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Mobile Payment Systems. Instructor: Jerry Gao Ph.D. San Jose State University email: jerrygao@email.sjsu.edu URL: http://www.engr.sjsu.edu/gaojerry Oct., 2002. Topic: Mobile Payment Systems. Presentation Outline.

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mobile payment systems
Mobile Payment Systems

Instructor: Jerry Gao Ph.D.San Jose State Universityemail: jerrygao@email.sjsu.eduURL: http://www.engr.sjsu.edu/gaojerryOct., 2002

topic mobile payment systems
Topic: Mobile Payment Systems

Presentation Outline

- What is mobile payment?- Requirements and features of mobile payment systems- Challenges of mobile payment systems- Different mobile payment process- Mobile payment schemes- Classification of mobile payment solutions and systems- Major players and products

Jerry Gao Ph.D. 10/2002

All Rights Reserved

slide3

Topic: Mobile Payment Systems

What is Mobile Payment Systems?

“We define mobile payment, or m-payment, as any transaction with a monetary value that is conducted via a mobile telecommunications network (Durlacher)”.

  • Mobile payment usually uses a point-of-sale payment method through a mobile device, such as a cellular telephone, a smart phone, or a personal digital assistant (PDA).
  • In general speaking, mobile payment is any consumer or business driven transaction to pay for goods, services or digital content using a combination of:
    • mobile devices,
    • mobile delivery networks and
    • the Internet.

Jerry Gao Ph.D. 10/2002

slide4

Topic: Mobile Payment Systems

Required Features of Mobile Payment Systems

  • Simple & Convenient
    • Easy for mobile users to make payments through mobile devices
  • Fast and efficient
    • Fast user response and quick payment processing
  • Security
    • - Protecting buyers, sellers, and all involved parties
    • - Secured transactions
  • Universal acceptance
    • - Allow consumers to shop and pay anyone, anywhere, anyhow using mobile payment solutions and underlying wireless networking

Jerry Gao Ph.D. 10/2002

slide5

Topic: Mobile Payment Systems

Challenges in Mobile Payment

Business challenges:

  • Need good business models for mobile payment business and services
  • Payment cost:
    • Is the consumer expected to upgrade his or her existing handset before using the payment method?
    • How much must content provider pay to integrate a particular payment method into its existing m-commerce applications?
    • Are content providers ready to pay for the fees requested from the payment service provider?
    • What is the cost of building a successful payment service? “technical” costs, and “marketing and sales” costs?

Jerry Gao Ph.D. 10/2002

slide6

Topic: Online Payment Protocols and Systems

Challenges in Mobile Payment

Business challenges:

  • Customer apathy:
    • According to Forrester’s research, European consumers are uncomfortable with the idea of mobile payment i.e. “The fear of an unknown medium” and they are not even willing to try paying with their mobile device.
    • Great areas of promise is to bridge the gap between the touch and feel physical world and the convenient and cost-competitive on-line world.”

Technical Challenges

  • Accessibility
    • Convenience:To what extent can the payment method be used to pay for any type of content, from any location in the world, using any device? Some payment methods might require consumers to upgrade their existing handsets, or be pre-registered with a company.
    • Speed: Time spent using the payment method ,important when customers have to pay for the access.
    • Ease of use:easy to learn and use.

Jerry Gao Ph.D. 10/2002

slide7

Topic: Online Payment Protocols and Systems

Challenges in Mobile Payment

Technical Challenges

  • Need standardization in mobile payment protocols, schemes, services...:

Some current efforts on standardization:

- MeT (Mobile Electronic Transactions):

An initiative by Nokia, Motorola and Ericsson seeks to establish a framework for secure m-commerce.

Confidentiality and integrity will be addressed by Wireless Transaction Layer Security (WTLS), while Wireless Identity Module (WIM) will ensure client and server authentication. WIM will also facilitate the use of digital signatures, which will help ensure non-repudiation.

- E-Commerce Expert Group (ECOMEG):

ECOMEG is a working group within the WAP Forum (W@P).

Identifies, describes, and recommends changes to the WAP specification to enable m-commerce and specifically mobile payment, mobile banking/trading, mobile advertising, B2B, and travel and entertainment services.

