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

2. The Growth of Mobile Payment

3. 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

4. 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…) :

5. 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

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

7. 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

8. 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

9. 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

10. 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

11. 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

12. 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

13. 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

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

15. 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 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, – February 3, 2011

16. 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, – February 3, 2011

17. 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, – February 3, 2011
news.softpedia.com

18. 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, – February 3, 2011

19. 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.

20. Reference
Mobile Payments powerpoint::Kristen Meyer, PharmD Candidate, University of Charleston School of Pharmacy, PCCA CPMS Intern, January 3, – February 3, 2011
Status of Mobile Payments, Eelco de Jong, 19 September 2007