Mobile Banking and Mobile Payment System - An Overview

Abstract

ABSTRACT

Payments have been growing for hundreds of years and people have established advanced and more efficient means to make payment. Financial transactions that are based on wireless handsets may soon prove to be as pervasive as Internet-based financial applications. This progress has brought about a major shift in the current mix of consumer payments. Growth in this channel has been aided by technology, reliable infrastructure, applications, enhanced customer experience and traditional payment methods as well as new alternatives such as PayPal. The term "Mobile Finance" encompasses a wide array of services and products of interest to financial services institutions: Mobile Banking, Mobile Payments/Fund Transfers and Mobile Commerce. The common element is that the customer to initiate a financial transaction uses a handheld wireless device. Therefore the use of the mobile phone is the next significant step in the evolution in the payments industry. However the future diffusion of mobile banking depends on the organizing of markets and the interplay with regulations. Thus mobile banking requires transparent and clear regulations, as the contracting parties do not necessarily know each other. The legal regulations imposed by the lawmaker, thus, intend to safeguard and balance both consumer- and business interests by setting rules and regulating the market as well as the usage of existing and emerging technologies. Therefore this paper we examine of the current success in mobile banking and the legal and regulatory challenges that need to be met before financial institutions can safely deploy mobile transactions on a wide scale to the interested customers.