Jerry Gao Ph.D. 10/2002

slide8

Topic: Mobile Payment Systems

Mobile Payment Processes

Process Actors and Roles:

Identified key roles to be managed are:

Consumer

Content provider

TTP

PSP

Buys content or services from the content provider

An individual or some organization that sells electronic or physical content (products or services) to consumers.

A company used to perform the authentication and authorization of transaction parties and the settlement

Central entity responsible for the payment process. It may also act as a clearing house to share revenues between all parties involved.

Jerry Gao Ph.D. 10/2002

slide9

5. Delivery of content

Consumer

Content Provider(CP)

1. Purchaseindication

0.Registration

2.Purchase request

4. Purchase authorization

7. Payment

6.Billing

3.Authentication/ Authorization

9.Revenue sharing

Trusted Third Party (e.g. telco, bank, credit card company, ISP)

Payment Service Provider (e.g. telco, bank, credit card company, startup)

8.Revenue sharing

Topic: Mobile Payment Systems

Mobile Payment Processes

Three Stages: 1.Registration 2.Transaction 3.Clearing and settlement

Jerry Gao Ph.D. 10/2002

slide10

Mobile Payment System

Merchant

Mobile Payment User

Purchase Request

Give Merchant your Mobile Number

Merchant Send Mobile Number and Amount

System Call Mobile Phone, Speaks Amount & Request PIN

User Enter and Send PIN using Mobile Phone

System Credit Amount to Merchant

System Debit Amount from User Account

Topic: Mobile Payment Systems

Mobile Payment Transaction Sequence Using PIN

Jerry Gao Ph.D. 10/2002

slide11

Topic: Mobile Payment Systems

Mobile Telephone Systems - PIN and Password

  • Personal Identification Number (PIN)
  • Method for Authorization and Non-repudiation
  • Strength: Easy to implement. Easy to use for users. Prevent thief from using the payment system without the PIN.
  • Weakness: PIN can be easily stolen or broken if it is short. User can forget PIN.

Jerry Gao Ph.D. 10/2002

slide12

Mobile Payment System

Merchant

Mobile Payment User

User dial toll free number and enter PIN

System Verifies Caller ID with PIN and send four digit authorization code

User enters authorization code into Payment System Controller

System Credit Amount to Merchant

System Debit Amount from UserAccount

Topic: Mobile Payment Systems

Mobile Payment Transaction Sequence Using Caller ID

Jerry Gao Ph.D. 10/2002

slide13

Topic: Mobile Payment Systems

Mobile Telephone Systems –Call ID

  • Caller allows a receiver of a telephone call to see the number of the caller
  • Authenticate caller during transaction
  • Strength: Available on all Modern Mobile Telephone System. Easy to implement and use.
  • Weakness: Caller can block Caller ID and prevent Mobile Payment System from doing the transaction. Customer has to change their mobile number in the payment system if they change their mobile number.

Jerry Gao Ph.D. 10/2002

slide14

Mobile Payment System

Merchant

Mobile Payment User

User give Merchant Mobile Phone number to Merchant

Merchant enter Mobile Phone and amount

System calls Mobile Phone, state amount and request PIN

User enter PIN if approve the amount

System Credit Amount to Merchant

System Debit Amount from User Account

Topic: Mobile Payment Systems

Mobile Payment Transaction Sequence Using Callback

Jerry Gao Ph.D. 10/2002

slide15

Topic: Mobile Payment Systems

Mobile Telephone Systems –Callback

  • In conjunction with PIN, it is a way for Mobile Payment System authenticates the user and authorizes the transaction
  • Strength: Easy to implement.
  • Weakness: Phone can be busy or off.

Jerry Gao Ph.D. 10/2002

slide16

Topic: Mobile Payment Systems

Mobile Payment Methods

  • Mobile Payment Methods:
      • 1. Pre-paid (debit-card based payment)
      • 2. Post-paid or Pay-later (credit-card based payment)
      • 3. Pay-now (mobile e-wallet payment)
  • Transaction payment methods:
    • 1-Pay Per View (PPV):
    • the consumer pays once for each view, or increment, of the desired content.
    • 2-Pay Per Unit (PPU):
    • the consumer pays once for each unit successfully completed with the content provider.
    • 3-Recurrent Subscription:
    • the consumer pays a recurring periodic amount to access the content on an unlimited basis during the period.

