payment made through a mobile device, such as a cellular telephone, a smartphone, or a personal digital assistant (PDA). Using m-payment, a person with a wireless device could pay for items in a store or settle a restaurant bill without interacting with any staff member. So, for example, if a restaurant patron wanted to pay quickly and leave the restaurant on time to get to an appointment, the bill could be paid directly from the table - without waiting for a server to bring the check. The patron would simply connect to the cash register with a wireless device, punch in the table number and bank personal identification number (PIN), and authorize payment. According to Orange Mobile Payment (a Danish company), the entire transaction should take no more than 10 seconds.
The earliest m-payment trials were based on the wide area network (WAN) used for cellular phones. That meant, however, that users had to pay cell phone charges to make a payment, and also had to punch in long sequences of digits each time. Other technologies tested enable less cumbersome procedures. Palm and Verifone will use infrared (IR) data transmission for their initial trials. Among the other technologies being used are Bluetooth, WiFi, and RFID, a short-range transmission system. Public key infrastructure (PKI) encryption - considered to be necessary for secure m-commerce in general - is currently being incorporated into digital wireless networks and into an increasing number of wireless devices, a trend that is likely to increase consumer confidence in m-payment's security.
M-payment is already being used in some parts of the world, including Europe and Asia. In North America, a series of trials are scheduled for late 2001. Commerce Systems, a company based in Kingston, New York, and Nokia jointly developed a cellular phone m-payment system that is being tested in a trial with two United States restaurant chains. One small complication hindering wide-spread acceptance of m-payment is the distinction that credit card companies make between transactions where the card is physically present at the point of sale and those where it is absent - for example, when you use your credit card for transactions over the telephone or your computer's Internet connection. For payments in what are considered "card not present" situations, credit card companies charge the merchant a higher transaction fee. Whether m-payment would qualify as a "card present" situation or not has not yet been determined; that decision may depend on the degree of confidence credit card companies have in the security of m-payment.
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