Mobile Payment 2023

As a small business owner, you naturally strive to meet customers where they are, whether that’s stocking the right merchandise or offering convenient payment options. Mobile payments processing is fairly simple for a merchant, but it requires a bit of upfront effort. That includes investing in a point-of-sale system that can handle contactless payments and digital wallet transactions.


  • What is a mobile payment?
  • 5 types of mobile payments
  • Benefits of mobile payments

What is a mobile payment?

Mobile payment is the process of making payments for goods and services through a mobile device, such as a smartphone or tablet. This can include payments made in stores, online, or through peer-to-peer (P2P) transfers.

A person taps their smart watch on a mobile payment terminal
A mobile point of sale system is a great way to accept contactless payments.

These devices might run mobile wallet apps or peer-to-peer mobile payment apps. Or, they might enable transactions via SMS. Consumers can use mobile payment apps or use their credit card to check out on mobile ecommerce sites.

Popular mobile wallet apps include Apple Pay and Google Pay and accelerated checkout apps like Shop Pay. Popular peer-to-peer mobile payment apps include Venmo, PayPal, CashApp, and Zelle.

5 types of mobile payments

Mobile payments take five main forms. While each has its unique features, all achieve a near-instantaneous transfer of money from one account to another.

1. Mobile wallet

Mobile wallet services include apps like Google Pay, Apple Pay, and Samsung Pay. These services run on computers, smartphones, tablets, and smartwatches, and link to a customer’s credit card, debit card, or bank account.

Once a person sets up their mobile wallet account, they can use these devices much like they’d use a credit card. In a brick-and-mortar store, they can tap their device on a smartwatch or a tablet on a payment terminal equipped with an NFC (near-field communication) radio. Online, they can use their mobile wallet account on many merchants’ checkout pages by selecting a mobile wallet icon (such as Apple Pay) from among the checkout options.

Shopify’s own Shop Pay is an accelerated checkout that saves customer information for easier payments on both mobile and desktop. This works similarly to a mobile wallet in that it facilitates speedy mobile payments when customers shop online.

2. Mobile ecommerce

This category, also known as m-commerce, describes any type of transaction one makes on a mobile device. If a shopper makes a purchase on their mobile device’s browser or on a merchant’s proprietary app, that qualifies as a mobile ecommerce payment. Mobile payments on ecommerce stores can be completed using a credit card, a mobile wallet, or an accelerated checkout like Shop Pay.

A person sits at an outdoor table making an online purchase on a laptop
Customers can make online purchases with credit cards using mobile commerce.

3. Mobile peer-to-peer

This type of transaction, which runs on mobile payment apps like Zelle, PayPal, Venmo, and CashApp, allows individuals to transfer money to other individuals via a mobile app or a webpage. Some of these services—most notably PayPal—enjoy wide acceptance from small business retailers. This means you can pay a business owner using PayPal instead of using a credit card.

4. SMS payments

SMS payments let people make payments by sending an SMS to a specific phone number. Americans, who largely own smartphones, rarely make SMS payments. In parts of the developing world, however, SMS payments are prevalent and widely trusted.

5. Mobile payments at a point of sale

In a mobile point-of-sale (mPOS) scenario, a customer uses their credit card or mobile device to tap and pay on a mobile payment terminal, usually connected to a mobile device like a tablet. Customers can also insert a credit card into the chip reader or swipe on the mobile POS for a NFC transaction. At this point, your point-of-sale software takes over, transmitting mobile payment data to financial institutions and transferring money to your account.

A person taps a payment card on a mobile POS terminal by Shopify
Customers can tap a credit card to make a mobile payment on retail purchases using Shopify’s POS Go.

Shopify offers a mobile POS called POS Go that allows you to break free from the checkout counter and close sales on the floor—or curbside. To use Shopify for mobile payments, you’ll need to activate Shopify Payments on your store, and have the Point of Sale channel installed.

💡 Learn more about POS systems for mobile payments:

  • What POS hardware do stores need?
  • How to choose the best POS system
  • What is a mobile POS system?
  • Why do small businesses need a POS system?
  • Learn how Shopify POS can help your business accept mobile payments

Benefits of mobile payments

Whether you’re accepting mobile payments online, contactless payments at a point of sale, or using Apple Pay and Google Pay payment apps, there are several advantages for both you and your customers. The benefits of accepting mobile payment methods include:

Convenience for the customer

Mobile payments eliminate a barrier to finalizing a customer’s purchases. Customers can pay conveniently by tapping a phone or credit card at a point of sale, or they can make online transactions using their credit card or other payment apps like Google Pay, Shop Pay, or Apple Pay.

A secure payment type

Mobile payments are among the most secure forms of commerce. That’s because they’re performed on mobile devices that tend to require some form of authentication, typically in the form of a fingerprint, facial recognition, or a passcode. The devices also encrypt their transmissions, giving thieves a very minimal chance of intercepting customer data.

A demo of Shop Pay's security features
Shop Pay includes free fraud protection on eligible orders with Shopify Protect.

Speed of transaction

Financial institutions process mobile payments in the blink of an eye. This makes mobile checkout as fast as a credit card transaction—if not faster. When you accept mobile payments, you remove friction and barriers for your customers.

Popularity among consumers

More customers are spending more money using mobile payments. By 2027, it’s expected that global consumers will spend $6,007 billion per year using mobile payments. Financial analysts expect this figure to more than triple within the next five years.

Accept mobile payments for your business

A person taps their mobile phone as payment at a POS terminal
Apple Pay is an example of a mobile wallet app that allows users to make a mobile payment at a brick-and-mortar store.

As more and more shopping shifts to mobile platforms, payment systems will make a similar shift. Customers, always in search of convenience and flexibility, are increasingly embracing mobile payments—particularly given the level of security they provide.

Merchants will benefit, too. Some mobile payment apps like Venmo and Square charge fees to merchants that are very similar to credit card fees. Other apps, like Apple Pay, don’t charge merchants at all. This lets business owners benefit from the convenience and security of mobile payments without taking a larger than usual financial hit. Small business owners that enable their company to accept mobile payment methods will likely reap the benefits that come along with them.

Mobile payment FAQ

What is mobile payment and how does it work?

A mobile payment is a contactless way of paying that involves a mobile device such as a mobile phone, a smartwatch, or a tablet. Mobile payments are typically completed using a digital wallet or mobile app, and can be linked to bank accounts, credit cards, debit cards, and other payment methods. The payment process typically involves scanning a QR code or tapping a mobile device on an NFC reader to securely initiate the payment.

What are the three types of mobile payments?

The three types of mobile payments are:

  • NFC (near-field communication) payments: These payments are made by tapping a credit card or mobile device at a point-of-sale (POS) terminal. Examples include Apple Pay, Google Pay, and Samsung Pay.
  • Direct carrier billing: This method of payment allows customers to charge their purchases to their mobile phone bill.
  • Mobile wallets: These are digital wallets that store payment information and can be used to make payments in participating stores via an app or website. Examples include PayPal, Venmo, and Cash App.

How do you use mobile payments?

Mobile payments can be used to purchase goods and services in person or online. In-person, a customer can pay with a mobile wallet app or mobile payment service on their smartphone by scanning a QR code or tapping their phone against an NFC-enabled smartwatch or a tablet on a payment terminal. Online payments can be made by entering your payment information into a website or app. You can also use mobile payments to send money to friends and family or to pay bills.

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