Jerry Gao Ph.D. 10/2002

slide17

Topic: Mobile Payment Systems

What Do You Pay For?

  • Potential mobile payments falls into several distinct categories:
      • 1. Pay for viewing mobile content
      • 2. Pay for mobile portal services and content directories
      • 3. Pay for buy-and-sell transactions
        • For hard goods and services, such as TV, CD-ROM
        • For digital products, such as e-books, music, ..
      • 4. Pay for transaction brokerage services and transaction settlements
      • 5. Pay for mobile connection services
      • 6. Pay for mobile application services
      • 7. Pay for mobile entertainment services, games, ticketing,..

Jerry Gao Ph.D. 10/2002

slide18

Topic: Mobile Payment Systems

Security Requirements for Mobile Payment Systems

Technical Challenges

High Security Requirements in terms of:

- Confidentiality: Protection against passive monitoring of payment details(e.g. a consumers personal particulars, password)

- Authentication: Ensuring that the consumer and content provider are who they really claim to be.

- Integrity: To what extent can the payment method protect payment details from being modified from the time they are sent to the time they are received.

- Authorization: Ensure that only authorized consumers are allowed to purchase content.

- Non-repudiation: Guarantee that a consumer cannot falsely claim that they did not participate in the transaction.

Jerry Gao Ph.D. 10/2002

slide19

Topic: Mobile Payment Systems

Some Important Enablers for Secured Mobile Payment Systems

- Encryption:Used to ensure confidentiality using encryption and decryption keys.

- Digital Signatures: used to ensure the authenticity of transaction parties, and the integrity and non-repudiation of transmissions.

- Digital Certificates: allows the distribution of the public keys in a secure manner that.A CA issues digital certificates. Contains four main components: a public key, information linking this public key to its owner, information about the certificate issuer, and the issuer’s digital signature.

- Public Key Infrastructure(PKI):is a set of standards that control the lifecycle of digital certificates. A PKI can help address the non-repudiation and authorization aspects of security.

- Secure Electronic Transaction (SET):a protocol by MasterCard and Visa to support bank card payments. SET is implemented using a PKI.

Jerry Gao Ph.D. 10/2002

slide20

Topic: Mobile Payment Systems

Current Security Solutions for Mobile Payment Systems

  • The existing solutions are:
  • Confidentiality, Authentication, Integrity, Non-repudiation, and Authorization for mobile payment.
    • Authenticate registered user based on IS-41 secret key technology
    • Protect against fraudulent operations like cloning, eavesdropping, and subscription fraud
    • Provides Voice and Data Encryption on the network.
    • Provides Integrity and Confidentiality on transaction information, pin, and user account information
  • Strength: Encryption of the system is secure and established on all major Mobile Phone System Providers. Encryption system is built into the system and is invisible to users.
  • Weakness: System is beyond Mobile Payment System control. Cloning can occur

Jerry Gao Ph.D. 10/2002

slide21

Topic: Mobile Payment Systems

Current Security Solutions for Mobile Payment Systems

  • The existing solutions are:
  • Mobile Security Protocols used are Mobile Telephone Systems Encryption, PIN or Password, Caller-ID, Callback, SMS,WAP-WTLS.
  • Mobile Security Protocols used are Mobile Telephone Systems Encryption, PIN or Password, Caller-ID, Callback, SMS,WAP-WTLS.
    • Wireless Transport Layer Security is a Security layer protocol in the WAP architecture
    • Mobile Payment System uses WTLS for data integrity and protection when users access their account using the phone WAP browser
  • Strength: Based on Transport Level Security. Protocol exist and ready to implement and use.
  • Weakness: WAP GAP is a weakness in protecting vital users data. Requires users with WAP mobile phone.

Jerry Gao Ph.D. 10/2002

slide22

Topic: Mobile Payment Systems

Current Restrictions in Mobile Payment Systems

  • The bearer service in wireless networks is rather limited when compared to fixed networks. That is:

Less bandwidth

Longer latencies and

More errors

  • Cheap mobile devices produced for the mass market have several restrictions, such as,
    • Limited screen and small input keyboard and display
    • Very limited processing power, and memory space.

