How they work: "Mobile Phone or Cellular Electronic Payments"

In developed countries like Japan, they have had mobile phone capabilities that are so advanced so much that, you could virtually do nearly everything from the "comfort" of your home with the mobile phone.  

In developed countries like Japan, they have had mobile phone capabilities that are so advanced so much that, you could virtually do nearly everything from the "comfort" of your home with the mobile phone.  

You could be on your way home with a list of things to do, the mobile phone being the only accessory to help you out. You could take a "twegerane" home by simply using your cell phone to book a seat or even make payment by simply swiping your phone against the field communication (NFC) reader or to pay your fare.

The NFC is a reader similar to the bar code, except this is electronic, it reads directly from your phone.

You could pay for concert or movie by simply touching your phone to the NFC tag on the electronic advert board and this could download details about the concert or film show, including where and when it'll take place, you could get information relating to the URL for the Web site to visit to order for your electronic ticket (E-Ticket).

When you reach your stop, you could go to the bookstore, where you could similarly use your mobile phone to buy discounted tickets or even buy any other items.

You could even get services like the shoe shiners, cigarette sellers, and again, you touch the phone to the NDC reader to pay your bill. At the point of disembarkation, you could be hungry and you want to have a bite, still, you could go to one of your favourite restaurants for the treat, here too, you could simply pay via your mobile phone.

To make matters even better, you may send an SMS to order for the food via your phone, so the food is ready by the time you arrive. Another touch of the phone to a reader, and you're ready to head out satisfied.  The list is countless.  
In our scenario (in East Africa), you could easily send your relative some money via your mobile phone, with no worry of the money being stolen in transit nor you getting mugged by some overzealous characters  Most folks out there may be wondering as to how this money gets around or how the electronic payment with a cell phone works?

How available is this type of payment? And what are the security risks? Near field communication is at the heart of cellular electronic payment, so any explanation of cellular payment needs to start there.

What exactly is NFC? It's a short-range wireless communications technology standard that allows electronic devices to communicate with each other, for example, to make a cellular payment.

Using a short-range radio frequency, an NFC reader can read data from a tag or another device placed very close to it. This is more or less similar to the radio frequency identification (RFID) technology used in wireless inventory tags, contactless credit cards and transit cards that you can touch to a reader. NFC and RFID both transfer data via inductive coupling.

Induction occurs when a wire or other conductor of electricity passes through a magnetic field, generating an electric current in the wire or conductor. An NFC-equipped cell phone is fitted with a chip with a built-in coil of wire.

The payment station, or reader, generates a magnetic field and also has a coil of wire inside. When the phone is placed within a few inches of the payment station, an electric current jumps between the coils of wire, signalling data-carrying radio waves to pass between the devices.

But NFC connectivity can do more than RFID solutions, which is particularly useful for electronic payment. NFC offers two-way communications, so the payment station can send information like discount coupons or carry on a conversation with the chip in the phone.

That also offers added security. The pay station, for example, can request account information from the chip, which can ask for time for the user to enter a password on the keypad.

The devices can keep the connection open until account and security information is provided and the transaction approved.