1. Ecosystem Scenarios for Cloud-based NFC Payments
Pardis Pourghomi and George Ghinea
School of Information Systems, Computing and Mathematics
Brunel University
London, UK
UB8 3PH

2. pardis.pourghomi@brunel.ac.uk - Brunel University, UK
Introduction to NFC
NFC is designed for short distance wireless communication
NFC is complementary to Bluetooth and with their long distance capabilities
Easy and simple connection method
Enables the exchange of data between devices over the distance of up to 20 centimetres
Provides communication method to non-self powered devices
- Brunel University, UK

3. Examples of using NFC enabled mobile phones
Download music or video from a smart poster
Exchange business cards, Pay bus or train fair, Parking tickets, Pay at Kiosks, Pay and purchase at Point of Sale Terminals
Access controls in office, hotels, airports, print receipts to printer
- Brunel University, UK

4. What is a Secure Element (SE)?
SE is intended as an attack resistant microcontroller
Combination of hardware, software, interfaces and protocols embedded in a mobile handset that enable secure storage
Provides a secure area for the execution of the applications and protection of the payment assets (i.e. payment keys, application codes, payment data)
Can also be involved in authentication process
4. payment assets (e.g. payment data, keys, the payment application code)
- Brunel University, UK

5. What is a Secure Element (SE)?
Operating system running on the SE must be able to install, personalize and manage multiple applications
The SE is essential in NFC transactions and ownership/control of it may yield commercial or strategic advantage
SE types: Stickers, removable Secure Memory Card (SMC), Universal Integrated Circuit Card is (UICC), Embedded SE (eSE)
- Brunel University, UK

6. pardis.pourghomi@brunel.ac.uk - Brunel University, UK
NFC ecosystem players
Consumer: is the party that is considered as the end user in an NFC ecosystem.
Merchant: is considered as the consumer matching part.
Secure Element issuer (SEI): is the party that issues the SE in an NFC ecosystem. It is also controlling the SE in which it decides how the storage of an SE should be used.
Secure Element provider: SE provider is the manufacturer of the SE. It has a direct relationship with SE issuer and service provider.
Service Provider (SP): is the party that issues the payment application and deploys data element to consumer. SP is also responsible for managing the payment application which is stored in SE.
- Brunel University, UK

7. pardis.pourghomi@brunel.ac.uk - Brunel University, UK
NFC ecosystem players
Mobile Network Operator (MNO): is responsible for providing the GSM network for data transmission. In our case, the MNO is the SE issuer (SE in the form of UICC).
Trusted Service Manager (TSM): The role of TSM is to integrate several SEs and SPs.
Acquirer: The main role of the acquirer is handling financial payments by clearing and settling transactions through the financial institutions.
- Brunel University, UK

8. pardis.pourghomi@brunel.ac.uk - Brunel University, UK
SE management
SE management in a mobile multi-application environment is very challenging
SP and SE issuers have ‘n’ to ‘n’ active relationship
Partners may have limited control over the service environment
Current card issuance models cannot support the dynamic post issuance personalization process (lack of SP’s control on SE)
- Brunel University, UK

9. Mobile wallet + Cloud computing
Is there a need for cloud?
Would NFC do the job on its own?
There is a need for a clear right to go market strategy for mobile payments
There is not much agreement in the minds of mobile wallet stakeholders
Which technology will finally get accepted by consumers and merchants?
PayPal, Telefonica/O2, and Best Buy have announced wallets that are using cloud technology – “cloud wallets”
- Brunel University, UK

10. NFC wallet & Cloud wallet
A chip is required – stored in the phone
A mobile app is required – Logging
Client registers with the SP (cloud)
Phone can be scanned on the POS
Registered info are stored in an offline database
Beneficial for busy environments e.g. train stations
Pre-paid account is required
Improves the loyalty experience of clients
Required info (e.g. credit card details) is pulled out from the database when client aims to make a payment
Different apps can be integrated into a single app
Beneficial for merchants – no need to change their current POS terminals
- Brunel University, UK

11. NFC Cloud Wallet model – Overview
Customer scans his NFC enabled phone on the POS to make the payment
The payment application is downloaded into customer’s mobile phone SE
The POS communicates with the cloud provider to check whether the customer has enough credit
Cloud provider transfers the required information to the POS
The merchant either authorizes the transaction or rejects customer’s request
The merchant communicates with the cloud to update customer’s balance
- Brunel University, UK

12. NFC Cloud Wallet model – General idea
Additional Security (optional)
When NFC enabled phone sends a request to the cloud provider to get permission to make a payment (step 1), the cloud provider sends a SMS requesting a PIN number to identify the user of the phone
Customer sends the PIN back to the cloud provider as an SMS – Verification
- Brunel University, UK

13. Ecosystem scenarios: Direct Link between POS and MNO
Extension to NFC cloud wallet model
Assumptions:
The SE is part of the SIM (UICC)
The cloud is part of the MNO
The MNO manages the SE/SIM (GSM)
Banks, etc. are linked with the MNO
MNO is the only party which manages confidential data stored in the cloud
More info: Pourghomi, P., Saeed, M., Q., and Ghinea, G. A Proposed NFC Payment Application, In International Journal of Advanced Computer Science and Applications (IJACSA), volume 4, Number 8/2013, pages The Science and Information Organization Ltd, 2013.
- Brunel University, UK

14. Ecosystem scenarios: Unlinked POS and MNO
Assumptions:
The main SE (virtual SE) is part of cloud – managed by MNO
A secure tamper resistant component is in mobile device used for authentication (phone’s SE)
The MNO manages the SE/SIM (UICC)
Banks, etc. have connections with MNO
Vendor trusts MNO
- Brunel University, UK

15. The virtual SE V.S. phone’s SE
Virtual SE (stored in cloud):
Securely store personal data such as debit and credit card information, user identification number, loyalty program data, payment applications, PINs and networking contacts
Phone’s SE:
Stores authentication data such as keys, certificates, protocols and cryptographic mechanisms
- Brunel University, UK

16. pardis.pourghomi@brunel.ac.uk - Brunel University, UK
Research challenges
Integration of financial institution(s) with MNO
Integration of cloud with MNO
Design secure transaction protocols according to payment scenarios
Further exploration of cloud architecture (SP perspective)
- Brunel University, UK

17. pardis.pourghomi@brunel.ac.uk - Brunel University, UK
Thank you for your attention! Question time Contact: .ac.uk
- Brunel University, UK