Mobile purchasing
Mobile Purchasing refers to payments made from mobile phones, through network operator, without involving credit or debit card transactions.
Processing of payments
The processing of payments in Mobile Purchasing is through traditional mobile payment techniques. The customer can buy products through WAP from a mobile website by clicking on a specific link, or may donate money by sending an SMS to a specified common short code. The payment is then made through the mobile network operator, who will add the payment made, along with a processing fee, to the buyer's phone bill.[1]
Advantages
Mobile purchasing extends purchasing opportunities to even those who do not have a credit or a debit card. Some customers may even prefer mobile purchasing over credit or debit card transactions, as it can be quicker and simpler compared to the latter.
Disadvantages
One of the main disadvantages of mobile purchases is their lower payout rates compared to credit card based payments, because of VAT and other taxes:
- Credit cards / PayPal: Between 80% and 90%
- Premium SMS: Between 45% and 60%
- Payforit: Between 45% and 89%
The main disadvantage for the consumer is that the payforit scheme is not secure. The payforit scheme is easily exploited by criminals (with the aid of the networks-who force third party/ direct to bill billing upon their customers) forcing their bogus services onto unsuspecting victims whilst victim is browsing legitimate sites on a mobile phone/device (using mobile data). It (the scam) works by spoofing (via a script coded into a popup) a forced acceptance of a non existent service subscription. Many shell companies have been set up specifically to conduct theft, to make it seem legitimate on the surface.
It is all made possible via the forced third party/ direct to bill billing, which is forced onto the consumer by the mobile networks.