Overview of Mobile Payment Systems


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Overview of the Different Mobile Payment systems

- NFC based Platforms such as Google Wallet and ISIS
- Systems like Square, VeriFone, Card.io Naratte Zoosh and other exciting and disruptive startups in this space.

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Overview of Mobile Payment Systems

  1. 1. Overview of Mobile Payment Systems Amit Naik BMC Software
  2. 2. Agenda <ul><li>Why should we care? </li></ul><ul><li>Mobile Payment types </li></ul><ul><li>World of NFC </li></ul><ul><li>NFC Payment Platforms </li></ul><ul><li>Start-ups in Mobile Payments space </li></ul><ul><li>Wrap-up </li></ul><ul><li>Q&A </li></ul>
  3. 3. Why should we care? <ul><li>Lot of money in this space </li></ul><ul><li>Mobile Payments To Triple To $670 Billion By 2015 – Report by Juniper Research </li></ul><ul><li>141 Million people spending $86.1 Billion Using Mobile Payments - Gartner 2011 </li></ul><ul><li>Paypal alone seeing $ 3 Billion Using Mobile Payments in 2011 – Paypal blog </li></ul><ul><li>&quot;And one more thing...&quot; </li></ul>
  4. 6. iPhone 5 rumored to have NFC! Are you willing to bet against Apple disrupting the mobile payments space? Just like: - Music (iPod) - Phones (iPhone) - Tablets (iPad)
  5. 7. Is it safe? <ul><li>PIN protected </li></ul><ul><li>Safer than Cash </li></ul><ul><li>Lost SmartPhone noticed in 15 mins, Lost Wallet 60 mins on avg.! </li></ul><ul><li>Info Encrypted while on Phone </li></ul>
  6. 8. Mobile Payment Types
  7. 9. Types of Mobile Payments <ul><li>Interactive Voice Response (IVR) based </li></ul><ul><ul><li>Applies to Landline and Mobiles </li></ul></ul><ul><li>Premium SMS based </li></ul><ul><li>Direct Billing – Customer Identity based </li></ul><ul><li>Web Payments </li></ul><ul><li>Contactless (NFC) </li></ul><ul><ul><li>Point-of-Sale </li></ul></ul><ul><ul><li>Peer-to-Peer </li></ul></ul>
  8. 10. Mobile Payment types – cont’d <ul><li>Direct Billing and Contactless modes of mobile payment seeing faster adoption </li></ul><ul><li>Direct Carrier Billing examples: Zong (Paypal) , BilltoMobile, Boku, MoPay, Billing Revolution, etc. </li></ul><ul><li>NFC leads in contactless payments tech. </li></ul><ul><li>Juniper Research: 1 in 6 users worldwide will have an NFC-enabled phone by 2014 </li></ul>
  9. 11. <ul><li>World of NFC </li></ul>
  10. 12. Overview of NFC - Origins <ul><li>Near Field Communications (NFC) is a form of Radio Frequency ID (RFID) communication </li></ul><ul><li>Invented by NXP Semiconductors (Philips) & Sony in 2002 </li></ul><ul><li>“ Near Field” (less than 0.10 meters) typically not more than a few centimeters </li></ul><ul><li>Enhanced Security and lower power needs </li></ul>
  11. 13. NFC Overview – 3 operation Modes <ul><li>Card Emulation </li></ul><ul><ul><li>Enables devices to act like contactless cards </li></ul></ul><ul><ul><li>NFC-enabled mobile phones used for payment </li></ul></ul><ul><li>Reader/ Writer </li></ul><ul><ul><li>Enables devices to interact with RF tags </li></ul></ul><ul><ul><li>E.g. NFC-enabled phones used to read “smart posters” </li></ul></ul><ul><li>Peer-to-Peer </li></ul><ul><ul><li>Enables devices to communicate with one another </li></ul></ul><ul><ul><li>E.g. NFC-enabled laptops and printers </li></ul></ul>
  12. 14. NFC Overview - Technology
  13. 15. NFC ready smart phones <ul><li>BlackBerry Bold Touch 9900/9930 </li></ul><ul><li>Samsung Galaxy S II (select phones) </li></ul><ul><li>Nokia C7-00 (Symbian) aka T-Mobile Astound </li></ul><ul><li>HTC Incredible S with NFC chip (China) </li></ul><ul><li>Nokia has numerous non-smart phones with NFC for a while in the market </li></ul><ul><li>iPhone 5? </li></ul>
