Great opportunity exist for businesses to develop their capability in this industry. Mobile payments are growing in alignment with the mobile growth.

1. World of Mobile Payments – An
Overview
Author:
Muthu Siva
FCMI(UK), FBCS(UK), FIC(UK)
MBA, ME
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2. Definition
Payment for products or services between two parties for which a mobile device, such as a mobile phone,
plays a key role in the realization of the payment under financial regulations
Instead of paying with cash, cheque, or credit cards, a consumer can use a mobile phone to pay for a wide range of
services and digital or hard goods. Although the concept of using non-coin-based currency systems has a long history,
it is only recently that the technology to support such systems has become widely available.
Mobile payments center on transactions between consumers and merchants that involve direct purchase of goods
and services that can be both account-based and point-of-sale (POS).
2
Adoption
• Mobile phones are also providing an unprecedented opportunity for
expansion of financial activity in developing countries where the number
of phone users can exceed the number of those having bank accounts
• The combined market for all types of mobile payments was projected to
reach more than $700B globally by 2017
• The use of mobile payments in developing countries has attracted public
and private funding by organizations such as the Bill and Melinda Gates
Foundation, USAID and MercyCorps
Mobile payments can be categorized based on technology as
1. Proximity
2. Remote
Categorization

3. Proximity Payment
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4. Remote Payment
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Payment approach:
• Credit/debit card-based payment by entering user information via a secure Wireless Application Protocol (WAP)
Interface
• eWallet/stored-value account-based payment via a secure WAP interface. In this case, user card and bank
account information are stored securely on the user’s mobile device. PIN-based authentication is used in
conjunction with transport over interactive voice response (IVR), WAP, SMS and USSD channels
Secure activation of the customer by the service provider and trusted enabling of the link between the MSIDN and
the card number are essential

5. Transaction Models
At present, stakeholders have not clearly separated roles within the mobile payment ecosystem.
Financial institutions and mobile network operators (MNOs) are competing for the entity that will hold
the customer account and receive the biggest portion of fees. This unclear environment has created
another kind of categorization based on the entity that holds the account of the customer
• Bank-centric
• Nonbank-centric.
Bank-centric Model - the account of the customer is held by a bank. Issues involving matters such as liability,
antimony laundering, transaction monitoring for fraud detection and compliance fall under the appropriate local,
national and international banking laws and regulations. When a payment is initiated, the consumer’s bank must
authorize the transaction. The payment networks used are the traditional ones such as Visa and MasterCard and the
major differences are at the endpoints of the transaction.
Nonbank-centric model - the account of the customer is held at nonfinancial organizations such as an MNO or
a third-party payment service such as PayPal. In such a case, important regulatory, security and even profit sharing
questions arise.
Especially in the European Union (EU), the easing of restrictions on payment operators are leading to changes in the
mobile payment landscape across Europe. Specifically, new players (mobile operators, department stores, etc.) will
be allowed to be recognized as Payment Service Providers (PSPs) without having the status of a traditional credit
institution and to operate in direct competition with traditional financial/credit institutions, provided they comply
with the requirements set out in the directive. They can act as an Electronic Money Issuer (EMI) or PSP. They will be
able to offer services such as cash deposits and withdrawals, direct debits, credit transfers, etc.
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6. Service Providers
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Worldwide there have been a number of deployments of mobile payments across the spectrum of proximity and
remote payment and for both bank-centric and nonbank-centric transaction models

