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M-payment is a real-time payment that is made with the use of a mobile device. Formally known as a mobile payment, the m-payment involves submitting an electronic remittance for an outstanding bill. Cell phones, smartphones, and personal digital assistants are all utilized as the means of making an m-payment.
The earliest generation of the m-payment was made possible by the creation of wide area networks that would make use of the Internet to connect the customer with the vendor. However, making m-payments in the early days was a rather cumbersome process. In order to make a payment, the customer normally had to pay a charge to the service provider before using handheld devices to submit the payment.
Along with the charge, it was often necessary to enter a long numerical code in order to complete the transaction. At this juncture, the process did not hold much in the way of convenience for the consumer, although the ability to make a payment by way of a cell phone or similar device was novel enough to gain attention.
Fortunately, the process for conducting mobile payments was improved with time. Enhancements to technology have streamlined the connection process. With more handheld devices carrying full Internet capability, the ability to submit real-time payments has become quicker as well as easier. Current services that assist with transactions using an m-payment format report that many transactions can be conducted from start to finish in less than fifteen seconds.
One continuing obstacle to widespread acceptance of m-payment technology has to do with the fee that is charged to the vendor when a customer uses a credit card to submit a payment. Credit card companies calculate the fee based on whether the transaction is classified as a “card present” situation, or a “card not present” situation. A card not present situation applies whenever the account is used over the Internet or a phone connection, and carries a higher fee. For some vendors, this factor makes acceptance of an m-payment cost prohibitive.