5.4 Developments related to mobile payments

In past years, due to the rapid technical progress observed in the area of mobile phones and other portable communication devices, the options to use mobile devices have increased significantly which may incentivise the development of

electronic payment services. According to the 2012 survey of the MNB, 89 per cent of those aged between 15-69 years have mobile phones which significantly exceeds the ratio of those holding payment accounts or payment cards. Additionally, based on the statistical data published by the National Media and Infocommunications Authority, the number of mobile internet subscriptions approached 3.2 million at the end of 2012. All solutions where the payment order is given through a mobile device can be listed under mobile payment services except for the cases when Internet banking services are used on the device through a browser.49 Currently, several development paths can be seen for mobile payment solutions all over the world, a significant number of market participants are experimenting with various technical solutions and business models but so far only a few services managed to reach a larger number of customers. Mobile payment solutions can be grouped based on several aspects. In the case of payment situations, there are examples for proximity and remote payments. Mobile payment services cannot be considered as independent, new payment methods because typically, the services that enable the initiation of orders through a mobile device are based on an already operating payment method. Basically, there are three development paths in this area solutions based on payment card systems, credit transfer-based services and solutions based on mobile purchases. While in the case of the first two, the transaction is debited to the payer’s payment account held at the payment service provider, in the case of a mobile purchase, the customer initiates the payment to the debit of the mobile phone account held at the mobile service provider. The replacement of the traditional financial intermediary system may be a goal for mobile payment developments, primarily in developing countries, along with the provision of supplementary services, mainly in countries with a more developed financial culture, and financial inclusion. Mobile devices can also gain space in the area of the acceptance of electronic payment transactions either by replacing traditional POS terminals in the case of payment card transactions, or in the case of other payment methods, by conveying the confirmation of the execution of the transaction to the beneficiary.

The newly appearing mobile payment services can only support the improvement of the efficiency of local payment

system if they become widely available and usable. To this end, it is useful to establish mobile payment services using the already existing and operating payment infrastructure, as a supplement thereto. The necessary additional infrastructural elements have to be established in a way where the costs of their installation and operation are low and access is available for all affected participants. As part of the developments, the situation should be avoided in which some of the solutions and their participants compete with each other in the area of access to infrastructure by creating either technical or regulatory elements that limit access. Owing to the mobile devices, the costs of the construction and operation of the infrastructure necessary for the execution of electronic payments may become lower. With these devices, extra services and information can be provided for the customers with which the financial awareness of those using the services and trust in the electronic payment instruments can be increased. The spread and usability of the services may support financial inclusion. However, the safe execution of the payment transactions and the appropriate management of the customers’ personal data always have to be borne in mind.

In order to spread mobile payment developments in hungary on a wide scale, market participants should cooperate intensively and extensively. Recently, several mobile payment developments have been realised in Hungary and some of these operate with the usage of payment card systems, where access and the possibility of the wide-ranging use of the system are enabled by a payment card-based identification. In addition, several credit transfer-based services appeared on the market which typically enable the identification of the payees based on mobile phone numbers. In such cases, however, the spread of these services may be slowed down by the fact that by using the phone numbers, the simple and quick execution of the transactions is only possible between the customers of the operator bank. When the payee of the credit transfer is the customer of another payment service provider, further

49 In such a case, by using mobile devices, users give a payment (e.g. credit transfer) order or enquire account information through Internet banking services.

identification may be necessary. In the case of credit transferbased mobile payment services, the establishment of wideranging usability may be promoted by the central recording of the mobile phone numbers where registered customers may connect their phone numbers with their payment accounts and they can accept credit transfers by giving their phone numbers. The central records can be kept even by the GIRO which operates the ICS.