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Mobile Payment Gateway

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Introduction• Mobile Payments is a new and alternate mode of

payment using mobile phones

• Instead of using traditional methods like cash, cheque, or credit cards, a customer can use a mobile phone to transfer money or to pay for goods and services.

• In India, this service is Bank-led. Customers wishing to avail themselves of this service will have to register with Banks which provide this service.

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Types of Mobile Payment

Premium SMS based transactional payments

Direct Mobile Billing

Mobile web payments (WAP)

Contactless NFC(Near Field Communication)

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• The consumer sends a payment request via an SMS text message and a premium charge is applied to their phone bill.

• The merchant involved is informed of the payment success and can then release Items.

• Since a trusted delivery address has typically not been given these goods are most frequently digital with the merchant replying using a Multimedia Messaging Service to deliver the purchased music, ringtones, wallpapers etc.

• Poor reliability• Slow speed • Security

Premium SMS based transactional payment

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Premium SMS based transactional payments(Cont.)• High cost• Low follow-on sales• Some Mobile Payment services accept Premium SMS

payments. Here is the typical end user payment process:▫ User send SMS with Keyword and unique number to a

Premium Short Code.▫ User receive a PIN (User billed via the short code on

receipt of the PIN)▫ Finally user enters PIN to get access to content or

services.

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Direct Mobile Billing• The consumer uses the mobile billing option during

checkout at an e-commerce site—such as an online gaming site—to make a payment.

• After two-factor authentication involving a PIN and One-Time-Password, the consumer's mobile account is charged for the purchase.

• It is a true alternative payment method that does not require the use of credit/debit cards or pre-registration at an online payment solution such as PayPal, thus bypassing banks and credit card companies altogether.

• This type of mobile payment method, which is extremely prevalent and popular in Asia

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• Benefits▫ Security - Two-factor authentication and a risk

management engine prevents fraud.▫ Convenience - No pre-registration and no new mobile

software is required.▫ Easy - It's just another option during the checkout

process.▫ Fast - Most transactions are completed in less than 10

seconds.▫ Proven - 70% of all digital content purchased online in

some parts of Asia uses the Direct Mobile Billing method

Direct Mobile Billing

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Mobile web payments (WAP)• The consumer uses web pages displayed or additional

applications downloaded and installed on the mobile phone to make a payment.

• It uses WAP (Wireless Application Protocol) as underlying technology and thus inherits all the advantages and disadvantages of WAP.

• Follow-on sales where the mobile web payment can lead back to a store or to other goods the consumer may like. These pages have a URL and can be bookmarked making it easy to re-visit or share with friends.

• High customer satisfaction from quick and predictable payments

• Ease of use from a familiar set of online payment pages

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Mobile web payments (WAP)• Name of Mobile Web Payment Gateway

▫ PayPal▫ NgPay▫ Dwolla▫ Venmo▫ Square▫ TabbedOut▫ ZMAZZ▫ Bitcoin for Android

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Contactless Near Field Communication

• Near Field Communication (NFC) is used mostly in paying for purchases made in physical stores or transportation services.

• A consumer using a special mobile phone equipped with a smartcard waves his/her phone near a reader module.

• Most transactions do not require authentication, but some require authentication using PIN, before transaction is completed and The payment could be deducted from pre-paid account or charged to mobile or bank account directly.

• NFC is a set of short-range wireless technologies, typically requiring a distance of 4 cm or less.

• NFC always involves an initiator and a target; the initiator actively generates an RF field that can power a passive target. This enables NFC targets to take very simple form factors such as tags, stickers, key fobs, or cards that do not require batteries. 9/19/2011Group1

Contactless Near Field Communication(Cont.)

• NFC peer-to-peer communication is of course possible, where both devices are powered.• NFC tags contain data and are typically read-only but may be

rewriteable.• The tags can securely store personal data such as debit and credit

card information, loyalty program data, PINs and networking contacts, among other information.

• Tags currently offer between 96 and 512 bytes of memory.• There are two modes:

▫ Passive communication mode: The initiator device provides a carrier fields and the target device answers by modulating the existing field. In this mode, the target device may draw its operating power from the initiator-provided electromagnetic field, thus making the target device a transponder.

▫ Active communication mode: Both initiator and target device communicate by alternately generating their own fields. A device deactivates its RF field while it is waiting for data. In this mode, both devices typically have power supplies.

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Contactless Near Field Communication(Cont.)

• History of NFC▫ 1983 - The first patent to be associated with the

abbreviation Radio-frequency identification(RFID) was granted to Charles Walton.

▫ 2004 - Nokia, Philips and Sony established the Near Field Communication (NFC) Forum.

▫ 2006 - Initial specifications for NFC Tags.▫ 2006 - Nokia 6131 was the first NFC phone.▫ 2010 - Samsung Nexus S: First Android NFC phone

shown.▫ 2011 - NFC support becomes part of the Symbian

mobile operating system with the release of Symbian Anna version.

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Contactless Near Field Communication(Cont.)

• Future Aspects▫ On January 25, 2011, Bloomberg published a report

stating that Apple was actively pursuing development of a mobile payment system employing NFC. New generations of iPhone, iPod and iPad products would reportedly be equipped with NFC capability which would enable small-scale monetary transactions.[

▫ On May 2, 2011, RIM announced ,the Blackberry Bold 9900, a new device that will use NFC technology.

▫ In May 2011, Google announced Google Wallet, an Android application that will make use of NFC to make payments at stores. The card information will be stored in the app and will be used to make the transactions.

• Security Aspects▫ Eavesdropping▫ Data modification▫ Lost property▫ Walk-off

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Questions…Thank You!!!

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