Jerry Gao Ph.D. 10/2002

slide23

Topic: Mobile Payment Systems

Classification of Mobile Payment Systems

Mobile Payment Systems

Account-Based Mobile Payment

Mobile Phone-Based Payment

Mobile POS Payment

icePay

M-Pay (by Ultra)

PhonePaid

CyberM Mobile POS (by CyberCash)

Paybox

BEETLE/Mobile POS (by Wincor Nixdorf)

Oasis IST/mPay

EZ@PAY

Mobile Wallet

Micro-Payment

SET-based Mobile Wallet

Card-Based

Millicent

Trintech’s PayWare

3D SET

3D SECURE

SNAZ’s Mobile Wallet

PayWord

Encorus’s PaymentWorks Mobile

MicroMint

Smart Card Payment

Jerry Gao Ph.D. 10/2002

slide24

Topic: Mobile Payment Systems

Credit-Card Payment –SET

Current problems in SET payment systems:- SET has not been widely adopted because it was inconvenient to both the cardholders and the merchants. -> for example,to use SET security, the merchant has to issue each cardholder a software digital certificate, which is installed on his transaction terminal.- SET limits the cardholder’s ability to transact to only the SET_enabled terminal, so the cardholder would still not be able to use SET at his colleagues’s PC or at public terminals like kiosks or cyber cafes.- On the merchant’s end, SET used a hefty set of algorithms that cost a lot of computing power to process. This increased the cost of hardware needed for merchants to be SET-certified and it dissuaded many smaller merchants from using SET.

Jerry Gao Ph.D. 10/2002

slide25

Topic: Mobile Payment Systems

Credit-Card Payment – SET

Jerry Gao Ph.D. 10/2002

slide26

Topic: Mobile Payment Systems

Credit-Card Mobile Payment – 3D SET

What is 3D SET?- A new initiative for secure mobile credit card-based payment, called “3D mo-del”.- It has three domain model. - It uses SET protocol for the Interoperability Domain.- It uses 3D-SET secure protocol for payer authentication.- It covers different areas of a Visa transaction flow: - The merchant and their bank – Acquirer Domain - The cardholder and their bank – Issuer Domain - The cardholder’s bank and the merchant’s bank – Interoperability DomainObjectives: - Reduce the effort of performing a SET payment on behalf of the cardholder. - Allow the cardholder to use their certificate from any mobile device access. Current Status:- 3D SET has gained ground in Europe and South America, but not yet in the US.

Jerry Gao Ph.D. 10/2002

slide27

Topic: Mobile Payment Systems

Credit-Card Mobile Payment – 3D SET

Jerry Gao Ph.D. 10/2002

slide28

Topic: Mobile Payment Systems

Credit-Card Mobile Payment – 3D SET

Jerry Gao Ph.D. 10/2002

slide29

Topic: Mobile Payment Systems

Credit-Card Mobile Payment – 3D SET

Payment authentication:- Cardholder verification – genuine cardholder is involved in a genuine transaction.- Card verification – a genuine card is being used by the person authorized to use it. - Merchant authentication – the website is run by a genuine Visa merchant.- The transaction is not compromised – details cannot be intercepted or abused.How does it work?The 3D SET model provides:- A flexible framework allows banks and payment acquirers to use theirown methods to authenticate cardholders and merchants in a transaction.- Original SET protocol is used in the Interoperability Domain, so that each party uses the secure and complex interoperability protocol to communicate with the others.- A SET Wallet resides on a central bank server and provides the SET transactional capability.- The bank’s cardholders who have SET certificates also have accounts within the central wallet. The issuing bank can decide how to authenticate its own cardholders because it owns the wallet.

Jerry Gao Ph.D. 10/2002

slide30

Topic: Mobile Payment Systems

Credit-Card Mobile Payment – 3D SET

Advantages:ØStandard by Visa and MasterCard.ØUses existing credit card backend processing systemsØUses signatures-> It removes the need for specified software on the cardholders PC and allows the cardholder to use many different payment channels from PC to mobile phones.Disadvantages:Ø Chicken, egg and farmer problem: requires adoption and software by merchant, buyer, and both their banksØ Complex, expensive certification processesØ Fat wallets, complex spec> Small market share, unclear future.

