Mobile payment

What it means

A mobile payment is a payment made with a phone or watch through a digital wallet, payment app or QR code instead of a physical card or cash. The most common are payments through wallets such as Apple Pay and Google Pay, where the phone communicates contactlessly with the terminal.

Technically, a wallet payment is a card transaction. The phone stores not the real card number but a substitute token, as described under card tokenisation. If an attacker intercepted the token, they could not use it outside that device, which makes it more secure than a physical card.

Besides wallets there are QR code payments, where the customer scans a code and pays by transfer, often as an instant payment. In Slovakia, the Pay by square standard is widely used for transfers, embedding payment details in a QR code on the invoice.

How it works in practice

For the merchant, a digital wallet payment is an ordinary card transaction accepted by the same contactless card terminal. Nothing special needs to be set up and fees are the same as for cards, because it uses the same card acquiring and the same card schemes.

For in-store payments, a receipt from the eKasa cash register must be issued for mobile payments too. A phone payment is recorded as a non-cash card payment. In online shops, mobile wallets are offered as a fast checkout method that improves conversion on smartphones.

QR code payments and instant transfers can be cheaper for the merchant than cards because they bypass card fees. On the other hand, they lack the consumer protection of cards, and payments must be matched to orders, for example via a payment reference.

What to watch out for

Mobile payments depend on battery, signal and app. A merchant should not rely on a single payment method, and customers should have a fallback. It helps to have a procedure for accepting payment another way if the payment gateway or terminal goes down.

With QR payments, fraud involving tampered codes that redirect payment to another account does occur. Companies should generate QR codes on invoices from their own system rather than inserting them by hand, and remind customers to check the payee before confirming.