7. Benefits & Security
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• Speed and convenience for the customer
• The capability to send money abroad via person-to-person (P2P) mobile payment services
• Cost-effective coverage is available in rural areas where no financial institutions exist
• The mobile wallet can consolidate many cards
• Improved authentication via PIN-based service
• The SMS/USSD encryption ends in the radio interface
• Multi-factor authentication (PIN authentication & digital signature by trusted third party)
• DRM (Digital Rights Management) incorporated in smartphone TPM (Trusted Platform Module) design,
cryptographically supported DRM
User Experience
• Poor reliability - transactional premium SMS payments can easily fail as messages get lost
• Slow speed - sending messages can be slow and it can take hours for a merchant to get receipt of payment.
Consumers do not want to be kept waiting more than a few seconds
• Low Pay-out rates
• Security and privacy as well as convenience are key drivers from a consumer perspective
Conclusion/Future
The mobile payments market is one that is undergoing transformation and holds a future that is promising for both
consumers and providers alike in a world that is witnessing a rise in mobile services based on smartphone
technology.
Some key points of particular interest to security based on the current state and anticipated future for mobile
payments, that can be noted are
• Collaborative and competitive models for mobile payment services are being created
• Strong assurance from independent trusted third parties as well as the development of, and adherence to, best
business practices within the mobile payments ecosystem will be required to encourage widespread consumer
adoption

8. 8
Top Mobile Payment providers

9. Google Wallet
Link https://www.google.com/wallet/#
About Google Wallet makes it easy to pay - in stores, online or to anyone in the
US with a Gmail address. It works with any debit or credit card, on every
mobile carrier.
Products Google Wallet
How does it work
Just Tap and Pay with your Android phone everywhere
you see the symbol at participating stores and click Buy with Google from
your favorite apps, mobile sites, Google Play, YouTube, and more.
Send or request money in Gmail, as easily as sending a picture. Just click
the $ sign in your attachments bar
Swipe your card at millions of MasterCard locations, or use it to withdraw
cash from ATMs You can also transfer the money to your bank account, or
use it to send money online to someone else

10. Fees Account Opening: FREE
• Sending or Receiving Money from Google Wallet is FREE
• Sending Money using a Debit/Credit Card funding instrument: 2.9%
per transaction (minimum $0.30)
• Adding Money to Wallet Balance from Debit/Credit Card: 2.9% per
transaction (minimum $0.30)
• ATM & Cash withdrawals: Google does not charge. However, ATMs
may charge a fee for each cash withdrawal
• Cash back at POS (i.e. at a grocery store check out ): FREE
• Tap and pay purchase: FREE
User Experience Customers are happy for it’s
1. Instant payment
2. PIN protected
3. Lets you pay using any existing major credit card for you
What is lacking 1. Only available on select Android phones
2. In-store purchases only work at locations with PayPass
3. Website information confuses more than clarifies how to get and use
the app
Help & Support https://support.google.com/wallet/
Google Wallet

11. DWOLLA
Link https://www.dwolla.com/
About Dwolla is a payment network that allows any business or person to send,
request and accept money. It has it’s own network that securely connects
to your bank account and allows you to move money
Products Built Dwolla OAuth + RESTful API for various Marketplaces, eCommerce,
Gaming , Retail, Charity, Point of Sale customers.
Customer Examples:
How does it work Send money to email addresses, phone numbers, LinkedIn connections,
Twitter followers, and businesses that accept Dwolla
By default, the receiver pays the $0.25, but the sender can choose to pay
the fee instead
You can send money to someone even if they don’t have a Dwolla
account. But, they will need to create one to claim the funds. Businesses
need to set up a Dwolla account to accept Dwolla

12. Fees Account Opening: FREE
Transfer/Receive funds: $0.25 transaction fee if transaction amount is >
$10. Free if transaction amount is <=$10
Note: By default, the receiver pays the fee if applicable, but the sender
can choose to pay the fee instead
User Experience Customers are happy for it’s
1. Instant transaction
2. Lowest transaction fee
3. Deposit and send cash instantly
4. Free online and mobile tools
5. Send money to friends on social networks
6. Shop easily, and safely online
7. It provides email support and help articles published on its website.
Social forum appreciate the support for quick response
What is lacking 1. Markets about it service only through it’s website
2. Even though it offers email support, it would be great if they can start
Live Customer support
3. User experience on Mobile app needs improvement
4. Drawback of the service is that both the merchant and customer
need to have Dwolla accounts, it trails well behind it's competitors in
terms of registered users
Help & Support http://help.dwolla.com/
DWOLLA