Jerry Gao Ph.D. 10/2002

slide31

Topic: Mobile Payment Systems

Smart Card Payment

What is smart card? A smart card is a microchip which is equipped with - payment card: bank and/or credit card - SIM card for a mobile phone - electronic ID card - a combination of the above cards- A smart card is an embedded microcircuit, which contains memory and a microprocessor together with an operating system for memory control. - The smart card is a secure storage location for secret information. It is similar to the size of a credit card or a smaller SIM card.- Smart card features: (a) Personal (b) Portable (C) A Security Token- Applications: electronic identification, signature, encryption, payment and data storage. Smart Card Standards- ISO 7816 EMV GSM OCF

Jerry Gao Ph.D. 10/2002

slide32

Topic: Mobile Payment Systems

Smart Card Payment

Smart Card Classification:- Component classification:(a) Memory cards (b) Chip cards- Interface classification:(a) Contact cards (b) Contactless cards (C) Hybrid cards- OS classification:(a) JavaCard (b) Multos cardsSmart card components:CPU processor Carrier ROM PROM EPROM RAM I/O Interfaces

Jerry Gao Ph.D. 10/2002

slide33

Topic: Mobile Payment Systems

Smart Card Payment Systems -SIM

The SIM card is a smart card that is present in the vast majority of mobile phones worldwide.- It plays a very important role in the wireless service chain.- It can be used to customize mobile phones regardless of the standards. (GSM, PCS,..)- It offers: - new menus, prerecord numbers - sending short messages for query - and secure transactionsSmart cards are issued by the financial services industry to reduce the exponential increase in fraud, and create new channels.Advantages:- Reduce fraud significantly, i.e., in 75% drop on fraud after smart card adoption.- Large storage space than traditional magnetic stripe.- Easily add many mobile applications- Additional level of security

Jerry Gao Ph.D. 10/2002

slide34

Topic: Mobile Payment Systems

Smart Card Payment Systems -SIM

Issues in SIM cards:- Security risks: - SIM cards can be cracked and copied. - The attack can be invasive or non-invasive.- Business issues: How to get enough card users and merchants to make money? Merchants are as vital as the customers for the smart card payment systems.- Interoperability: - Too many SIM cards coming to the market- Legal problems: - A pending law suit could damage reputation.

Jerry Gao Ph.D. 10/2002

slide35

Topic: Mobile Payment Systems

M-Wallet Payment Systems

What is M-wallets?- M-wallets are the most popular type of mobile payment option for transactions. - A Mobile Wallet module (m-Wallet) provides a convenient single-click, commerce payment mechanism. - They allow a user to store billing and shipping information that the user can recall with one-click while shopping from a mobile device. - They enables users to store all the information required to fill out commerce-related forms from any application.- A M-wallet is an encrypted entity at the server side that contains payment instrument, identification, and address information for registered users. New technologies are being integrated into m-wallet software, which enables cell phone users to make transactions using speech-recognition and voice-authentication technologies (Deitel & Deitel, 2002).

Jerry Gao Ph.D. 10/2002

slide36

Topic: Mobile Payment Systems

Classification of M-Wallets

Three types of m-wallets:- Client wallet -> stored on a user’ device. Example, SIM Application Toolkit card- Hosted wallet -> stored on a server machine. Example, Encorus PaymentWorks, SNAZ Mobile Wallet- Third-party wallet -> stored on a third-party’s machine.Europe: server based mobile e-wallets using Secure Electronic Transaction (SET) technology are already being used, providing secure transaction capability and providing merchants a payment guarantee for mobile transactions.

Jerry Gao Ph.D. 10/2002

slide37

Topic: Mobile Payment Systems

M-Wallets – Client Wallets

Advantages:- May be perceived as more secure by the user since the wallet is stored locally. - SIM Application Toolkits can communicate with the remote server using USSD. SIMCards that use USSD are substantially faster than WAP equivalents.Disadvantages:- A personal wallet is closely tied to the device. It cannot be used to purchase items through different languages (WML, HTML, and CHTML) or other devices.- Since the wallet is stored and implemented in hardware, it is very difficult and expensive to update. If new functionality is added to the wallet, a new SIM Card has to be sent to every user.- SIM Card applications are proprietary which makes it difficult for them to support new payment technologies such as 3D Secure.- SIM Card solutions are closed in that they are either tied to a single bank or network operator. This means a merchant’s available market is limited. - Since a wallet is stored locally, the wallet and potentially the user’s sensitive financial information is compromised if the device is lost or stolen. Also, getting a new SIM Card wallet to replace the lost SIM may take some time.