  14. 16. NFC Software Stack <ul><li>Open NFC is a open source software stack with Hardware Abstraction Layer </li></ul><ul><li>Multiple bindings available for different devices </li></ul><ul><ul><li>Open NFC for Android™ </li></ul></ul><ul><ul><li>WinCE/Mobile Edition </li></ul></ul><ul><ul><li>Linux Edition (for embedded Linux or Linux for PC) </li></ul></ul><ul><ul><li>PC Edition (for Windows XP/Vista/7) </li></ul></ul><ul><ul><li>Core Edition for small OS (Nucleus, REX...) </li></ul></ul>
  15. 18. <ul><li>NFC Payment Platforms </li></ul>
  16. 19. Google Wallet
  17. 20. How Does Google Wallet Work? <ul><li>Android App – Stores your “plastic” details Credit card numbers, Name, Expiry, etc </li></ul><ul><li>Point-of-Sale (PoS) equipped with NFC Contactless Readers (PayPass) </li></ul><ul><li>App. transfers Credit Card authorization using NFC chip on Mobile device </li></ul><ul><li>Compatible with Nexus S/Nexus S 4G today </li></ul><ul><li>Citi MasterCard and Google Card used </li></ul>
  18. 21. Google Wallet – Security layers <ul><li>Credit card info stored in encrypted form </li></ul><ul><li>Secure Element - Separate Chip on phone </li></ul><ul><ul><li>Its own memory isolated from phone memory </li></ul></ul><ul><ul><li>Restricted access by “trusted apps” only </li></ul></ul><ul><li>PIN reqd. to activate phone’s NFC antenna – turned off after each info. exchange </li></ul><ul><li>Device must be in close proximity reader </li></ul>
  19. 22. Wallet Security Layers – Cont’d <ul><li>NFC transceiver is only enabled when the phones screen is illuminated </li></ul><ul><li>PIN is a must to authorize payment transfers – in form of Secure Credentials </li></ul><ul><li>Credentials transferred directly using Master Cards Paypass protocol </li></ul><ul><li>Wallet app prevents obvious weak PIN like 1234 , 1111 & Enforces lock out </li></ul>
  20. 23. ISIS Payment Network
  21. 24. ISIS Payment Network <ul><li>NFC based Payment Network </li></ul><ul><li>AT&T, Verizon, & T-Mobile together formed ISIS network </li></ul><ul><li>Supports VISA, MasterCard, American Express, and Discover </li></ul><ul><li>ISIS enabled Phones not on the market and Architecture is not yet published </li></ul><ul><li>US trials starting 2012 </li></ul>
  22. 25. NFC Adoption Stats <ul><li>Credit card companies worried about new entrants disrupting ecosystem </li></ul><ul><li>Chicken-and-Egg: People can’t use NFC no hardware – manufactures do not make NFC hardware as people do not use it </li></ul><ul><li>NFC to become widely deployed by 2014 </li></ul><ul><li>Multiple Startups filling gap between Full NFC and Pure Old Credit Card (POCC) </li></ul>
  23. 26. <ul><li>Startups - Mobile Payments Area </li></ul>
  24. 27. Square - P-2-P mobile payments
  25. 28. SMB and P-2-P mobile payments <ul><li>Square Dongles allows merchants to use Cell Phones/Tablets to swipe credit cards </li></ul><ul><li>Attachment fits into the audio jack of the iPhone/iPad/Android device </li></ul><ul><li>App. on the phone then transmits info to Square’s servers and Charges the card </li></ul><ul><li>VISA recently made a strategic investment </li></ul><ul><li>Start-up Valued at around $1 Billion! </li></ul>
  26. 29. Square Competitors <ul><li>VeriFone – Makes both NFC software and traditional Credit card readers for iPhone </li></ul><ul><li>Reader Case wraps around the bottom-half and plugs into the dock of iPhone </li></ul><ul><li>InnerFence is another company that makes a similar card reader for iPhone/iPads </li></ul><ul><li>Plugs into the dock of the iPhone/iPad </li></ul>