13. Paypal
Link https://www.paypal.com
About Paypal allow payments and money transfers to be made through the
Internet. Online money transfers serve as electronic alternatives to paying
with traditional paper methods
Products Paypal
How does it work
Paypal is available online or at Apple App Store or Google Play Store
Paypal also introduced its "One Touch" service which allows users to pay
with a one-touch option on participating merchants websites or apps
Paypal to Paypal transfer is instant and for other money transfer features
it will take three to four business days to copmlete
There is a transfer limit of $2000 per month

14. Fees Account Opening: FREE
Currency conversion fees may apply for overseas payments.
There’s no monthly or cancellation fee when you sell.
There is a fee after you make a sale and fee vary from country to country
Selling is 4.4% + $0.30 USD per sale, or lower
User Experience Customers are happy for it’s
1. Security with best anti-fraud detection and prevention
2. PIN protected
3. Lets you pay using any existing major credit cards
What is lacking 1. Money transfer is not instant if it not between Paypal account
2. Poor Customer Service
Help & Support https://www.paypal.com/webapps/helpcenter/helphub/home/
Paypal

15. ENTROPAY BUSINESS
Link https://business.entropay.com
About EntroPay for Business is an innovative payment solution that allows you to
manage all of your company’s spending, while retaining full control in a
simple, quick and cost effective manner.
Products EntroPay for Business provides two essential products – EntroPay Payout
and EntroPay Purchasing
How does it work Every EntroPay for Business account has an Account Balance, which is
used to fund all of the financial activities you perform on your account
such as sending a payment overseas. In order to make use of this service,
you must first top-up your Account Balance, which may be performed via
Bank Transfer for via Credit/Debit card
How to receive funds Your clients will be able to claim their payout funds through an e-mail sent
out by EntroPay once the payment is issued. They will then be able to
deposit the funds into an EntroPay virtual prepaid Visa debit card, which
can be used anywhere Visa is accepted online

16. ENTROPAY BUSINESS
Fees Account Opening: FREE
Account Top-up (Credit Card - Instant): 2.5% of transaction amount
(Bank Account) : 1.5% of transaction amount
Transfer funds: $0.50/£0.25/€0.40 per transaction
Receive funds: FREE
User Experience 1. Allows funds transfer through virtual visa card to anyone across globe
with an email address which is simple and instant
2. No minimum amount restrictions to retrieve funds
3. Delay in refund process
4. Complicated account upgradation process
5. Fraudent transaction complaints over social media
6. Poor Customer service
What is lacking 1. No Mobile App
2. Does not have comprehensive help/support information on their
website
3. Opportunity to increase countries where the service can be made
available. Currently available in 90 countries
Help & Support https://business.entropay.com/purchasing/support/

17. Square Cash
Link https://square.com/cash
About Square Cash is the easiest way to send money electronically. Cash is fast,
free, and deposits directly to your debit card
Products Square Register – Point of Sale (available in US, Canada and Japan)
Square Appointments (not available outside US)
How does it work Download app from Apple App Store or Google Play and create an
account with email address and start sending Cash from the app with SMS
or from any email provider
Cancel or Refund cash payments: Using ‘Request feature’ the user can ask
to send the funds back if it’s already redeemed by the recipient or you can
Cancel if it’s not already redeemed
To issue a refund, simply send the amount you wish to refund back to the
original sender
After linking your debit card, funds are directly deposited into your bank
account within 1-2 business days. Square does not hold funds in a
secondary account

18. Fees App download: FREE
Send, Request, and Receive Cash: FREE
You get a high transfer limit of up to $250 a week. However, if you link up
your Square Cash account to your Facebook page, you can increase that
weekly allowance to $2,500
User Experience Customers are happy for it’s
1. Square Cash doesn’t work with a middle man, so sending cash is
much more direct than any other service that’s come before
2. Square Cash is free and there are no fees attached to downloading
the app
3. Supports 130 different currencies
4. Connect a cash drawer, receipt printer, or bar code scanner
What is lacking 1. Online reviewers have noted one major concern regarding Square
Cash’s potential lack of security features
2. There is no two-step authentication
3. Available only in US
Help & Support https://squareup.com/help/us/en/topic/139-square-cash
Square Cash