Jerry Gao Ph.D. 10/2002

slide38

Topic: Mobile Payment Systems

M-Wallets – Hosted Wallets

Advantages:- If the user’s device is lost or stolen the wallet can still be used.- Since the entire wallet information is hosted remotely, it is possible to add new functionality to the wallet without having to update every user’s device.- The service provider has full control over the wallet, making it is possible for them to quickly add support for new devices.- Since the service provider hosts the wallet they have full control over the functionality and branding.- Self-hosted wallets can be more easily integrated with service providers’ other services and web portals.- It is easier to add support for extra payment instruments (credit cards, debit cards, micropayments, etc.).

Jerry Gao Ph.D. 10/2002

slide39

Topic: Mobile Payment Systems

M-Wallets – Hosted Wallets

Advantages:- The service provider has control over which payment providers are used. -> This allows them to use a provider that gives them the best deal on transaction charges. -> It also allows them to easily integrate with merchant payment providers.- Since wallets are hosted within the service providers’ domain it is possible to leverage CRM data to automatically create and populate wallets.- As use of the wallet increases, the operator has the ability to increase the level of hardware running the wallet service to match demand.Disadvantages: - A hosted wallet takes time to integrate with the service providers’ infrastructure (billing system, WAP gateway, etc.). - Since the wallet is hosted within the service provider’s network, they have the responsibility of maintaining the hardware.

Jerry Gao Ph.D. 10/2002

slide40

Topic: Mobile Payment Systems

Third-Party Hosted M-Wallets

Advantages:- The wallet server is managed by the third party. This means that the service provider’sIT department does not need to manage the hardware associated with the wallet.Disadvantages:- Because the wallet is developed and maintained by a third party, the service provider cannot decide what payment instruments are supported. Also, the third party solution may only support a limited set of devices.- Since the wallet is hosted remotely, the service provider may have no control over the branding of the wallet.- The third party generally maintains relationships with a limited number of payment providers. This makes it difficult to add support for extra payment providers that may be required by individual merchants.- The service provider has no control over the hardware infrastructure provided by the third party to host the wallet. It is possible that, at times, the third party solution does not have the processing power to supply the level of service required.

Jerry Gao Ph.D. 10/2002

slide41

Topic: Mobile Payment Systems

M-Wallet Transaction Architecture

MasterCard Global Mobile Commerce Working Group proposed “Remote Wallet Server Archiecture”. - The architecture covers payment scenarios with three variants such as TCP/IP initiated, SMS initiated and WAP initiated. The 3 variants differ in the initiation phase. In each variant, we can distinguish three phases (see Figure below).1) initiation phase -the merchant server sends a payment initiation message to a cardholder device.2) interaction phase between the cardholder device and SET wallet server In this phase, the cardholder, device(s) forward the merchant’s initiation message such that the wallet server either receives or is able to retrieve the SET Wake-up message. The cardholder approves the transaction and the wallet server authenticates the cardholder.3) the SET transaction phase. In this phase the SET wallet server and the merchant SET server conduct a SET transaction. The initiation phase and cardholder device is the wallet-server interaction phase. The SET transaction phase is completely governed by the SET specification.

Jerry Gao Ph.D. 10/2002

slide42

Topic: Mobile Payment Systems

Mobile Wallet Server Architecture

Jerry Gao Ph.D. 10/2002

slide43

Topic: Mobile Payment Systems

Mobile Wallet Server Architecture

Jerry Gao Ph.D. 10/2002

slide44

Topic: Mobile Payment Systems

Mobile Wallet Server Architecture

Jerry Gao Ph.D. 10/2002

slide45

Vendor

Business Type

URL

Trintech

Global provider of secure payment infrastructure solutions.

http://www.trintech.com/

SNAZ

M-commerce

Solution provider

http://www.snaz.com/

Encorus

innovator in identifying and developing emerging payment technologies

http://www.encorus.com/

Nokia

world leader in mobile communications

http://www.nokia.com/

Qpass

Leading

http://www.qpass.com/

WearLogic, Inc.

