A brief introduction to the next generation of Mobile Banking Technologies that will lead the way in electronic payments and processing through out the mobile industry.

1. Mobile Payment Services
June 2009
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2. Mobile payment p
p y prerequisite
q
Amid the excitement and hype surrounding the emergence of
yp g g
mobile Payments, to achieve critical mass, launching a mobile
payment service in countries with
pre dominant prepaid customers would reduce issues of
customer acceptance and experience.
p p
A large population base, geographically dispersed and lack of
infrastructure would make mobile payment services appealing
as it will lower transaction cost.
A consumer bbase with multiple bank accounts and th
ith lti l b k t d the
inconvenience of visiting a bank branch and paying bills.
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3. 3 main issues with mobile payments
p y
1. Who owns the customer? Telco or Bank?
2. Can it work on all handsets?
3. Is SMS secured?
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4. 3 major reasons why mobile payment is not working
j y p y g
1. Who owns the customer? Is it the Bank or the Telco?
• The potentially lucrative business of mobile payments is waiting for
banks and telecom operators to agree on each one's role and possible
revenue flow in the future. Technology for paying with mobile phones by
just flashing them near reading equipment in stores or in public transport
is ready, and consumers have appreciated the ease of its use in trials
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around the world. .
• The never ending struggle to determine who owns the consumers
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wallet will go on till one party ends being a service provider (a utility
provider per se) and another party being the custodian of the
consumers wallet in which the natural choice is the bank.
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5. 3 major reasons why mobile payment is not working
j y p y g
2. Is there a ubiquitous payment solution for existing as well
as future handsets? The ideal situation for all financial
institutions is to have a mobile banking / payment services that
can cover all handsets, includes roaming and at the lowest
possible cost. S
ibl t Several attempts h
l tt t have b
been made t t and
d to try d
provide such a solution;
• WAP or 3G mobile payment services which unfortunately are handset
dependent. Data charges are also very expensive.
• J2ME applications that can be uploaded into the handset. Unfortunately
this brings the issue of software maintenance and updates. What about
future handsets?
• A SIM card with digital identity for secure payment services. An
services
innovative idea however consumers might be reluctant to change their
SIM as it entails transferring across vital contact and data.
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6. 3 major reasons why mobile payment is not working
j y p y g
3.
3 Is current SMS banking secured? The current answer is NO!
• Telco’s can view both MO and MT. Current solution offering does not
p
provide end to end security for all SMS. It is also not to the telco’s benefit
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to invest significantly into end to end security for SMS as there is no
business model to justify this investment.
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7. Introducing Simprox’s“mPOD”
g p
mPOD is a simcard-based service that provides easy migration
for both retail and corporate accounts to a mobile payment
channel. It does not require any registration with the telco’s and
enables b k t own each i di id l simcard h
bl banks to h individual i d hence
controlling the wallet.
Convenient Easy Adoption
Send and receive payments No change of handset, sim
anytime you want by using or even network. No 3G or
your mobile phone WAP connection needed
anywhere, anytime
Secured
S d Cheap to deploy
Payment messages are
No infrastructure or
encrypted and money
application cost to the bank
deposited directly into
or consumer
issuing bank account
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8. mPOD embedded chip security
p y
Confidentiality P i
C fid ti lit / Privacy
• 2 level encryption for OTA transmission providing end to end
data encryption security.
y y
Identification & Authentication
• mPOD DNA algorithm provides a private digital signature unique
to each individual
• Enable multifactor authentication option for bank and end-user’s,
ensuring high level of authentication assurance
Encryption
E ti
• Encryption capability non reliant on mobile processor
• Scalable to WAP,3G,USSD and NFC
• Messages are encrypted with TDES 192-bit encryption
• Unique encryption key for every embedded chipset
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9. Market comparison
p
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10. Simprox payment system architecture
“CAN USE GSM NETWORK ONLY OR BOTH GSM & IP”
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11. Potential top 5 mobile payment services
p p y
Mobile Banking
Remittance Prepaid
Top-
Top-up
m-Commerce Bill
Payment
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12. Target market segment
g g
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13. Deployment overview
p y
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14. Summary
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No cost to the bank
• mPOD sim can be issued free based on agreed business model
• No application, deployment or customization cost
• Revenue share model hence no risk to bank bottom line
• Increase mPOD issuance = increase floats and cheap source of funds
Reduce bank’s cost to serve
bank s
• Low cost delivery channel without large CAPEX investment
• Two way interactive banking without expensive branches
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• Reduce OPEX cost by reducing cash and cheque handling
New easy t use services
N to i
• Compliments existing ATM and Internet Banking investments
• Wide range of new services such as Top-up’s Ticketing etc
Top-up s,
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15. Summary
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Alternative Channel for Merchants
• Instant Clearance, Payment happens in real-time
• There’s no need to mess around with bad cheques
• No waiting for bank cheque clearance
clearance.
• Removes all risk of cash-collection handling
• Cost savings with low electronic payments rates
Convenience for Consumers
• No need to find a CDM/CQM or branch to deposit payments
• Present mobile bills directly to their mobile for payment.
• Direct payment via mobile from anywhere, anytime
Guaranteed Settlement by Banks
G t d S ttl tb B k
• Secured as Wallets are owned by issuing bank
•AAccounts are fully insured b participating b k
t f ll i d by ti i ti bank
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16. Proposed business model
p
Revenue share model to reduce bank’s exposure to
OPEX and CAPEX
d
No application, deployment or customization cost to the
pp p y
bank
Cost of mPOD sim is dependent on the number of
customer acquired. (Price ranging from USD 15 to 25)
mPOD sim can be offered free based on a pre agreed
customer acquisition plan, go to market strategy and the
number of mPOD issued
Simprox will undertake jointly with BAY to acquire
merchants
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17. Thank you…
you
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