ITEC0722: Mobile Business and
Implementation: Mobile Payment
and Security
Suronapee Phoomvuthisarn, Ph.D.
suronape@mut.ac.th
The Growth of Mobile Payment
http://www.paymentscardsandmobile.com/mobile-paymenttransactions-record-27-growth-worldwide-past-four-months/
Outline
• Introduction to Mobile Payment
– Definition of M-Payment
– Evolution of Payment
– Drivers
– Key Stakeholders
• Types of M-Payment
– Monetary Value
– Location
– Usage
• Security Challenges
Introduction to Mobile Payment
• Definition
– “Use of wireless devices (such as mobile phone) to
make a purchase or other payment related
transaction.”
• Mobile Payment (M-Payment) are an
important enabling service for other mcommerce services (e.g. mobile ticketing,
shopping, gambling…) :
Evolution of Payment
€1
in every
€6.75
Consumer spend
on Visa cards
50%
25%
Visa spend
of Visa
transactions
Ecommerce
+200% vs face-to-face
Mobile
by 2020
1
in every
6
Visa cards in Europe
contactless
Secure mobile payments getting the balance right, Royal
Holloway University of London,Richard Martin, Payment System
Security Visa Europe 7 September 2013
Example M-Mobile methods
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Voice and now also 3G Video calls (IVR)
SMS
MMS
Mobile TV
Mobile Internet
Near Field Communications
Peer-to-Peer
Drivers
• Population of mobiles devices over PC
• Mobile devices allowing low cost
and easy access payments (ideal POS)
• Mobile apps adding functionality
• Mobile operators are looking for new revenue
streams
Key Stakeholders
• Providers of mobile payment services
– Financial Institution (e.g. Bank)
• Internet Bank & ePayment Services
– Mobile Network Operator
• Network Infrastucture
• Subscribers
• Demand Sides
– User/Consumer
• User of the value added services
– Content Provider/Merchant
•
Getting Paid
•
Low Cost
Types of M-Payments
• Monetary Value
– Micro payments – less than 5$
– Medium Payments – Between 5$ - 25$
– Macro payments - above 25$
• Location
– Remote Transaction – SMS, GPRS, Applications, QR Code
– Proximity Transaction – Bluetooth, RFID, NFC
• Usage
– Mobile-to-mobile payments
– Mobile devices as credit card processors
– Mobile devices used as credit cards
Remote Transaction
• Web form
– Send money from a Visa card to any Visa card,
anywhere in the world, using mobile phone
number
• Transactional payments by SMS
– the consumer sends a payment request via an
SMS text message or a short code and a premium
charge is applied to their phone bill or their online
wallet.
– The merchant involved is informed of the payment
success and can then release the paid for goods
Online Wallet
• The consumer’s electronic wallet—the trusted
source of credentials
– Files or devices containing payment information,
possibly representations of money
– Used for seamless payments, without significant
user intervention
Online Wallet (2)
• First payment:
– User registers, inputs their phone number, and the
provider sends them an SMS with a PIN
– User enters the received PIN, authenticating the
number
– User inputs their credit card info or another
payment method if necessary (not necessary if the
account has already been added) and validates
payment
• Subsequent payments:
– The user re enters their PIN to authenticate and
validates payment
Proximity Payment
• Definition:
– The trading persons are in the same vicinity.
• Example
– Contactless payment
– Mobile phone used as PoS device
– Mobile money transfer
• Benefits & Challenges
– Offline transaction support
– Compatibility issues such as interfaces for Infra red
– Have some risks, ok for micro payments
Contactless Payment
• Contactless
– Use a mobile device to shop conveniently, quickly
and securely in a face-to-face environment
Mobile-to-Mobile Payments
• Merchant applications allowing instantaneous
transfer of funds from one account to another
via smartphone
• Examples:
– Paypal Bump
• Bump phones together to receive account info
• Or enter email address to download
appropriate account info
• 1.9% - 2.9% + $0.30 transaction fee
Mobile Payments powerpoint::Kristen Meyer, PharmD Candidate,
University of Charleston School of Pharmacy, PCCA CPMS Intern,
January 3, 2011 – February 3, 2011
Mobile Devices as Credit Card
Processors
• Square, Inc.
– Device acts a mini credit card reader inputting
pertinent transaction information into the phone
through Square App
– Cost: 2.75% + $0.15/card swiped; 3.5%
+$0.15/card keyed in
• Intuit
allaexpression.com
– Mobile credit card reader
– Cost
• Low Volume: $0/month, 2.7% + $0.15/swipe, 3.7%
+ $0.15/keyed in
• High Volume: $12.95/month, 1.7% + $0.30/swipe,
2.7% + $0.30/keyed in
http://www.multicellphone.com/category/mobil
e-payment/page/2/
Mobile Payments powerpoint::Kristen Meyer, PharmD Candidate,
University of Charleston School of Pharmacy, PCCA CPMS Intern,
January 3, 2011 – February 3, 2011
Mobile Devices as Credit Cards
• Near Field Communication (NFC) Technology
– Allows consumers to wave their mobile phone over a point of
sale terminal to purchase retail items
– Thought to threaten the existence of the wallet
• Companies set to launch pilot programs:
– PayPass/PayWave
– Google Wallet
– ISIS (partnership between AT&T, Verizon Wireless,
T-Mobile, Discover Financial Services and Barclays)
• Costs:
– Approximately $200/reader
– you can use Google as your new payment processor, with
transaction fees starting at 1.9 percent
Mobile Payments powerpoint::Kristen Meyer, PharmD Candidate,
University of Charleston School of Pharmacy, PCCA CPMS Intern,
January 3, 2011 – February 3, 2011
NFC Payments: Fast and Simple –
Touch to Pay
Mobile Payments powerpoint::Kristen Meyer, PharmD Candidate,
University of Charleston School of Pharmacy, PCCA CPMS Intern,
January 3, 2011 – February 3, 2011
Security Challenges
• Sharing sensitive financial information via mobile
devices.
• Application installation cannot be controlled.
– new attack for malware to steal customer data
• Compared to PC, smartphones were not originally
designed for data security.
Reference
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http://www.paymentscardsandmobile.com/mobile-payment-transactions-record-27growth-worldwide-past-four-months/
http://en.wikipedia.org/wiki/Mobile_payment
http://www.businessnewsdaily.com/4457-mobile-payment-solutions.html
Mobile Payments powerpoint::Kristen Meyer, PharmD Candidate, University of Charleston
School of Pharmacy, PCCA CPMS Intern, January 3, 2011 – February 3, 2011
Status of Mobile Payments, Eelco de Jong, 19 September 2007