Mobile Payments Framework


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A generic framework to understand and address the needs and requirements of the mobile payments process

Published in: Economy & Finance, Business

Mobile Payments Framework

  1. 1. Mobile Payments Framework Review Lakshmana Kattula Enterprise/Solution Architect June 2011
  2. 2. Mobile Payments Framework Stakeholders Requirements Payment Solutions Technologies Basis of Payment SMS Simplicity & Usability Consumers Bank Account USSD Universality Credit Card Merchants WAP Interoperability Mobile Bill Phone based apps Financial Services Security Remote SIM based apps CostMobile Network Operator Direct to Mobile Bill NFC Speed Technology Vendors PR SMS Cross border Dual Chip SMS based appsPayment Service Provider Mobile Wallet Use Cases Peer to Peer PKISecurity & Authentication Mobile Banking WAP or Mobile Web Provider Smartphone apps Retail Handset Manufacturer Evolution & Roadmap Restaurant Proximity Paper Regulatory Bodies Contactless Electronic Ticketing Digital Goods In Store Mobile
  3. 3. Key Terms• Mobile Payment - where a mobile phone is used to initiate, authorize and confirm an exchange of financial value in return for goods and services• Mobile Payment Provider - a logical entity which facilitates financial transactions between mobile phone customers. Ex: mCheck, ngpay, Obopay, PayMate
  4. 4. Market Context Legal, Regulatory andSocial & Cultural Standardization Environment Environment mPayment Service Providers New ePayment Mobile Traditional Payment Services Payment Services Services Consumer Power Merchant Power Technological Commerce Environment Environment
  5. 5. Stakeholders – Consumers• Personalized service• Minimal learning curve• Trust, privacy and security• Ubiquitous – anywhere, anytime and any currency• Low or zero cost of usage• Interoperability between different network operators, banks and devices• Anonymity of payments like cash• Person to person transfers
  6. 6. Stakeholders – Merchants• Faster transaction time• Low or zero cost in using the system• Integration with existing payment systems• High security• Being able to customize the service• Real time status of the mobile payment service
  7. 7. Stakeholders – Financial Services• Network operator independent solutions• Payment applications designed by the bank• Exceptional branding opportunities for banks• Better volumes in banking – more card payments and less cash transactions• Customer loyalty
  8. 8. Stakeholders – Telcos• Generating new income by increase in traffic• Increased Average Revenue Per User (ARPU) and reduced churn (increased loyalty)• Become an attractive partner to content providers
  9. 9. Stakeholders – Regulatory Bodies/Government• Revenue through taxation of m-payments• Standards
  10. 10. Stakeholders – Technology Vendors (Mobile Devices)• Large market adoption with embedded mobile payment application• Low time to market• Increase in Average Revenue Per User (ARPU)
  11. 11. Requirements1. Simplicity and Usability (No learning)2. Universality (C2C, B2C, B2B, Micro, Macro)3. Interoperability (standards and open)4. Security, Privacy and Trust (hacking, etc)5. Cost (existing systems)6. Speed (customers and merchants)7. Cross border payments (global)
  12. 12. Payment Solutions – Basis of PaymentOn the basis of payment (Lim, 2007)1. Bank account based (bank account linked to mobile number)2. Credit card based (credit card linked to the mobile number)3. Telecommunication company billing based (prepaid airtime, debit and postpaid subscription, credit)
  13. 13. Payment Solutions – Remote or Proximity
  14. 14. Technologies for Mobile PaymentsGSM mobile phone may send or receive information (mobile data service) through three possible channels – SMS, USSD or WAP/GPRS. The choice of the channel influences the way m-payment Solutions are implemented.1. SMS (store and forward, asynchronous)2. USSD (session based, transactional)3. WAP (GPRS packet switched data, MMS, email, web, etc)Secondly, the m-payment client application may reside on the phone or else it may reside in the subscriber identity module (SIM)1. Phone based apps (J2ME, etc)2. SIM based app (more secure!)3. NFC (phones enabled with NFC)4. Dual Chip (telephony SIM and payments chip card, preferred by banks)5. Mobile Wallet (several customer accounts or credit cards stored)
  15. 15. Evolution & Roadmap• Paper• Electronic• Mobile
  16. 16. Use Cases – A Generic Interaction Model Merchant M-Payment Application Service ProviderMobile Phone Banks Smartphone Mobile Mobile Wallet App Network Mobile Number (SMS, USSD, WAP) Account/Card details SIM Mobile (Customer, Wallet App Merchant) Certifying Authority Certificates
  17. 17. References• gory/mobile-marketing/mobile-payments/•• Mobile Payments payments-8127038