Mobile technology platform company

http://www.wearlogic.com/index.html

Topic: Mobile Payment Systems

Major Players in M-Wallets

Jerry Gao Ph.D. 10/2002

slide46

Topic: Mobile Payment Systems

Summary about M-Wallets

  • Hosted mobile wallets solve so many of the problems in mCommerce.- For network operators and financial institutions, hosted mobile wallets overcome the security and usability issues that inhibit the adoption of next generation networks and services.- For merchants’ added revenue in is provided to be a challenging new delivery channel.- For device manufacturers, hosted mobile wallets speed the adoption of new hardware by delivering a rich user experience on new and improved devices.- Finally, for consumers the hosted mobile wallet unlocks the true potential of the mobile Internet and next generation networks and devices, giving the mobile user secure, easy-to-use payment options, allowing them to easily set preferences and enabling secure identification.

Jerry Gao Ph.D. 10/2002

slide47

Topic: Mobile Payment Systems

Major Players in Mobile Payment Systems

  • PhonePaid
  • Paybox
  • Oasis Technology Limited
  • Cellerate
  • M-Pay
  • IcePAY
  • Ez@pay

Jerry Gao Ph.D. 10/2002

slide48

Topic: Mobile Payment Systems

Major Player – PhonePaid

PhonePaid’s Profile:

    • Young company, based in UK.
    • It is the revolutionary new service ,which enables you to pay for things and transfer money by using your mobile phone, simply, safely, instantly.
  • Major Features:
    • Send money
    • Receive money
    • Attractive payments options
    • Mobile purchase

Jerry Gao Ph.D. 10/2002

slide49

Topic: Mobile Payment Systems

Major Player – PhonePaid

  • How it works:
    • Call the transactions number (0871 871 0909) from user registered mobile and enter the mobile pin.
    • Follow the voice prompts and enter the Merchant ID and Product Code.
    • Voice prompts will repeat the merchant's name, description of the product and the price and will ask user to confirm.
    • Once accepted, the transaction is completed. Both user and the merchant will receive an SMS and e-mail receipt notifying of the purchase.

Jerry Gao Ph.D. 10/2002

slide50

Topic: Mobile Payment Systems

Major Player – Paybox

Paybox’s Profile:

    • It is the world's first mass-marketable payment method for mobile telephones and was launched successfully in Germany in May, 2000.
    • All transactions are securely conducted over the existing GSM mobile phone network.
    • It is compatible with any bank account, any GSM mobile phone, across any mobile network.
  • Major Features:
    • shopping online.
    • send money.
    • services: taxi, transfer money…..

Jerry Gao Ph.D. 10/2002

slide51

Topic: Mobile Payment Systems

Major Player – Paybox

How it works:

--- Works like a debit card. Each payment is debited from user bank account only after users have authorized the transaction by entering his/her paybox PIN on the mobile phone.

Jerry Gao Ph.D. 10/2002

slide52

Topic: Mobile Payment Systems

Major Player – Paybox

Paybox’s Intelligent Architecture:

Jerry Gao Ph.D. 10/2002

slide53

Topic: Mobile Payment Systems

Major Player – Oasis IST/mPay

Oasia IST/mPay’s Profile:

  • Based in Canada,Oasis IST/mPay is one product of Oasis Technology.
  • IST/mPay is a secure mobile payment solution that uses mobile phone account information (with PIN or password) instead of credit card information to authenticate consumer-driven payment transactions

Major Features:

????

Jerry Gao Ph.D. 10/2002

slide54

Topic: Mobile Payment Systems

Major Player – Oasis IST/mPay

Oasis IST/mPay’s Functional Architecture:

Jerry Gao Ph.D. 10/2002

slide55

Topic: Mobile Payment Systems

Major Player – icePay

icePay’s Profile:

  • Based in Japan, IcePAY is being developed to be used in combination with its existing "au" mobile phone service.
  • Users receive a small icePAY module which they click on their mobile phone whenever they want to do mobile shopping
  • The module contains two buttons:
    • Button “A” connect with icePAY portal site
    • Button “B” for actual payment

Major Features:

  • For payment, user has to click his/her module to the mobile of the merchant.
  • Press button “B” to enter the amount
  • User enter password and confirm the transaction
  • Result shown on the phone display

Jerry Gao Ph.D. 10/2002

slide56

Topic: Mobile Payment Systems

Major Player – icePay

icePay’s System Architecture:

