Suronapee Phoomvuthisarn, Ph.D. suronape@mut.ac.th ITEC0722: Mobile Business and Implementation: Mobile Payment and Security Suronapee Phoomvuthisarn, Ph.D. suronape@mut.ac.th

The Growth of Mobile Payment http://www.paymentscardsandmobile.com/mobile-payment-transactions-record-27-growth-worldwide-past-four-months/

Outline Introduction to Mobile Payment Types of M-Payment Definition of M-Payment Evolution of Payment Drivers Key Stakeholders Types of M-Payment Monetary Value Location Usage Security Challenges

Introduction to Mobile Payment Definition “Use of wireless devices (such as mobile phone) to make a purchase or other payment related transaction.” Mobile Payment (M-Payment) are an important enabling service for other m-commerce services (e.g. mobile ticketing, shopping, gambling…) :

Evolution of Payment 25% 50% 1 in every 6 €1 in every €6.75 of Visa transactions 1 in every 6 25% Visa spend Consumer spend on Visa cards Ecommerce +200% vs face-to-face Mobile by 2020 Visa cards in Europe contactless Secure mobile payments getting the balance right, Royal Holloway University of London,Richard Martin, Payment System Security Visa Europe 7 September 2013

Example M-Mobile methods Voice and now also 3G Video calls (IVR) SMS MMS Mobile TV Mobile Internet Near Field Communications Peer-to-Peer

Drivers Population of mobiles devices over PC Mobile devices allowing low cost and easy access payments (ideal POS) Mobile apps adding functionality Mobile operators are looking for new revenue streams

Key Stakeholders Providers of mobile payment services Demand Sides Financial Institution (e.g. Bank) Internet Bank & ePayment Services Mobile Network Operator Network Infrastucture Subscribers Demand Sides User/Consumer User of the value added services Content Provider/Merchant Getting Paid Low Cost

Types of M-Payments Monetary Value Location Usage Micro payments – less than 5$ Medium Payments – Between 5$ - 25$ Macro payments - above 25$ Location Remote Transaction – SMS, GPRS, Applications, QR Code Proximity Transaction – Bluetooth, RFID, NFC Usage Mobile-to-mobile payments Mobile devices as credit card processors Mobile devices used as credit cards

Remote Transaction Web form Transactional payments by SMS Send money from a Visa card to any Visa card, anywhere in the world, using mobile phone number Transactional payments by SMS the consumer sends a payment request via an SMS text message or a short code and a premium charge is applied to their phone bill or their online wallet. The merchant involved is informed of the payment success and can then release the paid for goods

Online Wallet The consumer’s electronic wallet—the trusted source of credentials Files or devices containing payment information, possibly representations of money Used for seamless payments, without significant user intervention

Online Wallet (2) First payment: Subsequent payments: User registers, inputs their phone number, and the provider sends them an SMS with a PIN User enters the received PIN, authenticating the number User inputs their credit card info or another payment method if necessary (not necessary if the account has already been added) and validates payment Subsequent payments: The user re enters their PIN to authenticate and validates payment

Proximity Payment Definition: Example Benefits & Challenges The trading persons are in the same vicinity. Example Contactless payment Mobile phone used as PoS device Mobile money transfer Benefits & Challenges Offline transaction support Compatibility issues such as interfaces for Infra red Have some risks, ok for micro payments

Contactless Payment Contactless Use a mobile device to shop conveniently, quickly and securely in a face-to-face environment

Mobile-to-Mobile Payments Merchant applications allowing instantaneous transfer of funds from one account to another via smartphone Examples: Paypal Bump Bump phones together to receive account info Or enter email address to download appropriate account info 1.9% - 2.9% + $0.30 transaction fee Mobile Payments powerpoint::Kristen Meyer, PharmD Candidate, University of Charleston School of Pharmacy, PCCA CPMS Intern, January 3, 2011 – February 3, 2011

Mobile Devices as Credit Card Processors Square, Inc. Device acts a mini credit card reader inputting pertinent transaction information into the phone through Square App Cost: 2.75% + $0.15/card swiped; 3.5% +$0.15/card keyed in Intuit Mobile credit card reader Cost Low Volume: $0/month, 2.7% + $0.15/swipe, 3.7% + $0.15/keyed in High Volume: $12.95/month, 1.7% + $0.30/swipe, 2.7% + $0.30/keyed in allaexpression.com Mobile Payments powerpoint::Kristen Meyer, PharmD Candidate, University of Charleston School of Pharmacy, PCCA CPMS Intern, January 3, 2011 – February 3, 2011 http://www.multicellphone.com/category/mobile-payment/page/2/

Mobile Devices as Credit Cards Near Field Communication (NFC) Technology Allows consumers to wave their mobile phone over a point of sale terminal to purchase retail items Thought to threaten the existence of the wallet Companies set to launch pilot programs: PayPass/PayWave Google Wallet ISIS (partnership between AT&T, Verizon Wireless, T-Mobile, Discover Financial Services and Barclays) Costs: Approximately $200/reader you can use Google as your new payment processor, with transaction fees starting at 1.9 percent Mobile Payments powerpoint::Kristen Meyer, PharmD Candidate, University of Charleston School of Pharmacy, PCCA CPMS Intern, January 3, 2011 – February 3, 2011 news.softpedia.com

NFC Payments: Fast and Simple – Touch to Pay Mobile Payments powerpoint::Kristen Meyer, PharmD Candidate, University of Charleston School of Pharmacy, PCCA CPMS Intern, January 3, 2011 – February 3, 2011

Security Challenges Sharing sensitive financial information via mobile devices. Application installation cannot be controlled. new attack for malware to steal customer data Compared to PC, smartphones were not originally designed for data security.

Reference http://www.paymentscardsandmobile.com/mobile-payment-transactions-record-27-growth-worldwide-past-four-months/ http://en.wikipedia.org/wiki/Mobile_payment http://www.businessnewsdaily.com/4457-mobile-payment-solutions.html Mobile Payments powerpoint::Kristen Meyer, PharmD Candidate, University of Charleston School of Pharmacy, PCCA CPMS Intern, January 3, 2011 – February 3, 2011 Status of Mobile Payments, Eelco de Jong, 19 September 2007