  27. 30. FigCard – WiFi based payments <ul><li>Fig card (Paypal) provides an application for Wifi enabled smart phones </li></ul><ul><li>Cheap USB dongle for Merchant POS </li></ul><ul><li>Fig card app stores Credit cards details </li></ul><ul><li>When customer is ready to pay, app on phone sends encrypted WiFi signal to POS </li></ul><ul><li>Phone number/ Credit card number etc not exchanged – Electronic confirmation </li></ul>
  28. 31. Card.io – Capture card info easier <ul><li>App on phone takes a picture of Credit Card </li></ul><ul><li>Strips out reqd. info & send it to Merchant </li></ul><ul><li>Deletes picture from phone once completed </li></ul><ul><li>API available for third-party integration </li></ul>
  29. 32. Jumio – Similar to Card.io <ul><li>Mobile app that takes a picture of Card </li></ul><ul><li>Scans picture and extracts info. </li></ul><ul><li>Also can use WebCam at a POS terminal </li></ul><ul><li>Securely transmits data </li></ul>
  30. 33. Naratte Zoosh – Ultrasound Paymts <ul><li>Data delivery by ultrasound waves ~20,000 Hz </li></ul><ul><li>Any phone that plays normal mp3s will work </li></ul><ul><li>Regular Speakers and Microphone capable of sending and reception </li></ul><ul><li>Works securely even in noisy environments </li></ul>
  31. 34. Wrap-up: Future of Mobile Payments <ul><li>Almost unlimited possibilities for disruption of existing shopping experience </li></ul><ul><li>Low barrier to demo stage </li></ul><ul><li>Location aware offers – Phone GPS + NFC </li></ul><ul><li>Verified check-ins Offers (FourSquare) </li></ul><ul><li>Personalized Offers (Browsing history) </li></ul><ul><li>Instant in-store offers (Proximity based) </li></ul>
  32. 35. Wrap-up – cont’d <ul><li>Instant coupons, instant offers (on-line) </li></ul><ul><li>Receipts are electronically processed – Phone App. has a transaction log and actual Receipt could be E-mailed/Scanned </li></ul><ul><li>Lots of innovation – From SMS based payments to NFC based payments in all markets </li></ul>
  33. 36. Q & A
  34. 37. Get in touch!
  35. 38. References <ul><li>Juniper Research Report: http://www.marketwire.com/press-release/mobile-payments-market-almost-triple-value-2015-reaching-670bn-according-new-juniper-1534333.htm </li></ul><ul><li>Gartner 2011 mobile data: http://www.gartner.com/it/page.jsp?id=1749114 </li></ul><ul><li>Paypal blog on mobile payments: https://www.thepaypalblog.com/2011/06/paypal-doubles-mobile-payments-predictions-to-3-billion-in-2011/ </li></ul><ul><li>Steve Jobs Images by Albert Watson (Angry old Man) and National Geographic October 1982 - Moira Johnston/Charles O’Rear </li></ul><ul><li>NFC Technology Architecture: http://www.nfc-forum.org/resources/presentations/ </li></ul><ul><li>Open NFC: http://www.open-nfc.org/infos.html </li></ul><ul><li>Google Wallet: http://google.com/wallet </li></ul>
  36. 39. References – cont’d <ul><li>Google Wallet Security: http://www.pcworld.com/article/228959/google_wallet_security_has_a_weakness.html </li></ul><ul><li>ISIS: http://www.paywithisis.com </li></ul><ul><li>Square: https://squareup.com/ </li></ul><ul><li>VeriFone: http://www.verifone.com/ </li></ul><ul><li>InnerFence: http://www.innerfence.com/ </li></ul><ul><li>FigCard: http://figcard.com/ </li></ul><ul><li>Card.io: http://card.io </li></ul><ul><li>Jumio: https://pay.jumio.com/ </li></ul><ul><li>Naratte: http://www.naratte.com/ </li></ul>