Jerry Gao Ph.D. 10/2002

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Topic: Mobile Payment Systems

Major Player – icePay

Major Products and Service Features:

  • Buy Video games
  • auction articles
  • Buy Japanese noodles, health food
  • Buy "character goods" (meaning on-line content like foto's of popular baseball players)
  • Delivery service or taxi

Jerry Gao Ph.D. 10/2002

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Topic: Mobile Payment Systems

Major Player – EZ@PAY

EZ@Pay’s Profile:

  • Founded by Information System Impact, Greece
  • a smart application module that can be used by web sites as an alternative for payment purposes and information
  • exchange just with the use of a mobile phone.
  • It provides a very easy and simple way to bill the users of a web site so that they access protected content on an “on-demand” basis, especially in cases where a credit card would not be used.
  • Using a simple SMS messages, user can request “access code” to unlock the site

Jerry Gao Ph.D. 10/2002

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Topic: Mobile Payment Systems

Major Player – EZ@PAY

EZ@PAY’s Architecture:

Jerry Gao Ph.D. 10/2002

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Topic: Mobile Payment Systems

Major Player – EZ@Pay

Major Products and Service Features:

  • Ez@pay has been successfully deployed at the site of XRYSI EYKAIRIA. It is the most popular and largest selling classifieds newspaper in Greece.
  • Customer can browse all Ad
  • To contact the person publish the Ad, Customer need to obtain Access Code using mobile phone
  • Once approved, Access Code is send via SMS message

Jerry Gao Ph.D. 10/2002

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Topic: Mobile Payment Systems

Major Player – M-Pay

M-Pay’s Profile:

  • Implemented by Ultra in Slovenia
  • It is based on Ultra's patented mobile payment terminal.
  • Customer can purchase products on vending machines or in retail stores with their mobile phones.
  • The system is designed to leverage the infrastructure and expertise of two kinds of entities: mobile operators (such as GSM network operators) and financial institutions (banks, credit card issuers)

Major Features:

  • Based on the idea that customer’ s phone should be used as means of communication between the machine and the payment processing center
  • The design drastically decreases the cost of installation
  • It utilizes the concept of voice transmission

Jerry Gao Ph.D. 10/2002

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Topic: Mobile Payment Systems

Major Player – M-Pay

M-Pay’s Architecture:

Jerry Gao Ph.D. 10/2002

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Topic: Mobile Payment Systems

Major Player – M-Pay

M-Pay Applications:

  • Vending Terminals, such as

Vending machines, cigarette machines, parking meters, ticket machines, newspaper machines, photo booths, public internet terminals, fruit machines, video, gaming and other amusement machines.

Advantage:

 Not only eliminate the need for coins or banknote acceptors, but also enable complete inventory management, thus significantly lowering the costs of operation.

Jerry Gao Ph.D. 10/2002

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Topic: Mobile Payment Systems

Major Player – M-Pay

M-Pay Vending Terminal:

Jerry Gao Ph.D. 10/2002

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Topic: Mobile Payment Systems

Major Player – M-Pay

How Does M-Pay Vending Terminal Work?

Jerry Gao Ph.D. 10/2002

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Topic: Mobile Payment Systems

Major Player – M-Pay

M-Pay Applications: (M-Pay Mobile POS)

  • M-Pay POS terminals, such as, taxis, buses, trains, door-to-door sales, home deliveries, temporary retail outlet without connectivity and power supply

It is designed to use retail outlets and mobile points of sale.

Major Features:

  • Easy to use Hand-held compact design
  • No maintenance required End-to-end encryption
  • Portable battery-operated No installation required
  • No need to access to data network

Jerry Gao Ph.D. 10/2002

security solutions for m payment systems

Payment Systems

Security Methods

Phonepaid

MobileSystemsEncryption, PIN, Password, SMS

paybox

MSE, PIN, Callback

Cellerate

MSE, PIN, Password, Caller-ID

M-Pay

MSE, PIN

IcePay

MSE, PIN, Password, Caller-ID

Oasis IST/mPay

MSE, PIN,SMS, WAP-WTLS

EZ@pay

MSE, PIN, SMS, PIN

Topic: Mobile Payment Systems

Security Solutions for M-Payment Systems

Jerry Gao Ph.D. 10/2002

Jerry Gao Ph.D. 10/2002